The Facts About the CBO Report on Health Insurance Premiums Under the U.S. Senate Health Reform Bill, HR 3590

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Santa Monica, CA — Opponents of health care reform charged repeatedly this week that the Senate health reform bill would increase individuals’ and families’ cost of health insurance—“by up to 13%,” or “by $2,100 a year.” All the critics cited a Congressional Budget Office report that reached a much different conclusion overall: that everyone would get better coverage, and few would pay more for it.

Consumer Watchdog has called for a robust health insurance rate "prior approval" system that would require health insurance companies to justify rate increases, and get approval for those increases, prior to implementing them.  A similar system for auto insurance rates in California has saved drivers $62 billion.  Adopting aggressive rate regulation in health insurance reform will help to insure that all Americans see rate reductions under health care reform.

(Click here to see the CBO report.)

Here’s what the CBO report, issued Nov. 30, really said:
• Most currently insured Americans, who get insurance through a large employer, would pay less for their insurance – up to 3% less.
• Workers insured through a small employer would pay about the same, but many would get better insurance under the minimum benefits and limits on deductibles required by the bill.
• Only the minority of Americans who buy health insurance on the individual market would pay more—10% to 13% more—for the premiums they pay. This is entirely because they would be buying better insurance, adhering to certain minimum benefits, and requiring that preventive care be offered without extra charge. Americans would be far better protected from medical bankruptcy, unlike the people who today unwittingly buy junk insurance and find themselves hundreds of thousands of dollars in debt when they fallseriously ill.  (Click here to see more on junk insurance.)
• Even in the individual market, the majority of the people buying policies there will be eligible for tax credits to offset the cost of the policy, so even many of those who currently have policies will pay less, for better coverage.

The Senate bill can be improved by amending in a more robust health insurance rate increase justification and “prior approval” system.  Consumer Watchdog, which pioneered the most successful insurance premium regulation law in the nation, Proposition 103, has called on the Senate to adopt amendments reflecting key provisions of California’s landmark insurance reform law.

Read about the bill’s current rate regulation provisions and Consumer Watchdog’s recommended amendments.

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Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at:

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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