Health insurance lobby fires opening salvo as battle goes public
After months of professing to support health care reform in public while working behind the scenes to bury the provisions they don’t like, AHIP – the primary lobby for the health insurance industry – has dropped a report that claims the Baucus bill will cause health care costs to go up faster than they already are.
With the finance committee scheduled to vote on their bill tomorrow, the unexpected missile has hit with a loud explosion, signaling the end of behind the scenes battling and the opening volley in the health insurance industry’s air war against the American people, the White House and Congress.
The report, prepared by the accounting firm Pricewaterhouse Coopers, directly contradicts the determination made by the CBO last week projecting that the Baucus bill would reduce the federal budget by about $80 billion over ten years suggesting, instead, that the bill will cause premium costs to rise dramatically over the coming years.
So, what has the insurance industry’s knickers in a bunch?
The watered down individual mandate penalties contained in the Senate Finance Committee’s mark up. The insurance industry is arguing that by postponing and lowering the penalties for not buying insurance, younger and healthier people will avoid purchasing coverage while less-healthy individuals will, thus driving costs higher.
In a letter to the governing board of the insurance lobby, AHIP chief executive, Karen Ignagni, wrote-
The report makes clear that several major provisions in the current legislative proposal will cause healthcare costs to increase far faster and higher than they would under the current system. Between 2010 and 2019 the cumulative increases in the cost of a typical family policy under this reform proposal will be approximately $20,700 more than it would be under the current system.
Via LA Times
The AHIP report has left both the White House and the finance committee feeling snookered and angry as, just last week, Ignaci had met with both White House and committee officials and indicated that AHIP was “a ways away from doing an analysis,” knowing full well that the Pricewaterhouse accountants were already busy at work.
Setting aside the duplicitous behavior of the health insurance lobby, as I noted in my post of October 7th, mandated purchase of insurance may not be all that it has been cracked up to be. If we use the experience of the states who have played in this arena, the results have not been particularly promising.
While the AHIP report will give some cover to Republicans on the finance committee, it should not prevent the finance bill from passage tomorrow.
The report does, however, reveal something of the insurance company strategy as a final bill makes it way to the floor of the Senate for debate.
The health insurance companies are going to the mats. Let’s hope the White House and the Congress are ready for the onslaught.
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I do admit to finding a certain amount of pleasure in seeing the insurance industry going after Baucus.
The AHIP report by PWC was an obvious hatchet job. Just read Ezra Klein’s piece on it here: http://voices.washingtonpost.com/ezra-klein/2009/10/the_insurance_industrys_decept.html
Klein also notes that PWC was hired to produce “analysis” for the tobacco industry about how a tobacco tax would be terrible for the economy.
Incidentally, PWC has been counting the votes at the Academy Awards for the past 75 years (http://www.pwc.com/us/en/pwc-and-the-oscars/index.jhtml). If anyone wants to start a letter writing campaign to put an end to that in retaliation for this AHIP hit piece, I’ll be the first to sign on.
I read Klein’s piece and it is a very good analysis. The funny part is that the report is likely to convince more people that stricter penalties on the mandates are a good idea because the insurance companies don’t like it. That’s unfortunate, as I’m far less convinced that the mandates will lead to a happy ending in health care reform.
In response to another comment. See in context »Don’t you live in Hollywood? Who should I talk to if I want to start a letter-writing campaign imploring the Academy to stop using PWC to collect/count ballots? If PWC is going to pull this shabby crap, America’s version of the Nobel Peace Prize committee shouldn’t employ them and give them great PR every year.
In response to another comment. See in context »You would want to talk to the Academy of Motion PIctures Arts & Science.
In response to another comment. See in context »Young healthy people would rather pay the fine and opt out of insurance. That is the premise of this report. Maybe, maybe not. Why pay a fine and get nothing and if something goes bad be saddled with debt.
More likely the reasoning is this: I can’t afford health care so why bother? Money is the problem, jobs that offer health insurance are not rejected by young people. All this weekend the radio was filled with health care experts claiming that young have plenty of money for the big screen and x box. Now I know why.
If lack of funds is the problem most likely in play wouldn’t the government be picking up the tab anyway or at least a portion of it? Young people do buy car insurance even if it is the minimum for a used car. They are required to buy and do.
The question that came to my mind in hearing that the insurance companies plan to raise fees is, “What’s to stop them?”
Could this be an excuse for a giant windfall, a hurricane of profit to come? Yet in every television and radio report I have heard today the discussion takes the side of insurance…we need to increase fines instead of these companies can raise rates whenever they want for whatever reason.
This should be taken as a dire warning or flat out blackmail and the only counter to this arrogance is a public option.
I love how Anthony Weiner turned their argument on their head by saying this proves we need a public alternative:
http://www.alternet.org/rss/breaking_news/95407/_weiner:_ahip_report_makes_strongest_case_in_weeks_for_public_option/