Rep. Shadegg: "The Figures You Have Are Not The Figures I Have."
Fox News Anchor, Rick Folbaum: "...that tax credit that you mentioned. $2,500 for individuals, $5,000 per family. But I went and looked at what it actually costs for health insurance for individuals, and say a family of four. And on average, according to the Henry J. Kaiser Family Foundation, the costs are a lot more than the tax credit that your plan offers. The annual premium for individuals, $4,700. The average cost for a family of four, $12,700. There is a big gap between what it actually costs and what your plan offers. So, how are people supposed to make up that difference?"
Rep. Shadegg: "Great question. Number one, the figures you have are not the figures I have. The figures that I have show that the cost of an average American plan is about $2,600 for an individual, $5,800 for a family. We're willing to be flexible with that number. I do not think it is as high as the number you just gave." [Fox News, 7/17/09]
$5,800 Figure Comes From Insurance Company Data
$5,800 Figure Comes From AHIP Survey. According to a report issued by Uwe Reinhardt of Princeton University, the estimate of a family's yearly health care insurance cost of $5,800 comes from "a December 2006/2007 survey of individually sold health insurance policies conducted on behalf of an published by America's Health Insurance Plans (AHIP), the association of health insurers in America." [Uwe Reinhardt, "Universal Health Insurance Coverage at Only $5,800 Per Family?" via AllHealth.org, accessed 7/17/09]
AHIP Study Used Only AHIP Members For Data Collection. According to the AHIP report, "For this survey, AHIP members with individual major medical insurance plans in force were asked to submit premium information." [AHIPresearch.org, accessed 7/17/09]
- AHIP Acknowledges The "Survey Should Not Be Taken Out Of Context." According to the Reinhardt report: "AHIP, however, is the first to warn that the numbers from this survey should not be taken out of context for a number of reasons. First, there is a large variation of actual premiums around this average. Second, the sample for the data is truncated in the upper range. It reflects only policies sold, and not quotes on policies given. Thus it excludes policies on which the quoted premium was so high that prospective customers did not buy the policy. Naturally, it excludes families rejected outright for coverage. Finally, these policies have much higher deductibles than is typical or traditional employer-provided health insurance, and it also has numerous exclusions (e.g. maternity care) and upper limits (e.g., on drug spending) that help keep premiums low alright but expose insured families to potentially sizeable financial risk." [Uwe Reinhardt, "Universal Health Insurance Coverage at Only $5,800 Per Family?" via AllHealth.org, accessed 7/17/09, parentheses original]
The Annual Cost Of Health Care For Families Is Much, Much Higher Than Rep. Shadegg's "Figures"
Milliman: American Families Will Pay Almost $17,000 For Health Care Coverage In 2009. According to the Milliman Medical Index: "The total 2009 medical cost for a typical American family of four is $16,771, compared with the 2008 figure of $15,609. This is a 7.4% increase from 2008 to 2009." [Milliman.com, accessed 7/17/09]
Kaiser Family Foundation: American Families Paid $12,680 For Health Care Coverage In 2008.
[KFF.org, accessed 7/17/09]