Dems Criticize Insurance Industry Study Showing Higher Consumer Costs Under Health Reform

Main Category: Health Insurance / Medical Insurance
Article Date: 14 Oct 2009 - 3:00 PDT

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On Monday, the White House and congressional Democrats sharply "fired back" at a new study from insurance industry group America's Health Insurance Plans that claimed the Senate Finance Committee's health reform legislation would increase premiums dramatically, the New York Times reports. The Finance Committee is scheduled to vote on the legislation today (Pear, New York Times, 10/13). AHIP sent the study to its members on Sunday (Alonso-Zaldivar, AP/Chicago Tribune, 10/12).

White House spokesperson Reid Cherlin said, "This is a distorted and flawed report from the insurance industry and cannot be taken seriously." He added, "This so-called analysis appears on the eve of a vote that may eat into the insurance industry's profits. It conveniently ignores policies that will lower costs for those who have insurance, expand coverage and provide affordable insurance options to millions of Americans" (New York Times, 10/13).

The release of the study comes after a positive turn for the legislation last week, when the Congressional Budget Office reported that the bill would provide health coverage to 94% of legal U.S. residents and reduce the federal budget deficit by $81 billion over 10 years. The study shows "the challenges that lie ahead as [President Obama] attempts to deliver the sort of health care overhaul that has eluded his predecessors for decades," the Washington Post reports. The administration had sought to neutralize attacks from care providers, insurers, drugmakers and other industry players who worked to defeat President Clinton's health care effort in the 1990s (Connolly, Washington Post, 10/12).

Robert Blendon, a health policy pollster and political analyst at Harvard University, said he does not believe the study is a "bill-stopper," adding, "The momentum is way too far (in favor of passing a reform bill), and there is a sense that something has to be done" (Budoff Brown, Politico, 10/12).

Report Details

The AHIP report, conducted by accounting firm PricewaterhouseCoopers, found that the average cost of family coverage will rise from $12,300 to $18,400 in 2016 under current law but would increase to $21,300 by 2016 if the Finance Committee bill is adopted and the majority of its proposals take effect in 2013. According to the report, the cost of individual coverage will increase from $4,600 to $6,900 under current law but would increase to $7,900 under the Finance Committee bill (Pear, New York Times, 10/12).

Democrats Criticize Methodology

Nancy-Ann DeParle, director of the White House Office of Health Reform, dismissed PwC as a reliable source, saying, "Those guys specialize in tax shelters," adding, "Clearly, this is not their area of expertise" (Washington Post, 10/12).

Finance Committee spokesperson Scott Mulhauser said the study failed to account for the legislation's proposals to lower the cost of coverage, such as tax credits (AP/Chicago Tribune, 10/12). He added, "This report is untrue, disingenuous and bought and paid for by the same health insurance companies that have been gouging consumers for too long. Now that health care reform grows ever closer, these health insurers are breaking out the same, tired playbook of deception. It's a health insurance company hatchet job, plain and simple" (Warner, "NewsHour with Jim Lehrer," PBS, 10/12).

Reprinted with kind permission from http://www.nationalpartnership.org. You can view the entire Daily Women's Health Policy Report, search the archives, or sign up for email delivery here. The Daily Women's Health Policy Report is a free service of the National Partnership for Women & Families, published by The Advisory Board Company.

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