Debating the CBO Question with a Senior GOP Aide

In response to my declaration that the Democrats have the facts on their side when they claim that their plan reduces premiums, a Republican aide objected to my assertion that the Congressional Budget Office predicted "higher premiums for a small fraction of folks who will get better insurance plans." A barely redacted e-mail exchange followed.

The senior GOP aide:

That's not right. While CBO said that for most people, there would be a zero to three percent reduction in their premiums, that's compared to the status quo-not to current premiums. In other words, if we do nothing, premiums will increase at an unsustainable rate. If we do the Dem bill, premiums will still increase at an unsustainable rate, but for most people, it will be exactly the same or maybe slightly less. But it will still cause premiums to rise. Make sense? The Dem bill doesn't lower premiums and in many cases significantly increases them. Dems say they won't have to pay more because of subsidies. But that doesn't lower premiums-it just raises a bunch of taxes to pay for the higher premiums.

My response:

This is true without the subsidies. But there will be subsidies.

The aide wrote back:

And increasing premiums and then subsidizing some of the premium, is still an increase.

To which I responded:

CBO said for the small group and business markets, which serves most Americans, premiums would go down

For a number of low income people, their premiums may rise because, says CBO, the quality of the product will be better. And the subsidies will limit the increases and hold them to about 50 percent of the individual market, which is about 10 percent of the total.

For most Americans by far, premiums would either stay the same or go down. For a small fraction, they'd go up. That's what the CBO report says plainly.

The GOP aide:

This is wrong: "For most Americans by far, premiums would either stay the same or go down." You're leaving off an important point: compared to "current law.". In other words, under their bill, CBO said, most premiums would go up (just as they would under status quo) but for some they would go up exactly the same amount, and for some they would go up, but up to three percent less. To simplify using round numbers: If we do nothing, all premiums in "the small group and business markets" will go up by $100 dollars. If we pass the dem bill, those same premiums will still go up--some by $100 dollars, others by $97. But they all go up. Make sense?

My next response:

Depends on what the meaning of "up" is. In this case, if premiums are going to rise anyway, and if the Dem bill exerts SOME downward pressure on them -- relative to their increases -- it's not accurate to say that the Democratic bill raises premiums without noting that premiums would rise regardless -- and the Dem bill might reduce them. Where they'd go up -- in relative terms -- is for people who decide to (and i admit, in some cases, will be forced to) purchase better (i.e., more expensive) plans.

I'll let the GOP aide have the last word:

Now we're getting somewhere. Zero to three percent relative to status quo is margin of error And even that, CBO said, was somewhat dubious. And so I'm sure you'll call Democrats on it, then, when they say this bill will lower premiums-since we now agree that everyone's premiums are going up (despite, or as a result of the Dems bill) and that nobody currently paying premiums will see them lowered.

Wait, no I won't:

I don't agree: for those in the individual market, many will see premium decreases. For those outside that market, after subsidies, many would pay what they're paying now, some might pay a little less, and MANY MANY more would be covered -- which is lost in the discussion. None of this takes into account other factors, but I just don't think it's accurate to tell the American people that ObamaCare would raise their premiums...relative to what would happen naturally.

The Republican bill would not lower premiums either.

I definitely don't think that Democrats should get away with claiming that everyone will be paying LESS in real dollars than they do now. But that's not the issue here: the issue is the relative difference between the current system and what CBO (admittedly imperfectly) projects for the Democratic bill

All right, here's the last e-mail from the GOP aide.

Some in individual market who don't have insurance now will have access to lower insurance, but current policyholders will see an increase on average of 10-12, I believe it said. Getting a subsidy does not equal getting a lower premium. It's a better outcome for you, but it's the result of taxpayers giving you money, not a result of having your premiums lower-Dems have been quite disingenuous about that. A welfare check is not a job any more than a subsidy is a lower premium, right?

ObamaCare will raise many people's premiums and nearly everyone will continue to have higher premiums (again, whether as a result or in spite of the bill). They pitched this bill as lowering premiums for people and "bending the cost curve." It does neither. It does spend a ton of money, cuts a lot of Medicare and taxes a hell of a lot in order to pay a fraction of the population's insurance premiums. But it does not lower premiums and it does not bend the cost curve (not down, anyway).