Health Inc.

Administration Says Health Law Will Lower Premiums, But Critics Disagree

President Barack Obama said he was open to improvements to the health overhaul law during his State of the Union speech earlier this week. i i

President Barack Obama said he was open to improvements to the health overhaul law during his State of the Union speech earlier this week. Brendan Smialowski/Getty Images hide caption

itoggle caption Brendan Smialowski/Getty Images
President Barack Obama said he was open to improvements to the health overhaul law during his State of the Union speech earlier this week.

President Barack Obama said he was open to improvements to the health overhaul law during his State of the Union speech earlier this week.

Brendan Smialowski/Getty Images

It's been a rocky week for health overhaul.

House Republicans formally launched what promises to be a long series of hearings intended to turn the public against the the Patient Protection and Affordable Care Act, the official name for overhaul.

And President Obama even offered to make changes to the law, if warranted, both in Tuesday's State of the Union address and again today in a speech before the pro-health law consumer group Families USA.

"As I said on Tuesday, I believe that anything can be improved," he told the mostly adoring crowd. "As we work to implement it, there are going to be times where we say, you know what, this needs a tweak, this isn't working exactly as intended, exactly the way we want."

Now the administration is back with even more ammunition aimed at silencing critics. A new report attempts to quantify exactly how much individuals and businesses might save once the law is phased in starting in 2014.

According to the report, premiums are expected to be lower than they otherwise would be without the law. For example, it says, middle-income families could save as much as $2,300 by purchasing coverage through the new health insurance exchanges; small businesses could save as much as $350 per family policy; and even large businesses will save, it says, because more healthier people will have insurance, thus better spreading risk.

Low-income families, who will also be eligible for government subsidies, could save even more; as much as $14,900 per year, the report says.

But the report wasn't even formally issued before it was immediately assailed by Republicans and the insurance industry.

"The new law will expand coverage to millions of Americans, but fails to address the health care cost crisis," said a statement from America's Health Insurance Plans.

AHIP says that while the law may save individuals and businesses money through tax credits and other mechanisms, that's not the same as slowing the growth of health spending. "While tax credits are important to help people pay for coverage, tax credits do not bring down the growth of medical costs or reduce health insurance premiums."

Meanwhile, Sen. Mike Enzi (R-WY) accused HHS of "cherry-picking" numbers to show premium changes in a favorable light.

When it was estimating the impact of the legislation, the Congressional Budget Office did say that premiums would decline by 7 to 10 percent due to insurance market changes, Enzi said in a statement:

They also said that premiums would go down another 7-10 percent because healthier people would sign up for insurance. The HHS report forgets to mention, however, that CBO also said that premiums would go up by 27 to 30 percent because the bill requires most Americans to purchase more expensive government mandated benefit packages.

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