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Health Insurance Reform - SPECIAL MYTHBUSTER: Chamber of Commerce's Desperate Television Advertisement

Health Insurance Reform SPECIAL MYTHBUSTER: Chamber of Commerce's Desperate Television Advertisement

In a desperate attempt to preserve the status quo and hold on to insurance profits, today the U.S. Chamber of Commerce launched a deeply misleading television ad about the America's Affordable Health Choices Act. The TV ad continues to make claims - already proven baseless by independent, non partisan fact-checkers - that the legislation will lead to massive tax increases and swell the deficit. Here's the truth - and why the Chamber of Commerce doesn't like it.

Myth:  “Washington's latest health reform idea? A $1 trillion health plan and a government-run public option.”

Fact: While the Congressional Budget Office estimates that the House health insurance reform bill will cost $1 trillion over 10 years, the reforms will be entirely paid for.  The bill includes a public health insurance option, which is critical to controlling costs, keeping private insurers honest, and ensuring that Americans have access to affordable, quality health insurance options.

Myth:  Inflated taxes “…with big tax increases, even on health benefits.”

Fact: The America's Affordable Health Choices Act will be fully paid for, in part by raising about $500 billion in revenues through a tax surcharge on the wealthiest Americans. The bill would require the top 1.2% of earners - households with adjusted gross income in excess of $350,000 (married filing a joint return) and $280,000 (single) - to contribute toward the cost of providing access to affordable health care for all Americans through a new health care surcharge. In other words, families making less than $350,000 a year - or individuals making less than $280,000 a year - will see no tax increase under the current House bill.

This myth has already been debunked by the non-partisan, independent “The proposal would increase taxes on those with adjusted gross incomes above $280,000 a year or $350,000 a year for couples. That's not a whole lot of people. The nonpartisan Tax Policy Center projected a little less than 2.2 million households (1.4 percent of all households) would face higher taxes under the proposal. The surtax for those upper-income folks would start at 1 percent and go up to 5.4 percent with top incomes over $1 million. (This New York Times post explains how the surtax would work.)” [Tax-and-Spend Twittering,, 7/15/09]

In addition, the House bill would not tax health benefits in any way. Plain and simple.

Myth:  Swelling Deficits: “…and the federal deficit? The non-partisan Congressional Budget Office says the deficit will grow $239 billion.”

Fact: On July 17, the Congressional Budget Office (CBO) confirmed that the health insurance reform policies of the America's Affordable Health Choices Act will be fully paid for. CBO estimated that the cost of the bill's reforms was $1.042 trillion over 10 years, while the bill's cost savings and revenues totaled $1.048 trillion. The reforms will be fully paid for through a combination of almost $500 billion in net Medicare and Medicaid savings, included in the bill, and over $500 billion in revenue raised through a tax surcharge on the wealthiest 1.2 percent of Americans. These reforms will provide affordable coverage to 97 percent of Americans two years after the bill takes effect.

CBO also estimated that an additional provision to maintain current Medicare physician payment rates, included in this bill, carries a net cost of $239 billion over 10 years. If this provision is not enacted, these existing rates will be severely cut - ultimately hurting patients' access to doctors and quality health care. Because this is an existing policy, and not technically new spending, the House voted to exempt these Medicare physician payment provisions from PAYGO rules earlier this year. Under PAYGO legislation adopted by the House in July, this provision would be exempted.

The principle of PAYGO is requiring new policies reducing revenues or expanding entitlement spending be fully offset.  Since the Medicare physician payment provisions maintain current policy, it is logical they be exempted. 

“and expanded government control over your health.”

Fact: 100 percent wrong. In the current health care system, insurance companies - not patients or doctors - hold all the power. They can decide whether or not to cover treatments, procedures and routine visits to the doctors. They can decide to raise premiums, deny coverage, or delay care without any accountability. They can decide to shut millions of people out of health care altogether. This is the system America faces today.

The House bill will put patients and doctors where they belong - in the driver's seat. Insurance company bureaucrats will never again stand between Americans, their doctors, and the care they need.

*  *  * Note: While the ad does not specifically cite misleading claims about how much the public health insurance option will cost, there is an increasing amount of misinformation surrounding this. Below are questions and answers to clear up any confusion. *  *  *

Question: How much is the government going to spend on a public health insurance option in the first ten years? $100 billion? $500 billion? $1 trillion?

Answer: The public option will cost the government NOTHING in the first 10 years.

America's Affordable Health Choices Act creates a public health insurance option to offer competition with private insurers.  This competition must be on a level playing field - which is why the costs of administering the public health insurance option MUST be covered entirely by premiums.

The public health insurance option is appropriated $2 billion for start-up expenses - but this funding is paid back over the first ten years through premiums. After ten years the plan must be completely self-sustaining.

The cost of the public health insurance plan to taxpayers will be $0.  However, families and businesses will see significant savings as increased competition brings premiums down. [H.R. 3200, p. 118-121]

Question: If the public health insurance option doesn't cost taxpayers anything, then what does the government spend money on in the bill?

Answer: There are three major costs to America's Affordable Health Choices Act:

  • About 60 percent of the cost of the bill is providing affordability credits that help Americans buy coverage.
  • About 35 percent is additional funding to Medicaid and the State Children's Health Insurance Program (SCHIP) to strengthen these programs and get more people insured.
  • About 5 percent is tax credits for small businesses who want to offer coverage to their employees. [CBO Letter, 7/14/09]

For more health insurance reform myth busting, please click here.

For more information on America's Affordable Health Choices Act, please click here.