Monday, October 12, 2009

Ezra Klein analyzes the insurance industry's report

Ezra Klein takes a look at the report the insurance industry released today which stated their belief that insurance premiums would rise if the healthcare bills in Congress become law. They make some deceptive assumptions:
Economists think that the tax on high-cost health-care plans will lead employers and consumers to demand cheaper plans that do more to control costs. In fact, PWC expects that, too. They just don't build it into their estimate. On Page 6, they say, "Although we expect employers to respond to the tax by restructuring their benefits to avoid it, we demonstrate the impact assuming it is employed." That's a bit like saying although I expect to eat doughnuts this morning, I will instruct my scale to act as if I had abstained.
And Ezra looks at what they're really trying to communicate with this document:
In other words, the insurers want health-care reform to have a stronger mandate, which will require substantially more spending, which means we'll need more revenue. But they oppose all the new revenue streams that help pay for the bill, and they oppose the major sources of savings that help offset the remaining cost of the bill. And they say the Finance Committee's numbers don't add up? That's some chutzpah, as my grandmother would say.
UPDATE: An MIT health economist has run the numbers and finds that health premiums would actually fall under the changes that Congress is proposing. More here, again from Ezra... and even more from Marc Ambinder.

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