White House Says Insurance Group Study is Akin to Study of What the Earth Would Look Like Flat
EmailJake Tapper and Sunlen Miller report:
The White House received some ammunition Tuesday in its efforts to discredit a health insurance industry study critical of a Senate Democrat's health care reform bill — from the accounting firm that conducted the study.
In a statement, the accounting firm PricewaterhouseCoopers seemed to acknowledge the deficiencies of its own study, prepared for America’s Health Insurance Plans, which suggested average family health insurance premiums would increase by approximately $4,000 a year if the legislation being voted upon in the Senate Finance Committee today were to become law.
PricewaterhouseCoopers was asked "to prepare a report that focused on four components of the Senate Finance Committee proposal," the group's statement said.
Those four components:
"IInsurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement; An excise tax on employer-sponsored high value health plans; Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers; (and) New taxes on health sector entities.The analysis concluded that collectively the four provisions would raise premiums for private health insurance coverage."
The PWC statement notes that the report itself acknowledges it did not estimate "the impact of the new subsidies on the net insurance cost to households" or "other provisions in health care reform" which, if "successful in lowering costs over the long term,…would offset some of the impacts we have estimated.”
One such provision, a proposed excise tax on expensive "Cadillac" plans, is intended to encourage businesses and others to seek less expensive coverage, thus lowering costs.
The PWC study states that it factored in the tax but not any anticipated behavioral changes:
"We have estimated the potential impact of the tax on premiums," the study says. "Although we expect employers to respond to the tax by restructuring their benefits to avoid it, we demonstrate the impact assuming it is applied."
Nancy-Ann DeParle, director of the White House Office of Health Care Reform, told ABC News: "Not only does (the study) not assume (any behavioral changes resulting from the tax) but it says, 'Most people think that there would be behavioral changes and these plans wouldn’t exist anymore, however, we will just assume the opposite and we’ll spread the cost around and see how much it raises premiums.'
"That's like saying, 'Most people think the earth is round but if it is flat, here is what it would look like,'" DeParle continued. "And it just seems a little ludicrous to us."
AHIP president and CEO Karen Ignagni, asked about this issue yesterday, told ABC News, "One of the most important things that should be done is for PricewaterhouseCoopers, a world class firm, to speak for itself about methodology."
But, she said, regarding Cadillac plan taxes, "that’s a very good example of how all the factors PWC is pointing to in its report add up to actually pushing people to the Cadillac levels faster. The conclusion of this report is in fact that individuals with the bronze package, the lowest package, would in fact reach the Cadillac level far faster as a result of these factors not being attended to."
- Jake Tapper and Sunlen Miller
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It would be nice for the WH to insist on a full explanation of how this will affect every group of taxpayers, and every person currently insured, before any bill is voted on.
Is anybody happy with the way the information has been provided to *us*?
As far as factoring in subsidies goes…for the taxpayers, it is still coming out of our pockets.
Whether it’s from a premium, a fee, or a tax, it’s all coming from us.
Posted by: MayBee | October 13, 2009, 11:36 am 11:36 am
They would know as they are the masters
of word games. I have not seen anything
that makes me believe that healthcare
costs will go down and the quality of
care will go up. If there still is a
segment of people who are uninsured,
then what is the point to any of this
if not just a big political game?
Unfortunately taxpayers are the losers.
How the government squanders money makes
Madoff look like a boy scount.
Posted by: wis134 | October 13, 2009, 11:42 am 11:42 am
“Is anybody happy with the way the information has been provided to *us*?”
MayBee | Oct 13, 2009 11:36:20 AM
Yes. I’m quite please with having had many months (since March) to get up to speed on the various options, lots of factchecks with verifiable data to peruse, and the Senate Finance Committee bill, posted since Oct 2, is a pretty easy and quick read (under 270 pages).
Thanks for asking.
Posted by: jhw539 | October 13, 2009, 11:51 am 11:51 am
“Obama-care Lite, in MA has been an utter failure. So what does DC do? Copy it.”
Concerned in OH | Oct 13, 2009 11:29:57 AM
Are you honestly asserting that the Finance Committee bill copies the MA program put in place by Mitt Romney? I’m never quite sure if you’re joking or just throwing out another Big Lie to see if it sticks.
Posted by: jhw539 | October 13, 2009, 11:54 am 11:54 am
“As far as factoring in subsidies goes…for the taxpayers, it is still coming out of our pockets.
Whether it’s from a premium, a fee, or a tax, it’s all coming from us.”
MayBee | Oct 13, 2009 11:36:20 AM
Unlike now, when all the costs of ER care to indigents are paid for by little money fairies and an asprin really should cost a patient actually able to pay $12.
Posted by: jhw539 | October 13, 2009, 11:56 am 11:56 am
Unlike now, when all the costs of ER care to indigents are paid for by little money fairies and an asprin really should cost a patient actually able to pay $12.
=========
What?
Posted by: MayBee | October 13, 2009, 11:58 am 11:58 am
Wait a minute.
“Nancy-Ann DeParle, director of the White House Office of Health Care Reform, told ABC News: ” (the study)… says, ‘Most people think that there would be behavioral changes and these plans wouldn’t exist anymore….’”
So the White House is now *claiming as a benefit* that some health care plans – “Cadillac” plans, plans people like – “WOULDN’T EXIST ANYMORE”!?!?!
What happened to “nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: nothing in our plan requires you to change what you have”?
Posted by: bgates | October 13, 2009, 12:02 pm 12:02 pm
“What happened to “nothing in this plan will require you or your employer to change the coverage or the doctor you have. Let me repeat this: nothing in our plan requires you to change what you have”?
bgates | Oct 13, 2009 12:02:00 PM
Nothing happened to it, it is still 100% true and valid. And it’s a Republican idea too you know, a swipe at the unions who predominately get these Cadillac deals in return for contract concessions.
Posted by: jhw539 | October 13, 2009, 12:04 pm 12:04 pm
is Akin to Study of What the Earth Would Look Like Flat
*****************************************
What? It isn’t? The ONE is so stupid!
Posted by: Thinking | October 13, 2009, 12:33 pm 12:33 pm
I won’t call the President a liar; don’t want to be tarred and feathered. BUT: if any current bill now being considered passes as it stands with the set penalty for employers who do NOT provide EGHP, I will lose my coverage. My employer pays at least at least two thousand a year per US employee for health insurance (that’s their part). What company would dare enrage their stockholders by NOT dropping EGHP when the max penalty is currently set at $400. Do the math.
Posted by: malcat | October 13, 2009, 12:41 pm 12:41 pm
Mr Tapper, An article by Ricardo Alonso-zaldivar states “At the heart of the industry’s complaint is a decision by lawmakers to weaken the requirement that millions more Americans get coverage. Since the legislation would ban insurance companies from denying coverage on account of poor health, many people will wait to sign up until they get sick, the industry says. And that will drive up costs for everybody else.
Insurers are now raising possibilities such as higher premiums for people who postpone getting coverage, or waiting periods for those who ignore a proposed government requirement to get insurance and later have a change of heart.”
This is what I find very concerning! Is it accurate?
Posted by: wow | October 13, 2009, 12:42 pm 12:42 pm
Liars Damn Liars and the White House. Discussion of the estimate of health care cost is not equivalent to assertions that the earth if flat. First the 10 year estimates are not really 10 year estimates – the program does not start for several years. Second the reduction in penalties for non-enrollment means that more people will not enroll -until they need it. Thus shifting the burden to paying members. In any event there should not be an attempt to push the legislation through until estimates of the costs are carefully reviewed. We all now what happened with the prescription coverage for Medicare.
Posted by: merchantilist | October 13, 2009, 12:48 pm 12:48 pm
“What company would dare enrage their stockholders by NOT dropping EGHP when the max penalty is currently set at $400. Do the math.”
malcat | Oct 13, 2009 12:41:52 PM
The penalty for companies dropping EGHP now is $0. Nothing. By your weird logic an employer is MORE likely to drop insurance plans if they are going to be fined? What?
Posted by: jhw539 | October 13, 2009, 12:54 pm 12:54 pm
This is what I find very concerning! Is it accurate?
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They spread the cost between us all and take out a profit. That is what they do, Period. We can do the same thing without them, and leave out the profit.
Posted by: Thinking | October 13, 2009, 1:00 pm 1:00 pm
Don’t you of the Obama/Dem/reform- opposition ilk, who seem to be defending and supporting AHIP and the report they bought, find it just the slightest bit telling that PW is backing away from the report and putting out statements that undermine their client? Hello?? Hello??? No red flags go up on that one?
I suggest you look at Gruber’s numbers instead. He’s a well-respected MIT economist. You can find a link at Ezra Klein’s blog.
Posted by: Alyson | October 13, 2009, 1:01 pm 1:01 pm
“Discussion of the estimate of health care cost is not equivalent to assertions that the earth if flat.”
merchantilist | Oct 13, 2009 12:48:40 PM
Speaking of liars… no one every made that claim. The White House certainly did not. They did make that claim in reference to a specific report the insurance companies bought, and the White House backs up their assertion with specific and verifiable accusations.
Posted by: jhw539 | October 13, 2009, 1:03 pm 1:03 pm
“They spread the cost between us all and take out a profit. That is what they do, Period.”
Thinking | Oct 13, 2009 1:00:25 PM
Not quite – they also buy a bunch of advertising, donate massively to Congress critters (mostly Republicans, but yes, some Democrats are bought too), and I hear their CEOs throw some killer parties too.
Otherwise yeah, you pretty much nailed it.
Posted by: jhw539 | October 13, 2009, 1:05 pm 1:05 pm
Are you honestly asserting that the Finance Committee bill copies the MA program put in place by Mitt Romney? I’m never quite sure if you’re joking or just throwing out another Big Lie to see if it sticks.
Posted by: jhw539 | Oct 13, 2009 11:54:17 AM
Another big lie. And as a btw to Concerned, the goal of the MA plan was near-universal coverage, and they met that goal– 97%. Now they’re working on different elements– namely, cost contaiment. If you consider the constraints of state versus federal reform, particularly during recession, it’s particularly ridiculous to compare apples to oranges.
Posted by: Alyson | October 13, 2009, 1:14 pm 1:14 pm
Alyson- did you read the comments about Gruber’s analysis?
Posted by: MayBee | October 13, 2009, 1:16 pm 1:16 pm
Not quite – they also buy a bunch of advertising, donate massively to Congress critters (mostly Republicans, but yes, some Democrats are bought too), and I hear their CEOs throw some killer parties too.
Otherwise yeah, you pretty much nailed it.
Posted by: jhw539 | Oct 13, 2009 1:05:00 PM
They give themselves some mighty nice salaries and bonuses, too– and my former boss had a private jet. In the 90s he flew to DC every weekend to meet with and pay lobbyists against Hillary’s efforts. His expense account was also very nice.
Posted by: Alyson | October 13, 2009, 1:17 pm 1:17 pm
Alyson- did you read the comments about Gruber’s analysis?
Posted by: MayBee | Oct 13, 2009 1:16:21 PM
Here or somewhere else? I read Ezra’s blog last night before there were any comments. (in other words, no, I just read the blog and the findings)
Posted by: Alyson | October 13, 2009, 1:21 pm 1:21 pm
Well, there are informative comments there now, if you are interested.
Posted by: MayBee | October 13, 2009, 1:27 pm 1:27 pm
Alyson- did you read the comments about Gruber’s analysis?
Posted by: MayBee | Oct 13, 2009 1:16:21 PM
***
Okay, now, yes, I read them. It’s far from perfect, I agree as he didn’t have much time to show his model or go into detail or an extended analysis, but I still think it’s important to look at different findings.
Posted by: Alyson | October 13, 2009, 1:27 pm 1:27 pm
thinking-
you can’t spread the cost if only sick people buy insurance. this plan gives you no incentive to buy insurance until after you are sick. that isn’t insurance.
Posted by: wow | October 13, 2009, 1:31 pm 1:31 pm
Single payer. That’s the solution.
Posted by: hank1056 | October 13, 2009, 1:48 pm 1:48 pm
thinking-
you can’t spread the cost if only sick people buy insurance. this plan gives you no incentive to buy insurance until after you are sick. that isn’t insurance.
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Universal coverage would take care of the problem. I do not care much for the current bill being discussed.
Posted by: Thinking | October 13, 2009, 2:00 pm 2:00 pm
i don’t trust any program run by the government. they have proven over and over again their incompetence.
our family buys our own insurance. high deductible, hsa account. in the long run it is cheaper then the insurance at my husbands co. you become responsible for your medical expenses. it’s smart and lowers costs because you end up thinking about your spending.
Posted by: wow | October 13, 2009, 2:10 pm 2:10 pm
The John Mackey plan (the guy from Wholefoods) is a much better plan than what is currently being considered. He has high deductible insurance coupled with a funded health saving accounts. People actually pay for the service they get. High cost items like cancer is covered by the insurance.
That plan has almost no bureaucrats and greatly reduces costs and covers every one – an inventive American plan.
It is not being considered as Mackey points out that costs are in part driven by the high malpractice insurance rates that doctors have to pay.
What am I saying. It is not a crime to be poor or rich, just to dress poorly. Derek Zoolander and the crew in congress will fix all of this. They are so cool and good looking, too!
Posted by: welldirected | October 13, 2009, 2:12 pm 2:12 pm
BREAKING NEWS: Olympia Snowe Will Reportedly Vote “Yes” on Reform Bill
By Dr. Alan J. Lipman
Published: October 13, 2009
According to a Senate committee source speaking without attribution to the Lipman Times, Republican Olympia Snowe will vote for the Democratic health care bill.
This may make Snowe the sole member of her party to vote for the Democratic health care bill.
The source told the Lipman Times the following:
“I wasn’t really surprised, especially considering Senator Snowe’s explanation that the American people want action and expect Congress to be able to address and solve the big issues of the day. She recognizes that the cost of inaction is greater than party politics.“
Posted by: cara | October 13, 2009, 2:14 pm 2:14 pm
i disagree…inaction is better then a bad plan. remember the stimulus!! wow :(
Posted by: wow | October 13, 2009, 2:19 pm 2:19 pm
When you can’t debate the facts, discredit the truth – or call your critics “poopy heads”. Simple fact is, they can call it “deficit neutral” all they want – it’s still taxpayer funded, big government SOCIALISM.
Posted by: PatF | October 13, 2009, 2:25 pm 2:25 pm
It’s pretty bad when PriceWaterhouseCoopers pretty much says “we know it’s wrong, but the lobbyists paid us to make it look the way it does.”
It’s also pretty bad when the media accepts very flawed data as fact.
Do even the rich media types understand why we need a public option yet?
Posted by: kravitz | October 13, 2009, 6:13 pm 6:13 pm
Let’s not forget the CBO also admits that it’s scoring of the bill is based on flawed assuptions from the Senate Finance Committee… that didn’t stop the maintstream media and the White House from hailing this bill as the next big step towards reform!
Posted by: Shane | October 14, 2009, 4:46 pm 4:46 pm
Let’s all remember what insurance companies do. They collect our money, pay off medical bills and keep a big chunk for their administrative expenses and for profits. They are simply a middle-man.We need a public option to keep them from constantly raising premiums, their salaries and their profits.
We simply can’t afford to leave things the way they are. More and more of us can’t afford the premiums, find our coverage cancelled or limited if we get seriously ill and our emergency rooms are too crowded with the desperate uninsured with non-emergency illnesses and thus without a doctor of their own.
With an estimated 45,000 Americans dying each year because they don’t have insurance, it is an emergency that should be dealt with now. A public option would give poor and middle-class people a chance to buy insurance that is affordable.
Posted by: Lydia | October 15, 2009, 11:20 am 11:20 am