Lowering premiums

LOWERING PREMIUMS…. Senate Minority Leader Mitch McConnell (R-Ky.) would have us believe that reform will mean “higher premiums.” MIT economist Jonathan Gruber published an important item over the Thanksgiving break, suggesting that McConnell has it backwards.

A new analysis by a leading MIT economist provides new ammunition for Democrats as the Senate begins formally debating the historic health-reform bill being pushed by President Barack Obama.

The report concludes that under the Senate’s health-reform bill, Americans buying individual coverage will pay less than they do for today’s typical individual market coverage, and would be protected from high out-of-pocket costs.

So Democrats will argue that under the Senate bill, Americans would pay less for more.

Gruber, a Treasury Department official in the Clinton administration, relied on CBO data and found that consumers buying individual insurance in an exchange would save $200 (singles) to $500 (families) a year. (Jonathan Cohn reminds us, “Of course, that won’t actually happen until the new insurance exchanges are operating — something not scheduled for a few years, under both the House and Senate bills.”)

The White House seized on Gruber’s analysis, and it’s likely to be widely circulated on the Hill this week.

Also note, however, that Gruber’s piece won’t be the final word on the subject. The Congressional Budget Office is also expected to publish a report this week on reform’s expected impact on premiums.