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Reality Check: Senate Health Care Debate Viewing Guide

As the Senate debate gets into full swing, we thought we’d address a few of the myths America is most likely to hear from critics of health insurance reform.

As the Senate debate gets into full swing this week, we thought we'd address a half dozen of the myths you will most certainly hear from critics of health insurance reform. If it feels like you have heard these arguments before, it is because you have... you have heard them over and over and over again. You heard them during the mark ups in the House and the Senate, you heard them at townhalls this summer, and you heard them on the House floor. However, repetition does not equal veracity. These claims have been proven false by independent fact checkers time and again. Consider the below information, a viewing guide of sorts for the Senate floor debate.

1.       CLAIM: Health insurance reform will cut seniors' guaranteed Medicare benefits.

REALITY: Health insurance reform will not cut guaranteed Medicare benefits.  Period.  Perhaps unlike many of these same critics who have repeatedly proposed privatizing Medicare or slashing benefits, President Obama believes Medicare is a sacred trust with America's seniors.  Reform protects and strengthens Medicare, adding 5 years to the Medicare trust fund by cracking down on waste, fraud and abuse. It doesn’t use a dime of the Medicare trust fund to pay for reform and does not cut guaranteed Medicare benefits.

Specifically, reform will end wasteful overpayments to insurance companies through Medicare Advantage, and there is no evidence these overpayments improve the quality of care for seniors, yet they contribute to higher premiums for all Medicare beneficiaries.

Here's what the defenders of the status quo won't tell you: the Senate bill will provide a 50% discount to initially reduce the cost of prescription drugs for seniors who fall into the gap in coverage known as the Donut Hole.  It will make preventive services free. It will also improve quality of care for seniors in too many ways to list here – all of this we imagine will be very good news for these critics who are so concerned about our seniors.

2.       CLAIM: Health insurance reform will open the door to spending government funds on abortion.

REALITY:  This legislation is about health insurance reform---protecting Americans from unfair insurance industry practices, providing affordable options and lowering costs.  This is not about changing the status quo on abortion policy.   Health insurance reform legislation should respect existing conscience statutes and follow existing policy that  prohibits the use of federal funds to pay for abortions except in cases of rape, incest and when the life of the woman is at stake.  At the same time it is important that the legislation not erode the insurance choices women have today.  So to be clear: The President believes federal funds should not be used to pay for abortions.  And health insurance reform should not erode the insurance choices women have today. 

3.       CLAIM:  Health insurance reform will make coverage available to undocumented immigrants.

REALITY:  We have procedures in place to ensure that undocumented immigrants don't participate in the exchange – they're ineligible, and we will use well-tested verification systems that states have been using successfully for decades to screen out people who are not authorized to receive public benefits.

Nothing in the bill authorizes employers to hire and provide insurance to undocumented immigrants; this is already against the law and that won't change.  The President has also said he is committed to enacting comprehensive immigration reform, something that should not be tackled piecemeal in the health insurance reform legislation.   

4.        CLAIM:  Health insurance reform will create new financial burdens for small businesses.

REALITY: Health insurance reform will actually lower costs for small businesses. Small businesses will have access to the insurance exchange, where small businesses and their employees can pool together with millions of other Americans to increase purchasing power and benefit from increased competition. 

A report from the Business Roundtable concluded that the cost-savings measures in the health reform bills could lower health care spending per employee by $3000.   From the beginning, we made clear that most small businesses would be exempt from the employer responsibility requirement, because we do not want to increase the burden on small business.   But at the same time, most small business owners want to provide coverage, which is why millions of small businesses would receive a tax credit to make coverage for their employees even more affordable.   Today, small businesses pay 18% more for health insurance than large companies do -- with reform, small businesses and their employees will be able to purchase insurance through the insurance exchange, where pooling and competition will lower prices.  Today, small businesses can see their premiums skyrocket if just one or two workers fall ill and accumulate high medical costs -- reform will prevent insurance discrimination based on health status, meaning that small businesses will no longer be unfairly penalized if a worker falls ill.  To be clear, those critics who claim to be standing up for small business are actually just fighting tooth and nail against all of this – hopefully this good news will turn them around.

5.        CLAIM:  Health insurance reform will cost jobs.

REALITY: Few claims more fundamentally misunderstand both health care and the economy more than this one. Right now the skyrocketing health care costs represent one of the biggest disadvantages our economy faces, and lowering the cost of healthcare will help jumpstart job growth. The President’s Council of Economic Advisers (CEA) estimated that if the annual growth rate of health spending slows by 1.5 percentage points per year, then the unemployment rate could fall by 0.24 percentage point and jobs could rise by 500,000. A newly released Congressional Budget Office report finds that premiums will fall by as much as 3 percent in the large group market and 2 percent in the small group market after reform, showing that employers will reap the cost savings necessary to hire more workers and invest in new property, plant, and equipment. And of course, as discussed in #4, reform will lower costs for small businesses through tax credits and pooled purchasing on a competitive exchange – reducing their competitive disadvantage vis-à-vis larger firms, thus helping to fuel a key engine of job creation in the economy. As icing, of course there will also be plenty of new jobs for doctors, nurses, medical technicians who are updating our health IT, medical researchers, on and on...

6.        CLAIM:  Health insurance reform will not lower costs.

REALITY:  The CBO just recently had more great news for these critics, finding that lower administrative costs, increased competition, and better pooling for risk will mean lower premiums for American families.  We had been trying to tell this good news to these critics for some time, but hopefully the CBO will break through where we couldn’t. Among the CBO’s findings:

  • Americans buying comparable health plans to what they have today in the individual market would see premiums fall by 14 to 20 percent.
  • Those who get coverage through their employer today will likely see a decrease in premiums as well.
  • And Americans who currently struggle to find coverage today would see lower premiums because more people will be covered.