Jonathan Gruber of MIT is out with a new report today, proving once again that health reform – this time the Senate version in particular – would save people money. And once again, he’s relying on CBO numbers to prove the point. Here’s the argument:

In a letter to Senator Reid on November 20, the Congressional Budget Office (the official government scoring agency) reported that they estimated the cost of an individual low-cost plan in the exchange to be $5200 in 2016. This is a plan with an "actuarial value" (roughly, the share of expenses for a given population covered by insurance) of 70%. In their most recent communication with Congress, CBO also projected that, absent reform, the cost of an individual policy in the non-group market would be $5500 for a plan with an actuarial value of 60%. This implies that the same plan that cost $5500 without reform would cost $4460 with reform, or almost 20% less.

Gruber goes on to chart some of the savings for people:

It’s worth noting that the premium savings – calculated between $200 and $400 – are before the subsidies are applied. When the subsidies are factored in, you can see how significant the savings are, especially at lower incomes.

The Senate bill – with exchanges, a public health insurance option, and generous subsidies for lower incomes – would indeed save people a good chunk of change. Of course, there are parts that can and should be improved – better affordability standards for all Americans, for example – but critics who take the insurance industry line and say reform will increase costs are dead wrong.

(also posted at the NOW! blog)

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