Beyond The Hype: How Much Health Care Could Cost

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The Obama administration has been hammering health insurance companies all week over proposed rate hikes. But the insurers have fired back, saying their hands are tied because the cost of health care keeps going up. NPR health policy correspondent Julie Rovner wades through the talking points with guest host Jacki Lyden and tells us what the proposed health bills would actually do to address costs.

JACKI LYDEN, host:

For more now on the health care endgame, we turn to NPR's Julie Rovner. Hi, Julie.

JULIE ROVNER: Hey, Jacki.

LYDEN: So Julie, President Obama has been spending a lot of energy on health care, demonizing, if you will, the behavior of the nation's insurance companies. Here's a clip from his trip to Philadelphia earlier this week.

President BARACK OBAMA: Every year they drop more people's coverage when they get sick, right when they need it most. Every year they raise premiums higher and higher and higher. Just last month, Anthem Blue Cross in California tried to jack up rates by nearly 40 percent, 40 percent. Anybody's paycheck gone up 40 percent?

(Soundbite of laughter)

LYDEN: So Julie, a lot of people are saying Barack Obama has found his voice on this, quite a shift in strategy.

ROVNER: Well, I think it's more of a shift in emphasis. Of course, Anthem Blue Cross played right into his hands with those big increases they're asking for, but this is sort of a win-win strategy for the president. He gets to be sort of a populist here everybody hates the big bad health insurance industry.

At a House subcommittee hearing a couple of weeks ago, even some conservative Republicans chided the CEO of Anthem, saying these were particularly ill-timed premium increases. But at the same time, it helps the president remind the public that this bill isn't just about people who don't have insurance, it's about people who already are insured but who will face rising, unsustainable premium increases if something isn't done, and he says that something is his bill.

LYDEN: Now, the health insurance industry isn't just sitting there. How is it responding?

ROVNER: Well, officially the health insurance says it still wants a health overhaul bill passed, although they have problems with this specific bill that's about to be pushed over the finish line. They think it doesn't do enough to curb costs and that the penalties for people who don't buy the required insurance are too small, so only sick people will sign up, and that will cause premiums to rise. But while the insurance industry trade group is being relatively polite, some of the individual insurance companies are helping fund a U.S. Chamber of Commerce campaign against the bill. Heres a piece of a TV ad that's out this week.

(Soundbite of television ad)

Unidentified Woman: But now Congress is trying to use special rules to ram through their same trillion dollar health care bill, billions in new taxes, more mandates on businesses. Health care costs will go even higher, making a tough economy worse.

LYDEN: So are these claims true? Will the bill make health care costs higher?

ROVNER: Well, not according to the Congressional Budget Office, which is the official scorekeeper of the bill. The CBO says the Senate bill would actually more than pay for itself, both over the first 10 years and over the second decade. That means it would lower, not raise, the deficit.

LYDEN: What health insurance premiums? Critics of this bill say that they could go up under this bill.

ROVNER: Well, its hard to know exactly what will happen. But again, the Congressional Budget Office says for most people who get their insurance on the job, that wouldnt happen. People who buy their own insurance could see increases, but that's because theyll be getting insurance that covers more things. So while their premiums might be higher, their overall health spending could actually be lower. And most of the people who will have to buy their own insurance will get government subsidies so theyll actually pay far less out-of-pocket.

On the other hand, the insurance industry does have a fair point - that if that required insurance, the mandate, is too loose and the young and healthy dont sign up, there could be problems in the insurance market like there are today with lots of sick people who end up having to pay for each other, and very high premiums.

LYDEN: I hate to say that history will sort this out, but it is going to take a while for it to take effect.

ROVNER: That's right. Most of these requirements are going to take several years before they're implemented, so there will be plenty of time to continue this debate and possibly refine some of these things. Even if this bill gets through, this debate is far from over.

LYDEN: Julie, I'm just hoping youre holding up.

(Soundbite of laughter)

ROVNER: Thank you, Jacki.

LYDEN: Thank you for coming in.

NPR's health policy correspondent, Julie Rovner.

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