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Add this to the list of qualms Florida Gov. Rick Scott has with the nation’s health care law.
He says it will lead to increased premiums.
How? Through the part of the law that creates an online marketplace for individuals who do not receive insurance from their employers. Known as a health exchange, the idea is consumers can compare plans to get the best deal.
After the Supreme Court upheld the law, Scott announced he would not to set up the required exchanges, which means the federal government will step in to do it.
Scott -- who built his fortune running the nation’s largest hospital chain and his political cred leading an attack group opposed to health reforms -- says these exchanges "don’t work" and will lead to bigger bills for families.
"If it was such a great idea the private sector would do it," Scott said on Fox News on July 2. "And we know the Congressional Budget Office said if you’re going to buy your own policy with these exchanges you’ll be paying 10 percent more, or a family will. So about $2,100 more for a family. So you’re going to pay more with these exchanges."
We’re familiar with Scott’s comments, which have roots in this 2009 report from the Congressional Budget Office, a nonpartisan research agency.
Origins of this talking point
The CBO report, produced Nov. 30, 2009, examined how the law would affect health care premiums for people who purchase insurance through an employer-based group market (both large and small businesses) and for individuals.
As Scott said, CBO expected the average premium per person in new individual policies would rise 10 percent to 13 percent in 2016 compared with where it was before the law took effect.
In this market, average premiums per policy in this market would be about $5,800 for single policies (a $300 increase) and $15,200 for families (a $2,100 increase -- just like Scott said), according to CBO (pages 5 and 6).
If only the report ended there.
Subsidies and expanded coverage
More than half the 32 million people expected to seek their own coverage in 2016 (57 percent) would be eligible for subsidies that would reduce their premiums by 50 to 60 percent, the CBO said. (The subsidies are to be allocated according to a fee schedule that links a person’s income with the federal poverty level.)
Scott’s comments also don’t account for an important change with these individual policies.
People will pay more, but it will be for a bigger swath of benefits. The law requires insurance companies to offer an "essential health benefits" package that would mirror benefits people get through employer plans.
These new policies have to cover services such as maternity care, prescription drugs, and treatment for mental and substance abuse.
In an "apples to apples" comparison, CBO found that premiums for new "essential health benefits" packages would actually be 7 to 10 percent less than equivalent insurance under the old law.
A small market
Scott was specific when he described who would be affected by CBO’s projections. But he didn’t include an important qualifier: People purchasing their own health insurance comprise less than one-fifth of the market.
According to CBO, people in the individual market could make up about 17 percent of the insurance market in 2016.
The biggest share, about 70 percent of the market, belongs to people who receive coverage in the large-group market. Health insurance premiums for the 134 million people in this larger, employer-based classification could decrease by zero to 3 percent in 2016.
As for the small group market, which is comprised of businesses with 50 or fewer workers, their premiums would stay mostly the same, either increasing 1 percent or dropping 2 percent.
Scott said that the Congressional Budget Office said people would pay 10 percent more for policies on the exchange, "so about $2,100 more for a family." What he doesn’t say is that these policies will have to offer comprehensive coverage. So people will pay more, but they’re also get more benefits. Additionally, the federal government will offer subsidies to many of these people to cut the cost.
It’s also important to remember the CBO’s "apples-to-apples" comparison. According to the agency, people in the individual market will actually pay less for the required amount of benefits under the Affordable Care Act than they would for those same benefits under old policies.
We rate Scott’s statement Mostly False.
Fox News, Florida refusing to implement part of health care reform law, July 2, 2012
Congressional Budget Office, "An Analysis of Health Insurance Premiums Under the Patient Protection and Affordable Care Act," Nov. 30, 2009
PolitiFact.com, "Obama says under Democratic health plan, family insurance premiums in the individual market would decrease 14 to 20 percent," Feb. 25, 2010
PolitiFact.com, "Rep. Mike Pence says Democratic health plan would drive up family premiums," Dec. 1, 2009
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