Tweet
photo by Roby
The big story from the weekend is that AHIP, the lobby for the insurance industry, waved around a study from Price Waterhouse Coopers (the Oscar people) claiming that, as a result of the Senate Finance Committee bill, health insurance rates will rise $4,000 faster by 2019 than if there were no bill at all. This study was summarily typed up by the Washington Post and the New York Times, though neither of them pointed out that the essential truth of this story is that the health insurance industry is saying they will raise insurance premiums faster if the Democrats pass health care reform.
That’s not so much news, as it is a threat.
It also appears to be a threat at variance with the facts. For instance, the report left out the subsidies that would make insurance more affordable to anyone making up to 400% of the federal poverty level. Also, the report simply claims that the excise tax on insurance companies would just raise premium prices instead of causing employers to restructure their health plans and purchase less costly coverage.
And the list of strange assumptions goes on. Plenty of experts, including the CBO, don’t think health care providers will simply charge private insurers more to make up for declining revenue from Medicare. The experts could all be wrong, but PriceWaterhouseCoopers doesn’t even acknowledge this belief let alone explain why it might be wrong. Indeed, nowhere in the document does the firm reveal its methods, which is interesting since–unlike CBO or even, say, a private outfit like Lewin–PriceWaterhouseCoopers is not particularly known for this sort of modeling.
This just appears to be a bogus document to try to scare Congress into removing the tax on high-end insurance plans. The Senate Finance Committee described it in that way today.
“This report is untrue, disingenuous and bought and paid for by the same health insurance companies that have been gouging too many consumers for too long as they stand in the way of reform yet again. Now that health care reform grows ever closer, these health insurers are breaking out the same, tired playbook of deception to prevent millions of Americans from getting the affordable, accessible care they need. This report is pitching some seriously flawed analysis that nobody’s buying as it excludes all the provisions that will actually lower the cost of coverage – tax credits, grandfathering for existing policies, increased enrollment in private coverage and administrative savings from a more efficient mechanism for purchasing coverage. It’s a health insurance company hatchet job, plain and simple.”
The best face you can put on this is that the weakening of the individual mandate by the Finance Committee means that fewer Americans will have health insurance coverage, shrinking the risk pool and driving up costs. But as has been relentlessly documented, without a public option, there is no reason to set up a forced market for health insurance that would guarantee billions more in profits for the insurance industry. Anyway, experts have shown that the industry could easily cherry-pick individuals and weed out the sick to maximize profits. And they will try to use the insurance exchanges to do it:
Despite reforms prohibiting discriminatory practices, insurers would still have powerful incentives to cherry pick low-cost people and mistreat/shoo away high-cost people. While the reform bills include a risk-adjustment mechanism to reallocate dollars within the exchange(s) from insurers with lower-cost enrollees to insurers with higher-cost enrollees, that mechanism would likely fail to capture all the adverse selection effect, and insurers would have strong incentives to undermine the rules and deceive federal/state regulators trying to counteract the perverse incentives [...]
…what it tells us is that the insurers are counting on lots of younger, healthy people being forced to pay premiums, so they won’t be stuck with just older/sicker people with higher costs. [AHIP is] implicitly confirming that the scheme focuses insurers’ incentives on attracting the young and discouraging the old. These same incentives will be driving the industry whether the number of uninsured is 25 million or 17 million (as projected for the House bills).
The industry appears to want it both ways: they want to force everyone to buy their insurance, while cherry-picking the healthiest members of the uninsured for themselves, and sacrificing nothing in profits–in fact, increasing them.
The Senate Finance bill doesn’t give the insurance industry every single thing they want, so they’ve decided to go to war with it. Which gives top Democrats a choice: now that the insurance industry has revealed itself to be utterly contemptuous of any reform, does leadership really have to be solicitous toward it in any way, like by eliminating the market competition of a public option?
32 Comments
Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About Firedoglake
My reading of it. Pressure Conrad, Carper, and Lincoln to vote No and not let it out of committee (sure worked that way in 1994, didn’t it?)
The timing shows that it is not about substance but about how to procedurally kill the bill before the other bills can be merged with it.
It’s not out to change public opinion; the public is not that stupid. It is out to spook Democrats in Congress.
“That’s not so much news, as it is a threat.”
Very nicely stated.
OBAMA! Now will you lead?
the public is not that stupid
say what?
Given how wonderful the other Big Whatever accounting firms have done over the years, PwC does nothing that inspires me to confidence.
And I’m old enough to remember when a firm Like PwC would sell their conservatism (as in investing and auditing services) and integrity and that’s why the Oscars could trust them.
(Of course they are – but appeal to their vanity by claiming that they’re not)
Oh yea, they are glued to the lake. . .riki lake maybe!
Of course, this is the best case for Medicare for all.
But we’ll continue to see deficit hawks opposing single payer because it would save money and people would like it better than the insurers, the same ones who are breaking their pact with Obama.
Will Obama let the insurers screw him and us?
Since it’s a threat, “how to deal with it?” becomes the next question.
In my book, if someone threatens you with economic (or other ruin) if you don’t hand over money, then that’s called extortion. That’s a crime in most jurisdictions.
If someone actually undertakes to damage or destroy something – to make the point that their extortion threat is genuine and they mean business – that falls under the heading (as defined in the so-called PATRIOT Act) of “domestic terrorism”. (You remember – any crime can be an act of terrorism – sure you do.)
Suffice it to say that, if the rhetoric we’ve heard about everyone suffering under the burden of fearing losing their healthcare insurance is even remotely true, then the insurance industry has successfully terrorized a whole bunch of people.
Now that Obama has tied his success or failure to whether he gets his health-care reforms passed, he has also tied himself to being terrorized. And he can either knuckle under to the terrorism, or he can use the tools he’s been given to fight the terrorists.
Unfortunately, given his performance in the bank bailout – remember all the tantrums the bankers threw when the government even floated the idea of looking at their bonuses? – and knuckling under to that, we all know how this is going to come out. He long since decided to roll over on this one.
In reality, the heads of these insurance companies (and their families, for good measure. It’s not like the USG hasn’t done that before) should be getting one-way tickets to the Charleston SC Naval Brig. Where they can spend the next 6 years or so incommunicado. Like the terrorists they are.
This is what passes for leadership from him.
Remember the core of his governing philosophy: “Nobody gets hurt. By the way: you’re Nobody.”
The public’s not that stupid, but the four Senators in question seem to be.
Two-thirds of the public are for a strong public option; half of the public is for single-payer. The public is not stupid.
“…the heads of these insurance companies (and their families, for good measure. It’s not like the USG hasn’t done that before) should be getting one-way tickets to the Charleston SC Naval Brig…”
Please leave some room for the financial industry execs for their hijacking of the federal treasury.
I understand that that brig is a fairly big place.
I’ll take your word for it.
The only reason the insurance corps are so brazen is because they know the pols will let them get away with it. In fact, it could be that the pols enccouraged them to produce such a study.
Once again, let’s simply expand Medicare for all. Or else, require insurance companies to be, as in Switzerland, non profit, and to play by the rules for non-profits.
Time to strike back as these monsters.
Why does anyone defend these private insurers and HMOs? What good are they actually doing? It’s been made painfully clear that they are engaged in thievery for their shareholders and killing people in the process?
Anyone who has been watching this debate and has a brain knows what’s going on here. Like the banks who got their billions they insurance industry and pharma are not going to be put out of business – a very good one at that. The shareholders don’t care about people’s health – they care about making more money!
These greedy slugs are shameless.
of course. surely no one is surprised by this? it was in the cards from the start. without very strong regulation and enforcement, especially for risk adjustment, this is exactly what can be expected to happen. it’s a feature, not a bug, of the public-option-in-a-multi-payer-system in a weakly regulated market.
which makes the claim of “market competition of a public option” unlikely in the extreme. weakly regulated insurance markets don’t benefit from competition. it is a race to the bottom. and it’s not just single payer extremists who say this, scarecrow has written about this on several occassions as well.
that’s doesn’t mean there aren’t reasons to support a public option, but they are primarily humanitarian and not market based.
The insurance industry report released today has the effect of making Max Baucus and his criminal FinComm bill look like it is opposed by the insurance industry, when we all know the insurance industry WROTE the bill. But Max gets to look like he stood UP to the insurance industry. Obama too.
All this on the eve of the FinComm’s big vote.
re single payer. usually more than half, and over a number of years:
http://www.wpasinglepayer.org/PollResults.html
excellent analysis. thanks.
That’s what I meant when I said that pols might have encouraged the industry to write such a report: makes the pols look like they aren’t industry tools. And yes, the timing, which is obvious now that you mention it, but I hadn’t thought about it, is completely deliberate.
Heh. THAT’s why they postponed the Baucus vote! The AHIP study wasn’t quite ready for publication.
If the insurance industry didn’t like the bill, why didn’t they say so when their minions were writing it? It makes no sense to save these objections for the eve of the Committee vote. They were “in the room” the entire time, right? Or their revolving-door functionaries were.
Why object now?
Unless, of course, they aren’t really objecting, but simply providing political cover for Baucus and the White House.
The tax on full benefits – not “high” or “luxurious” insurance plans – is meant to decrease the value of the currency. It’s meant to redefine what it means to be insured. Rental car companies succeeded with this gambit when they redefined the size of a “full-size” car. Ice cream manufacturers did it when they uniformly down-sized “a gallon” to something less, while keeping their prices the same. Gillette does it when increases the size of its deodorant dispensers, fills them with the same 2.25 oz., then puts decals on them that say, “New, larger size.”
If this name game succeeds in redefining low benefits plans as the new norm, above which you incur a penalty, it would put an artificial cap on government subsidies and allow insuresters profits to grow, because you’ll have to pay extra for full benefits, assuming you can obtain them at any price.
Taxing full benefits plans is also a direct attack on the unions who negotiated them, whose members have seen their protections and other deferred compensation gains tossed out in bankruptcy court, even though they’ve already put in the labor given in exchange for them. You’d think abject submission to Rahm’s agenda was more important than meeting his constituents’ needs.
There are less manipulative ways to control costs that don’t attempt to sell paper dresses as if they were cotton. (And that’s before we get to any of the fine print.)
They start with attacking insurance companies processes and profits, because they impose social costs that are unacceptable and more than our collective pocketbooks can bear. But that picks up only about the first 20%. Then we have to fix the system built around avoiding the limits the insurance companies artificially imposed, which rewards procedures rather than outcomes. And then there are the market abuses of drugs and medical device manufacturers.
Poor Rahm. He must find it so exasperating that Democrats might prefer to protect their health and jobs, their education and constitutional expressions of speech and assembly, more than they want to protect his coffers, which he’s stuffing with cold, hard lobbyists’ cash.
Make war right back at them
Single payer, besides being the clearly best policy choice, would carry this political advantage, that it would be a death sentence on the health care insurance industry. There wouldn’t be anyone to fund these faked up studies, or to contribute to campaigns, or to threaten to contribute to someone else’s campaign, because the industry would be defunct, and dead men write no checks.
The AHIP report highlights what the industry chooses to highlight, but it is not “bogus”.
- PWC are “the Oscar people” but they also audit a quarter of U.S. public companies. If they are untrustworthy, the country is in big trouble.
- Premiums will go up faster under Obamacare. This is exactly what happened in Massachusetts, and anyone who disagrees has the burden of providing refuting data.
- AHIP’s report leaves out subisidies because they are irrelevant to the point that AHIP is trying to make, which is that premiums will go up. Subsidies are indexed to wages and will quickly become trivial if premiums rise.
- Even if employers and insurers restructure their benefits to avoid the excise tax it does not mean consumers won’t see higher premiums. If Joe Cadillac stops subsidizing everyone, then everyone has to pay a bit more.
i.e. which means that more of the public is for single-payer than for the PO, if we can assume that their first preference is for single-payer.
My thoughts exactly. In fact, this is one of the main attractions of Medicare for All — getting rid of a criminal industry.
I have the cure. Single-payer as fast as we can get it. But in the interim freeze health insurance prices. That will remove the problem temporarily, until everyone can be enrolled in Medicare for All. It’s time to reset this debate and have the fight and the debate we need to have over single-payer.
Outlaw for-profit health insurance and be done with all this base foolishness. Profiting on denial of needed healthcare is immoral. Put all Americans in the same insurance pool, and take out the profit, and it costs every person less. How much sense does this have to make?