In an Oct. 13 NewsBusters post about the newly released PricewaterhouseCoopers study, paid for the the insurance lobby America's Health Insurance Plans, claiming that health care reform will result in higher health care costs. Tom Blumer asserts:
Understand this: When PwC prepares a report for the health insurance industry projecting, in the Wall Street Journal's words, that "the Senate Finance Committee’s big health-care bill would raise health insurance premiums by thousands of dollars a year," one can be confident that it is based on exhaustively researched and thoroughly reviewed work.
Actually, not so much.
the PwC study itself states that "[t]he reform packages under consideration have other provisions that we have not included in this analysis. We have not estimated the impact of the new subsidies on the net insurance cost to households." And as Len Nichols of the New America Foundation details, the study contains questionable assumptions -- that all Medicare savings will be converted into private sector cost shifts, and that premium growth in the absence of reform will be the same as per capita health care cost growth.
Further, the thoroughness of the PwC study was debunked by, er, PwC:
America's Health Insurance Plans engaged PricewaterhouseCoopers to prepare a report that focused on four components of the Senate Finance Committee proposal:
-- Insurance 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.
-- New taxes on health sector entities.
The analysis concluded that collectively the four provisions would raise premiums for private health insurance coverage. As the report itself acknowledges, other provisions that are part of health reform proposals were not included in the PwC analysis. The report stated on page 1:
"The reform packages under consideration have other provisions that we have not included in this analysis. We have not estimated the impact of the new subsidies on the net insurance cost to households. Also, 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."
As the Washington Post's Ezra Klein summed up: "In other words, PWC is saying that AHIP paid it to focus on four parts that AHIP didn't like and ignore everything else in the bill. On Page 1, PWC embedded a disclaimer essentially admitting that their report was woefully inadequate."