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Lewin’s Clarification Highlights Unknowns in Health Bill

Posted By Marguerite Bowling On September 1, 2009 @ 10:05 am In Obamacare | Comments Disabled

This past summer, the Heritage Foundation released jaw-dropping estimates [1], conducted by The Lewin Group, regarding the impact a public health insurance plan from the House health reform legislation would have on private health insurance, especially coverage provided by employers.

Lewin found 103 million people would enroll in a government-run health insurance plan. Meanwhile, critics were quick to point out [2] that the nonpartisan Congressional Budget Office had put that number at 11 million to 12 million people. As Lewin put it, “how could our estimates differ by a factor of 10?”

Turns out there are two big reasons for the difference in Lewin and CBO’s estimates, according to a new report [3] from Lewin. First, the House health care bill does not specify how large of a company would be allowed to enter the exchange and the public plan, leading Lewin and CBO to make different assumptions on what kind of businesses would enroll. Lewin notes:

The bill requires that the exchange be open to individuals and small firms with less than 20 workers by the second year of the program and gives a newly established ‘Commissioner’ the authority to extend eligibility to all employers in subsequent years.

This new Orwellian-like commissioner would have broad lawmaking authority [4], with the power to:

  • Set standards for every American health insurance plan
  • Determine which of your current insurance plans do or do not meet that standard
  • Punish plans that don’t meet the government standard

The second difference in the Lewin and CBO findings is that the CBO assumes the public plan’s premiums would only be 10 percent less than its competitors. Meanwhile Lewin estimated the government would make a 23-percent underbid in premium costs for its insurance plan. Even when Lewin used CBO’s assumption, the health econometric consulting company found about 22.1 million people would enroll in a public plan — not the 11 million to 12 million CBO forecasted.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/09/01/lewin%e2%80%99s-clarification-highlights-unknowns-in-health-bill/

URLs in this post:

[1] jaw-dropping estimates: http://www.heritage.org/research/healthcare/upload/Lewin_public_plan_National_all.pdf

[2] quick to point out: http://blogs.webmd.com/breaking-news/2009/08/health-reform-government-takeover.html

[3] a new report: http://www.lewin.com/content/publications/LewinandCBOPublicPlanEnrollmentComparison.pdf

[4] broad lawmaking authority: http://www.foundry.org/2009/08/14/morning-bell-is-obamacare-consistent-with-our-first-principles/

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