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Health Subcommittee Shines Light on Increased Premiums Under the New Health Care Law

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Location: Washington, DC

The Subcommittee on Health, chaired by Rep. Joe Pitts (R-PA), today continued its examination of the health care law's impact on health insurance premiums. Members heard from former Congressional Budget Office Director Douglas Holtz-Eakin and an Actuarial Principal at Oliver Wyman, Christopher Carlson, on how these mandates will impact individuals, families, and the health care system.

"During 2008 and the run up to passage of the Affordable Care Act in March 2010, President Obama repeatedly promised the American people that their health care premiums would go down by an average of $2,500 before the end of his first term in office. He broke that promise," stated Chairman Pitts. "In fact, Americans' premiums have already risen by more than $3,000, and the expensive part of the ACA hasn't even been implemented yet."

Republicans on the House Energy and Commerce Committee, along with the Senate Finance and Senate Health, Education, Labor and Pensions Committees, recently released a joint report which outlines estimated premium increases for most states that will result from the rigid mandates, price controls, fees, and taxes imposed by the president's health care law.

In an exchange with Health Subcommittee Vice Chairman Michael C. Burgess, M.D. (R-TX), Christopher Carlson explained how numerous provisions of the law would increase premiums, stating, "If you increase benefits, the premiums will go up and if you increase costs to the insurers those will have to be funded somehow."

Douglas Holtz-Eakin, in an exchange with Rep. Ralph Hall (R-TX), described how new taxes stemming from the health care law contribute to increased premiums while harming seniors enrolled in the Medicare Advantage plans and Medicaid programs serving low income families. "If you look at the structure of the tax I think there is broad agreement that the tax itself will end up being embedded into premiums. That insurers will have to recover that cost and the way to do so is to raise premiums," said Holtz-Eakin.

As part of an ongoing examination of the law's impact on premiums, the committee yesterday requested over a dozen insurance companies provide more information on the premiums American families can expect to pay beginning in 2014.


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