Fact Checkers to Obama: Individual Insurance Actually Costs Less

President Obama to Congress:

Buying insurance on your own costs you three times as much as the coverage you get from your employer.

Here is the Wall Street Journal fact-check:

The Congressional Budget Office expects premiums for employer-sponsored coverage to cost about $5,000 for singles and $13,000 for families this year on average. “Premiums for policies purchased in the individual market,” adds CBO, “are much lower about one-third lower for single coverage and half that level for family policies.”

Similarly, the federal Agency for Healthcare Research and Quality finds that the growth rate for premiums is also lower for individuals over employers.

Comments (6)

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  1. Linda Gorman says:

    Not to mention that the cost of a human resources department has to be added to the employer premium in order to make it comparable to the individual premium. Individual premiums include all administrative costs, employer premiums don’t.

  2. Bruce says:

    Glad to see you point this out. Is is an oft repeated myth that individual insurance costs more.

  3. n says:

    Thanks for clearing this up. I see this (untrue) claim all the time.

  4. Bart Ingles says:

    I would expect the costs, when applied to similar populations and similar coverage, to be about equal. But Obama is still off by a factor of three.

  5. Ira Stoll says:

    I think this is off-base, for reasons explained here. http://www.futureofcapitalism.com/2009/09/a-health-care-invention

  6. Bart Ingles says:

    Ira, if you’re shopping for coverage in New York, then your pricing experience is likely colored by New York’s pure community rating law.

    It would be ironic if employer-sponsored coverage is cheaper in New York because employment status is the only remaining health-related factor that can be legally used to screen for healthy customers.