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A day after the GOP released its 219-page alternative health care bill, U.S. Rep. Mike Pence, chairman of the House Republican Conference, sent out a press release boasting that the "the nonpartisan Congressional Budget Office now confirms that families will see their health care premiums reduced by up to 10 percent."
Lowering health care costs -- rather than reducing the ranks of the uninsured -- has been the primary focus of many Republicans in Congress, and so we wanted to check out Pence's claim.
First, a few words about the Congressional Budget Office, or CBO. The nonpartisan budget agency calculates how much bills in Congress will cost the government. Political leaders and others regularly turn to the CBO as the definitive source for budget projections.
And here's what the CBO concluded about how the GOP health care plan would affect private health insurance premiums:
• For the small group market (generally businesses with two to 50 employees -- about 15 percent of the private market), the GOP plan would reduce average premiums in 2016 by 7 to 10 percent compared with amounts under current law.
• For the individual market (just over 5 percent of the private market), the GOP plan would reduce premiums in 2016 by 5 to 8 percent.
• And for the large group market (which represents 80 percent of private premiums), the GOP plan would reduce premiums in 2016 by 0 to 3 percent.
The CBO cautioned that those estimates are "very preliminary and are subject to an unusually high degree of uncertainty" because of the difficulty in trying to untangle how various proposals in the plan might affect premiums.
But you can see what Pence has done. The Indiana congressman cherry-picked the most favorable number to put the GOP plan in the best light. Yes, for people in the small market group, the CBO estimates they could see average premiums reduced in 2016 by "up to 10 percent" compared with amounts under current law. But only 15 percent of the total private premiums fall into that category. The overwhelming majority, 80 percent of people paying private premiums, are in the large market group. And for them, the CBO estimates the GOP plan would reduce premiums in 2016 by 0 to 3 percent. But Pence did say "up to," providing himself with some very broad wiggle room. And so we rate Pence's statement Half True.
GOP.gov, Press release: "Pence Hails CBO Report on Republican Health Care Bill," Nov. 4, 2009
Congressional Budget Office, Letter from CBO Director Douglas Elmendorf regarding the CBO analysis of GOP alternative health care plan, Nov. 4, 2009
The alternative health care reform bill offered by Rep. John Boehner , Nov. 4, 2009
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