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Tilting at Windmills

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October 13, 2009

PWC UNDERCUTS AHIP.... When America's Health Insurance Plans (AHIP), the trade association for private health insurers, released its dire report yesterday on the potential for rising premiums, it probably thought it was going to have a real impact.

It did, but not the one insurers hoped for.

When the pushback against the AHIP report started yesterday, the trade association said it relied on the research of PricewaterhouseCoopers (PWC). Last night, the firm undercut its own document.

PricewaterhouseCoopers, the authors of AHIP's report, put out a statement last night that basically said, "Hey, we weren't paid to evaluate the effects of the entire bill, but rather a small slice of it." The statement only seems to reinforce critics' view that the report is skewed precisely because it doesn't take into account the totality of reform. PWC's report estimates that insurance premiums will rise faster under the proposed reforms than under the current system.

The last, and key, line from the statement: "If other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated."

In other words, PWC is saying if reform's cost containment measures work, their estimate could be wrong.

In a nutshell, Democratic policymakers have included measures to lower premiums in the reform proposal. The AHIP report largely pretended those provisions don't exist, and came to a very misleading conclusion.


Remember, for opponents of reform, looking out for the interests of private insurance companies is paramount. Insurers sure are proving themselves worthy of conservatives' fealty, aren't they?

Suzy Khimm added, "Activists on the left have long insisted that insurance companies aren't to be trusted. But up until now, it's been hard to make the charge stick, since the insurance lobby -- a.k.a., America's Health Insurance Plans -- has been cooperating with the White House and its allies. AHIP's new paper, though, may have changed things. In the last day, the specious claim that reform would raise premiums has provoked a fast and furious response, uniting everybody from the White House to AARP against a common foe. And that unity could have policy implications."

Steve Benen 11:25 AM Permalink | Trackbacks | Comments (13)

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Wow! And here I am thinking that PWC was in the pockets of the drug companies/health care companies/GOP. Just goes to show you.

Now, if we can just get LIEberman to quit his job....

Posted by: stevio on October 13, 2009 at 11:33 AM | PERMALINK

interesting moment -- if there truly is a true reaction to the untruths of one of the prime interests in preventing health care reform.

what has happened? when did anyone get serious about all the crap slung about everywhere? it's not like there wasn't other crap slung ceaselessly. hmmm, maybe it's because this crap is precise, clear and distinct.

Posted by: neill on October 13, 2009 at 11:36 AM | PERMALINK

Much like one of the earlier estimates of HCR by the CBO, which was later revised to reflect actual costs (or savings), it is the first report that is trumpeted, and rarely (if ever) the revision.

This is what Digby refers to as "Cokie's (Roberts) Law"--once it's 'out there' it's considered fact. Regardless of whether a correction surfaces and/or if subsequent data completely refutes what was put out first.

Whatever message those who own the airwaves want to put forth is what gets airtime. Talk shows, 'news' segments, whatever--they have a meme, and by God they're going to run with it, facts be damned.

Posted by: terraformer on October 13, 2009 at 11:53 AM | PERMALINK

I'm thinking AHIP is a closet liberal group - they did manage to make insurance companies look bad the day before an important vote.

Go AHIP! What's next, a study showing that insurance companies will send $10,000 bills to all poor people?

Posted by: Ohioan on October 13, 2009 at 11:58 AM | PERMALINK

neill, I'll tell you why this crap sticks. Because for the first time, despite efforts from some incredibly well-meaning proponents of health insurance reform, the debate has largely been right versus left, dems versus Repubs, cons versus progs. And the politicians (D's AND R's) who are in the pockets of the insurance companies have been happy to let that impression stick. After all, it looks good for the base to be seen sticking it to the other side who doesn't want what they tell us we need.

The problem is, this issue is not left versus right. It's not even truth versus lies, per se. It's the insurance companies versus the American People. What the insurance companies are doing to the American People transcends politics, though it does seem that more often they can get the schnozzles on the right to play ball, and more on the left are fighting for reform.

What AHIP did yesterday was cut through all the partisan rhetoric, and with a misleading, fundamentally flawed document, told ALL of us "Hey, we have a plan in place to screw you out of SOOOO much money over the next 10 years - the cost of your health plan will more than double, JUST LIKE IT MORE THAN DOUBLED OVER THE PREVIOUS 10 YEARS! But if you don't let us screw you how we PLANNED to screw you, we'l screw you over even worse! Count on it, bitches!"

This is waking some people up to the question of "hey, is there anything we can do to make sure the insurance companies DON'T screw us anymore?" Why, yes, yes there is. If your elected representatives are willing to fight for it and vote for it and not get in the way." Making sre they do those things is up to you.

Suddenly, most of America is "Us," and a small group of incredibly rich (and going to get richer while we get poorer) sons of bee stings are the "Them." For one brief shining moment, the health care debate transcends politics and town hall meetings. Awful examples of the victims of recission and bogus claims of the evils of socialized health care not necessary. The health care companies are screwing us all and are defending their right to screw us, doing their best to make screwing us all the law with no penalties for their screwing.

I, for one, CAN NOT WAIT to see how the Democrats take this gift of a talking point - the thing that makes the horrors & greed of the insurance companies obvious to all who must eventualy deal with them - and totally muck it up.

Posted by: slappy magoo on October 13, 2009 at 12:00 PM | PERMALINK

This is really not new news - at least not to those who have dealt with "reports" by these scum before. PWC has been known as a rent-a-whore company since they were just Price-Waterhouse 30-odd years ago.

Back in 1978-79, when Jimmy Carter was afraid of Jerry Brown deciding to run for President again in 1980, the department of Health Education and Welfare (now known as Health and Human Services) hired Price-Waterhouse to come out to California and "audit" all sorts of different federally-financed/State of California-operated welfare programs. The one I was personally aware of was the state's support of drug treatment programs. Price-Waterhouse came out and did their job, issuing a "report" that excoriated the State for all kinds of mismanagement of drug treatment programs. Several state analysts (myself among them) did a review of the report - we found that the Price-Waterhouse people had not looked at the books of the organizations they "reviewed" and had actually demonstrated (in the report) a fundamental misunderstanding of how the system operated. The report was completely debunked on all points.

Of course, it took 8 months to debunk it, with a total cost to the State of California approaching a million dollars (serious money back in those days). As I recall, Price-Waterhouse got something like $10 million for the studies from HEW.

And people wonder why I don't trust CPA's.

Posted by: TCinLA on October 13, 2009 at 12:04 PM | PERMALINK

If you look at the report it seems the insurance companies shot themselves in the foot anyway. The number AHIP is reporting is that a family insurance premium will be about $4000 more under the new system in 10 years. But even if we leave things alone (which is presumably what they want) a family premium will still be $21,900 in 2019. It's bizarre that they would promote this as a good thing. It's like debating over whether to drive your car into a telephone pole at 90 mph or 95.

Posted by: ArkPanda on October 13, 2009 at 12:04 PM | PERMALINK

PWC are consultants. They are saying that they did what their client asked them to do. It is not that their work was flawed, it is that their client asked them to do it this way.

Posted by: vor on October 13, 2009 at 12:31 PM | PERMALINK

PricewaterhouseCoopers was paid to write a report, not speculate on public policy which is beyond their expertise.

Posted by: Al on October 13, 2009 at 12:31 PM | PERMALINK

i read you,slappy -- i guess i already see it as the corps vs us, and have for so long that this piece of crap is hardly dif from what all the hacks, dupes and thugs have been saying for months...

hope more of us get it that it aint just the medical insurance corps -- it is ALL OF THEM and the whole idea of them in our society.

Posted by: neill on October 13, 2009 at 12:33 PM | PERMALINK

I had the same reaction to the AHIP report as others: that it gave evidence of the need for a public option.

Now that it's undercut by its own authors, showing how crass AHIP was in commissioning it and how unprofessional PWC was in agreeing to evaluate costs without looking at savings, it is even BETTER evidence of the need for a public option to give people an alternative to dealing with these immoral companies.

Thanks, AHIP.

Posted by: Cal Gal on October 13, 2009 at 1:10 PM | PERMALINK

First lesson of posting to Political Monthly: three links and you automatically get caught for moderation. Until and unless my overly linkish post shows up I would challenge people to look up the search string 'HR3200 $6 billion surplus'. In the least covered story of late July both Speaker Pelosi and House Ways and Means trumpeted a CBO staff score that showed that a combination of HR3200 (the Tri-Committee Bill) and a change in Pay-Go rules relating to Medicare physician payments netted out at a $6 billion 10 year surplus. This got ZERO coverage in the MSM but got picked up by a couple of insurance related blogs and some diarist on dKos.

There are two numbers floating around HR3200 that did get picked up. One is $1.042 trillion. This is the cost CBO reported when examining the cost of extending coverage in isolation. The other is $239 billion. This is the net score from CBO after inclusion of programmatic changes to Medicare. But it seems no one caught the additional proposal that would score $245 billion in CBO baseline savings for a net $6 billion surplus. People are falling all over themselves patting Baucus on the back for producing a package that covers 94% of the non-elderly legal population and saving $81 billion over ten-years while ignoring the analysis that shows for $75 billion more we can get that up to 97% of that same population. Of course you have to include a strong Public Option and a tax on the top 5% to do it so expect some squeals from the pigs at the trough. But I think when you get some side-by-side apples to apples CBO scores of the 2.0 version of the House Bill and the blended SFC/HELP Bill combined with the AHIP hit piece this debate is headed a whole new place from where it appeared to be going just a few weeks ago.

AHIP overplayed their hand here. Too bad, so sad.

Posted by: Bruce Webb on October 13, 2009 at 2:55 PM | PERMALINK

Thanks for that pointer, Bruce Webb.

Posted by: CWC on October 13, 2009 at 11:49 PM | PERMALINK
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