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Profile: America’s Health Insurance Plans (AHIP)
America’s Health Insurance Plans (AHIP) was a participant or observer in the following events:
The Senate Finance Committee, chaired by Senator Max Baucus (D-MT), holds a series of hearings about health care reform, on April 21, May 5, and May 12. In all, 41 experts testify, but none of them advocate the so-called “single-payer” form of health care, a system which essentially has the government providing health care insurance instead of private insurers—“Medicare for all Americans,” as some characterize it. [Politico, 5/5/2009; Single Payer Action, 5/21/2009] The experts are from organizations like America’s Health Insurance Plans (AHIP), the health industry’s largest lobbying firm, and health insurers Blue Cross and Aetna. Some of the invited organizations employ former Baucus staff members. [Rolling Stone, 9/3/2009] Baucus says that single-payer is “off the table,” and will not be considered. [TPM Cafe, 5/5/2009]
Health Industry Heavy Donors to Baucus - The nonpartisan organization Consumer Watchdog has reported that Baucus, one of the Senate’s most important architects of Congressional health reform, has accepted more campaign contributions from the health insurance and pharmaceutical corporations than any other current Democratic member of the House or Senate. During the last two election cycles, he received $183,750 from health insurance companies and $229,020 from drug companies. [Single Payer Action, 5/21/2009]
Protesters Disrupt Hearings - Protesters disrupt the hearings by standing up and shouting criticisms of the committee over its failure to bring single-payer into the discussion. Eight protesters are led out of the hearing room and later arrested. At one point, Baucus asks for more police officers to enforce security. The protests are organized by Healthcare Now, Physicians for a National Health Program, and Single Payer Action, all of whom support a single-payer, government-run health care system. One protester calls the hearings nothing more than “political theater.” For his part, Baucus assures the audience, “I want you to know I care deeply about your views.” [Politico, 5/5/2009] The eight protesters spend around seven hours in jail. One, Dr. Margaret Flowers, later recalls: “It’s funny, the policemen were all telling us their horror stories about health care. One was telling us about his mother who was 62 and lost her job and was uninsured, waiting to get Medicare when she was 65.” The protesters are sentenced to six months’ probation. Baucus later admits that not allowing single-payer advocates to participate in the hearings was a mistake; he will eventually agree to meet with a group of those advocates (see June 3, 2009).
Single-Payer Never Considered - In September, Rolling Stone reporter Matt Taibbi will note that Baucus, like President Obama and other prominent Democrats, has supported single-payer insurance in theory, but asserts such a proposal would never get through Congress. Journalist Russell Mokhiber, who advocates for single-payer as a member of Single Payer Action, later says that the Obama administration and Congressional Democrats made an agreement with health industry leaders months before considering legislation for health care reform that single-payer would not be part of their proposals. In return, Mokhiber will say, they asked the industry not to oppose their reform efforts, a request that the industry has generally not honored. [Rolling Stone, 9/3/2009]
Entity Tags: Aetna, Healthcare Now, Consumer Watchdog, Barack Obama, America’s Health Insurance Plans, Single Payer Action, Blue Cross, Russell Mokhiber, Margaret Flowers, Matt Taibbi, Senate Finance Committee, Max Baucus, Obama administration, Physicians for a National Health Program
Timeline Tags: US Health Care, Domestic Propaganda
Wendell Potter (r) being interviewed by Bill Moyers (l). [Source: PR Watch (.org)]Former health care executive Wendell Potter, who left the insurance giant Cigna after fifteen years, appears on “Bill Moyers’ Journal.” He was formerly the head of corporate communications before he resigned his position, a post he calls “the ultimate PR job.” He says he was not forced to leave the company, and was extremely well compensated for his duties. He left after realizing that the health care industry is using underhanded and hurtful tactics to undermine the drive towards health care reform. He never went to his bosses with his observations because, he says, “for most of the time I was there, I felt that what we were doing was the right thing. And that I was playing on a team that was honorable. I just didn’t really get it all that much until toward the end of my tenure at Cigna.”
Health Care Expo Changed His Perceptions - In June 2007, Potter recalls, his perceptions were drastically changed by his visit to a health care exposition in Wise, Virginia (see June 2007).
Changing Plans - The industry shifted from selling primarily managed care plans, he says, to what they call “consumer-driven plans.” Despite the name, they are health care plans with high deductibles and limited coverage.
'Highlight Horror Stories' - Moyers shows Potter a copy of an “action plan” devised by America’s Health Insurance Plans (AHIP), the industry’s trade association. In large gold letters, the plan tells lobbyists and industry representatives to “Highlight horror stories of government-run systems.” Potter says that AHIP and other industry representatives try to paint government-run health care as socialism, and as inevitable failures. “The industry has always tried to make Americans think that government-run systems are the worst thing that could possibly happen to them,” he says, “that if you even consider that, you’re heading down on the slippery slope towards socialism. So they have used scare tactics for years and years and years, to keep that from happening. If there were a broader program like our Medicare program, it could potentially reduce the profits of these big companies. So that is their biggest concern.” Moyers also notes that the AHIP plan targets the film Sicko, a 2007 documentary by leftist filmmaker Michael Moore that portrayed America’s health care industry in a dismal light. AHIP’s action plan is to “Position Sicko as a threat to Democrats’ larger agenda.” Potter says that was an effort to discredit the film by using lobbyists and AHIP staffers “to go onto Capitol Hill and say, ‘Look, you don’t want to believe this movie. You don’t want to talk about it. You don’t want to endorse it. And if you do, we can make things tough for you.’” If they did, AHIP would retaliate by running negative ads against the lawmakers in their home districts or other electoral punishments. AHIP focused strongly on the conservative Democratic Leadership Council. Another tactic, as delineated in the memo: “Message to Democratic insiders. Embracing Moore is one-way ticket back to minority party status.” Moyers says that AHIP attempted to “radicalize” Moore and portray him as an extremist who could not be believed. Many politicians used AHIP talking points in discussing Moore and his film. “So your plan worked,” Moyers observes. Potter agrees: “It worked beautifully.” The lesson that was lost from Moore’s film, Potter says, was that Americans “shouldn’t fear government involvement in our health care system. That there is an appropriate role for government, and it’s been proven in the countries that were in that movie.”
Conservative Counter-Strategy - Moyers then displays a memo from Republican strategist Frank Luntz, who in the spring of 2009 wrote a strategy memo for health care reform opponents. The memo reads in part: “First, you have to pretend to support it. Then use phrases like, ‘government takeover,’ ‘delayed care is denied care,’ ‘consequences of rationing,’ ‘bureaucrats, not doctors prescribing medicine.’” He then shows film clips of House Minority Leader John Boehner (R-OH), Senate Minority Leader Mitch McConnell (R-KY), Senator Jon Kyl (R-AZ), and others using Luntz’s talking points in discussions on the floors of Congress. Potter says that many conservatives—Democrats as well as Republicans—“are ideologically aligned with the industry. They want to believe that the free market system can and should work in this country, like it does in other industries. So they don’t understand from an insider’s perspective like I have, what that actually means, and the consequences of that to Americans. They parrot those comments, without really realizing what the real situation is.” He notes that Representative Zach Wamp (R-TN), who grew up very near Potter’s childhood home in Chattanooga, told reporters that half of America’s uninsured don’t want health care, they would rather “go naked and just take the chance of getting sick. They end up in the emergency room costing you and me a whole lot more money.” Potter notes that the word “naked” is an industry term for people who choose not to buy health insurance. He calls Wamp’s comment “ridiculous” and “an example of a member of Congress buying what the insurance industry is peddling.” Moyers cites conservative Democrat Max Baucus, the chairman of the Senate Finance Committee, as another politician central to the health care reform process who is heavily influenced by corporate lobbyists—two of whom used to work on his own Senate staff. Potter says: “[I]t does offend me, that the vested special interests, who are so profitable and so powerful, are able to influence public policy in the way that they have, and the way that they’ve done over the years. And the insurance industry has been one of the most successful, in beating back any kinds of legislation that would hinder or affect the profitability of the companies.”
Fierce Opposition to Public Option - The “public option,” the idea that the government would extend a non-profit, government-run health care alternative for citizens, is fiercely opposed by the health care industry. Potter says the reason why is “[t]he industry doesn’t want to have any competitor. In fact, over the course of the last few years, has been shrinking the number of competitors through a lot of acquisitions and mergers. So first of all, they don’t want any more competition period. They certainly don’t want it from a government plan that might be operating more efficiently than they are, that they operate.” Government programs such as Medicare and the Veterans Administration’s medical providers are far more efficient than private, for-profit health care providers, and the industry fears that having to compete with such a program will slash their profits. Medical companies will do whatever it takes to keep their profit margins—and shareholder returns—above a certain threshold. They will deny more claims, kick more people off their rolls, purge employer accounts, whatever it takes. Potter, evidently bemused, says, “You know, I’ve been around a long time. And I have to say, I just don’t get this. I just don’t understand how the corporations can oppose a plan that gives the unhealthy people a chance to be covered. And they don’t want to do it themselves.… I’m a capitalist as well. I think it’s a wonderful thing that companies can make a profit. But when you do it in such a way that you are creating a situation in which these companies are adding to the number of people who are uninsured and creating a problem of the underinsured then that’s when we have a problem with it, or at least I do.” A public option would help “keep [health care corporations] honest,” he says, and they would inevitably lose profits.
Predictions - Right now the industry is primarily involved in what Potter calls a “charm offensive,” where it is attempting to give the perception that it, too, is for health care reform. But once Congress begins putting out specific legislative language, the industry and its flacks will begin attacking specific provisions. Moyers says the upshot is for the industry to either “kill reform” or prevent lawmakers from agreeing on a bill, just like what happened in 1993-94 under the Clinton administration. No matter what they say—favoring the elimination of pre-existing condition restrictions, for example—the industry will adamantly oppose reform of any kind. “They don’t want a public plan,” Potter says. “They want all the uninsured to have to be enrolled in a private insurance plan. They want—they see those 50 million people as potentially 50 million new customers. So they’re in favor of that. They see this as a way to essentially lock them into the system, and ensure their profitability in the future. The strategy is as it was in 1993 and ‘94, to conduct this charm offensive on the surface. But behind the scenes, to use front groups and third-party advocates and ideological allies. And those on Capitol Hill who are aligned with them, philosophically, to do the dirty work. To demean and scare people about a government-run plan, try to make people not even remember that Medicare, their Medicare program, is a government-run plan that has operated a lot more efficiently.… [T]hey want to scare you into thinking that through the anecdotes they tell you, that any government-run system, particularly those in Canada, and UK, and France that the people are very unhappy. And that these people will have to wait in long lines to get care, or wait a long time to get care. I’d like to take them down to Wise County. I’d like the president to come down to Wise County, and see some real lines of Americans, standing in line to get their care. [PBS, 7/10/2009]
Entity Tags: John Boehner, Frank Luntz, Cigna, Bill Moyers, America’s Health Insurance Plans, Zach Wamp, Wendell Potter, US Veterans Administration, Senate Finance Committee, Michael Moore, Medicare, Max Baucus, Mitch McConnell, Jon Kyl, Clinton administration
Timeline Tags: US Health Care
The lobbying group America’s Health Insurance Plans (AHIP), funded by nearly 1,300 health care providers and other medical companies, urges its members’ employees to, in AHIP’s words, “GO TO TOWN MEETINGS WITH MEMBERS OF CONGRESS IN AUGUST TO CONFRONT THEM on House Democrats’ top recess message—that health reform legislation is ‘health insurance reform to hold insurance companies accountable’” (all caps from the source). AHIP plans on releasing negative television ads opposing the Obama administration’s health care reform proposals. According to AHIP spokesman Robert Zirkelbach: “The American people want Washington to focus on solutions, not the same old divisive political rhetoric that hasn’t worked in the past. Our industry has offered to completely transform how health insurance is provided today. We have stepped up to do our part to make health care reform a reality. That’s an INCONVENIENT FACT that some people have chosen to ignore. These attacks are politically motivated, and they ignore the significant commitment that our industry has made to the health reform process. WE’RE GOING TO BE VERY ACTIVE. We have people on the ground in more than 30 states. There are thousands of industry employees WHO HAVE NOW HAD THEIR INTEGRITY CALLED INTO QUESTION. They want to have their voices heard as part of this. We have contacted all of our member companies and encouraged them to get involved. August is a great time because of the face-to-face interaction with members.” [Campaign for an American Solution, 8/2/2009]
America’s Health Insurance Plans (AHIP), the health care industry’s trade association, distributes “talking points” for use by opponents of health care reform that specifically target the so-called “public option” for alternative government-provided health care. AHIP has been heavily involved in orchestrating and facilitating the recent spate of raucous anti-reform protests (see July 10, 2009 and August 2, 2009). The talking points, entitled “August Recess Talking Points,” include the following: “Health plans strongly believe that now is the time for comprehensive, bipartisan health care reform that enhances affordability, improves quality, covers all Americans, and puts the health care system on a sustainable path. However, we also share the concerns that employers, providers, and patients have raised about the significant unintended consequences of a new government-run plan. A government-run plan would dismantle employer-based coverage, thereby violating the shared commitment to ensure that those who like their current coverage can keep it. The government-run plan would also add significant liabilities to the federal budget.” Reporter Greg Sargent notes that like any other lobbying group or citizens’ organization, AHIP has the right to “encourage… participation and distribut[e] talking points.” However, he notes that the industry AHIP represents “has a tremendous financial stake in whether a public plan becomes a reality. And the industry is not only telling people to go to town meetings, but also telling them how to voice their opposition to a public option. Bottom line: It’s indisputable that the industry is orchestrating public opposition to one of health care reform’s most important components.” [Plum Line, 8/6/2009]
BlueCross BlueShield logo. [Source: TopNews (.us)]Health insurers have mobilized tens of thousands of employees to fight against the Democrats’ health care reform initiative, according to reports by the Los Angeles Times and the Wall Street Journal. The insurance industry’s primary motive seems to be financial gain, according to the Times reporters. Many of the nation’s largest insurers, including UnitedHealth, have urged their employees to become involved in protesting health care reform, and provided advocacy “hot line” telephone numbers, printed “talking points,” sample “letters to the editor,” and other materials in almost every Congressional district throughout the nation. And many insurers, including BlueCross Blue Shield, have sponsored anti-reform television ads targeting conservative “Blue Dog” Democrats, many of whom are considered vulnerable to pressure from the industry. The insurance industry is paying for over 900 lobbyists, spending $35 million in the first half of 2009 lobbying Congress and the White House. AFL-CIO spokesman Gerald Shea says: “They have beaten us six ways to Sunday. Any time we want to make a small change to provide cost relief, they find a way to make it more profitable.” [Los Angeles Times, 8/24/2009; Wall Street Journal, 8/24/2009]
Jamming the 'Town Halls' - Insurers like UnitedHealth and others are sending their employees to “town hall” meetings to protest against reform. The Journal reports, “[T]he industry employees come armed with talking points about the need for bipartisan legislation and the unintended consequences of a government-run health plan to compete with private insurers.” But they are instructed not to become contentious and argumentative, according to a “Town Hall Tips” memo provided by the industry’s chief lobbying organization, America’s Health Insurance Plans (AHIP—see Before August 6, 2009). The memo warns those attending the meetings to expect criticism, and to stay calm. “It is important not to take the bait,” the memo cautions. AHIP president Karen Ignagni says the town hall meetings are an opportunity “to strongly push back against charges that we have very high profits. It’s very important that our men and women… calmly provide the facts and for members of Congress to hear what these people do every day.” Larry Loew, who works for the insurance administration firm Cornerstone Group, says he attended a recent town hall meeting hosted by Representative Alan Mollohan (D-WV) because “my whole industry is being threatened.” Loew claims he was not coached by AHIP, but admits to preparing for the meeting by gathering talking points from hospital and insurance company Web sites. AHIP spokesman Robert Zirkelbach says about 50,000 employees have been engaged in writing letters and making phone calls to politicians or attending town hall meetings. [Wall Street Journal, 8/24/2009]
'Hallelujah!' - One industry proposal that is gaining traction among some in Congress is the so-called “individual mandate,” which would require all citizens to buy some form of health insurance. That provision would guarantee insurers tens of millions of new customers—many of which would receive government subsidies to help pay the premiums. Robert Laszewski, a former health insurance executive who now heads the consulting firm Health Policy and Strategy Associates, says of the provision, “It’s a bonanza.” The industry’s reaction to early negotiations can, Laszewski says, be summed up in a single word: “Hallelujah!” Linda Blumberg, a health policy analyst at the nonpartisan Urban Institute, says, “The insurers are going to do quite well” with health care reform. “They are going to have this very stable pool, they’re going to have people getting subsidies to help them buy coverage, and… they will be paid the full costs of the benefits that they provide—plus their administrative costs.” Aetna’s chief executive, Ron Williams, says: “We have to get everyone into the insurance market. That is a huge, big deal [and] everyone has coalesced around that.” [Los Angeles Times, 8/24/2009; Wall Street Journal, 8/24/2009]
Battling the Public Option, - Insurers have fought most strongly against the so-called “public option,” which would create a government-run, non-profit alternative to private health insurance. Some polls are showing public support for the public option has declined, and stock prices for the insurance corporations have tracked upwards. Other insurance industry proposals are gaining ground. The Senate Finance Committee is considering a proposal to lower the proposed mandatory reimbursement rate for insurers to policyholders from 76 percent to 65 percent, and the industry is pressuring Congress to lower the limit that insurers must meet to cover a policyholder’s medical bills, leaving more of the money it gleans from premiums as profits. “These are a bad deal for consumers,” says J. Robert Hunter, a former Texas insurance commissioner who works with the Consumer Federation of America. Insurance companies would reap huge profits by providing less insurance “per premium dollar,” he says. Former Cigna executive Wendell Potter says, “It would be quite a windfall” for the insurance industry. [Los Angeles Times, 8/24/2009]
Entity Tags: Consumer Federation of America, UnitedHealth Group, Urban Institute, Wall Street Journal, BlueCross Blue Shield, Alan Mollohan, Senate Finance Committee, AFL-CIO, Aetna, America’s Health Insurance Plans, Wendell Potter, Robert Laszewski, Health Policy and Strategy Associates, Gerald Shea, Cornerstone Group, J. Robert Hunter, Robert Zirkelbach, Ron Williams, Linda Blumberg, Karen Ignagni, Larry Loew, Los Angeles Times
Timeline Tags: US Health Care
America’s Health Insurance Plans (AHIP), the health insurance industry’s largest lobbying organization, releases a study that claims the Democrats’ health care reform initiative would send health insurance costs sharply upward. The study is released the day before the Senate Finance Committee votes on its version of the reform proposal. [The Week, 10/12/2009] AHIP says it intends to circulate the study among lawmakers on Capitol Hill and use it as the basis for new advertisements attacking the health care reform proposals. [Washington Post, 10/12/2009] NBC Washington calls the study “a surgical strike against Democrats’ best hope for passing health reform,” specifically targeting the Finance Committee’s legislative efforts, which it calls the “Baucus bill” for committee chairman Max Baucus (D-MT). Until now, AHIP has operated largely behind the scenes to delay or terminate Congressional efforts to reform US health care; the study marks its most public and overt effort to influence the discussion. According to the study, which was carried out by accounting and services firm PriceWaterhouseCoopers (PWC) and paid for by AHIP, the average cost increase would be $1,700 per family per year by 2013. “[T]he cumulative increases in the cost of a typical family policy… will be approximately $20,700 more than it would be under the current system,” the report claims. “[T]he cost of coverage for both single and family policies in the individual, small group, large group, and self-funded insurance markets” will rise dramatically. AHIP official Karen Ignagni says private insurers would almost certainly pass cost increases to consumers for a number of reasons, including her claim that too many people with pre-existing conditions would sign up for insurance. “The report makes clear that several major provisions in the current legislative proposal will cause health care costs to increase far faster and higher than they would under the current system,” she writes. Baucus calls the study “seriously flawed.” A spokesman for the Finance Committee, Scott Mulhauser, says: “Now that health care reform grows ever closer, these health insurers are breaking out the same, tired playbook of deception to prevent millions of Americans from getting the affordable, accessible care they need. It’s a health insurance company hatchet job, plain and simple.” [America's Health Insurance Plans, 10/11/2009; NBC Washington, 10/12/2009; Washington Post, 10/12/2009] An analysis of the committee’s proposal by the Congressional Budget Office (CBO) shows that while some people’s premiums would go up, the subsidies to be provided by the government would make health insurance considerably less expensive for most consumers. According to the CBO, premiums under the government “exchange” option proposed in the Baucus bill would cost consumers $14,400 per year in 2016, while the average private insurer would charge their customers $21,300 by 2016. [Think Progress, 10/12/2009] Nancy-Anne DeParle, director of the White House Office of Health Reform, says PWC is not the firm to have carried out such a study. “Those guys specialize in tax shelters,” she says. “Clearly this is not their area of expertise.” [Washington Post, 10/12/2009] Almost immediately after the study’s release, critics begin attacking it, calling it deeply flawed and an “industry hit job” (see October 11-12, 2009). And PWC itself will back away from the study’s central claims (see October 12, 2009).
Within minutes of the release of a new study by health insurance lobbying firm America’s Health Insurance Plans (AHIP) that claims health care reform would drastically raise costs to American families (see October 11, 2009), critics from different sides of the political divide dispute the study’s accuracy and question its impartiality.
White House: Study Ignores Key Elements of Reform - White House assistant press secretary Reid Cherlin says the study “conveniently ignores critical policies that will lower costs for those who have insurance, expand coverage, and provide affordable health insurance options to millions of Americans who are priced out of today’s health insurance market or are locked out by unfair insurance company practices.” [MSNBC, 10/12/2009]
'Blowback' from Study Possible - White House and Senate officials say that the insurance industry may suffer “blowback” over the report. Democrats may well close ranks behind either the Senate Finance Committee (SFC) bill or another version of the legislation, and liberal lawmakers may go after the insurance companies, maybe by proposing a cap on premiums or solidifying support for the government insurance plan. “They have opened themselves up,” says a senior Senate Democratic aide. “It is an incredibly stupid strategic blunder. If you are going to fire a shot like this, you fire a good shot.” Former industry executive Wendell Potter, who has become an industry whistleblower (see July 10, 2009), says AHIP is responding to critical analyses from Wall Street that the legislation will hurt private insurers. “Karen [AHIP official Karen Ignagni] had no alternative because the CEOs were so determined to do something to try to sway the committee to back off the reductions,” he says. “She didn’t have an alternative. They are obviously doing this on the eve of the vote in the Senate Finance Committee, hoping enough members of the committee would be concerned, to restore it. I think the strategy will backfire.” [Politico, 10/12/2009]
Economist: Study Fundamentally Flawed - MIT economist Jonathan Gruber analyzes the PWC study and concludes that it is fundamentally flawed. He writes: “The nonpartisan analysis based on information from the CBO [Congressional Budget Office] shows clearly that for those facing purchase in the non-group market, the SFC bill will deliver savings ranging from several hundred dollars for the youngest consumers to over $8,500 for families. This is in addition to all the other benefits that this legislation will deliver to those consumers—in particular the guarantee, unavailable in most states, that prices would not be raised or the policy revoked if they became ill.” On MSNBC, Gruber notes: “If the report had came out and said, ‘look we need stronger penalties, or premiums will go up,’ that’s a very valid point to make. But what the report says is that it went too far. It said with the current structure, premiums will be much higher than they are today. And that’s just wrong. I mean, the nonpartisan Congressional Budget Office has came out and said that for this bill, premiums in the exchange will be lower than they are in the none group market today. So they just drew the wrong comparison.” [Massachusetts Institute of Technology, 10/12/2009; Think Progress, 10/13/2009]
Democrats: Proof that Industry Needs Further Regulation - Representative Anthony Weiner (D-NY) says, “[T]he health insurance lobby today fired the most important salvo in weeks for the public option,” and adds that the study proves the industry needs further regulations imposed on it by Congress: “If you have the health care industry complaining that we’re going to raise costs because of these changes, it is them putting us on notice that we haven’t put enough cost containment in the bill. You know, the health care industry themselves is putting out a whole report saying that. That should be a tell to the [Senate Finance Committee] that you know what, maybe it’s time for them to go back and revisit the public option. In a strange way, and look, obviously they didn’t mean this, the health insurance lobby today fired the most important salvo in weeks for the public option, because they have said, as clear as day, left to their own devices, according to their own number crunchers, they’re going to raise rates 111 percent.” [Think Progress, 10/12/2009] Senator John D. Rockefeller (D-WV) charges the insurance industry with releasing a false study for political purposes. “The misleading and harmful claims made by the profit-driven insurance companies are politicking for corporate gain at its worst,” he says. “Their recent statements only further highlight that our focus here in Congress must be on the inclusion of a public health insurance option in the marketplace to protect families and put more money back in their wallets by creating greater competition and driving down costs.” [Politico, 10/12/2009]
Washington Post: 'Industry Hit Job' - The Washington Post’s Ezra Klein calls the report “deceptive” and “a predictable industry hit job,” and notes that the study was produced by accounting and services firm PriceWaterhouseCoopers (PWC), which in the 1990s was commissioned by the tobacco industry to do a study on the economic catastrophe that would result from taxing tobacco products. That study was found to be unreliable, and, perhaps not surprisingly, made all of its errors in favor of the tobacco industry. Klein writes that the same effect can be observed in this report on health care. He concludes: “But if the [study] doesn’t offer much in the way of trustworthy policy analysis, it is an interesting looking at the changing politics of the issue. In short, the insurance industry is getting scared. After many months of quiet constructiveness, they’re launching a broadside on the week of the Senate Finance Committee’s vote. The White House, which had a pleasant meeting with the industry’s leadership last week, was shocked by the report, and so too was the Senate Finance Committee. The era of cooperation seems to be over, and they weren’t given much advance warning. But the report might have another impact, too: The evident anger and fear of the insurance industry might do a bit to reassure liberals that this plan is worth supporting, after all.” [Washington Post, 10/12/2009]
New Republic: 'Questionable Assumptions' - The New Republic’s Jonathan Cohn chastizes PriceWaterhouse for deliberately, and explictly, choosing to believe that all the new factors included in the study will raise costs, when other analyses show that many of those factors will actually drive costs down. Cohn writes that the study is based on a plethora of “strange [and] questionable assumptions.” [New Republic, 10/11/2009]
Progressive Columnist: 'This Is News?' - Progressive columnist Josh Marshall wrote before the study was released: “Let me get this right. The big news tomorrow is that ‘America’s Health Insurance Plans’ (AHIP, aka the health insurance lobby) has commissioned a study by PriceWaterHouseCoopers that comes to the conclusion that the Senate Finance Committee bill is a bad, bad thing and would lead to health care costs going up even faster than they are under the current system. This is news?” [Talking Points Memo, 10/12/2009]
Washington Times: Defending the Study, Attacking the CBO - The conservative Washington Times defends the study as essentially accurate, and instead attacks the Congressional Budget Office, whose own figures differ dramatically from the PWC study. The Times editorial board calls the CBO’s estimates “fanciful” and “grandly overoptimistic,” and accuses the Democrats of adding opportunities for consumers to “game the system”—“It’s a mystery how the CBO can make its evaluation without once mentioning that individuals easily will be able to go without insurance while they are healthy and then buy insurance after they get sick.” The entire proposal allows Democrats to “avoid electoral accountability over the urgent health care needs of the people they say they’re trying to help but won’t.” [Washington Times, 10/12/2009]
AHIP Defends Study - Ignagni defends the study and says the lobbying firm did not release it to undermine the Finance Committee’s attempt to craft an acceptable reform bill. She says the industry’s main concern is getting everyone involved in health care to work together to bring costs down. There is a strong need, she says, to “encourage all the other stakeholders to participate in a broader effort so that they can too lend a hand and get costs under control in a much more effective way than we would.… We don’t see comprehensive cost control in any legislation.” [MSNBC, 10/12/2009]
PWC Backs Off from Study - Late in the evening, PWC issues a statement noting that the study only examined “a small slice” of the health care reform initiative, and saying that if other provisions in the reform package succeed in lowering costs, then the estimates of cost increases claimed in the study would be inaccurate (see October 12, 2009).
Entity Tags: America’s Health Insurance Plans, Anthony D. Weiner, Jonathan Gruber, Congressional Budget Office, Ezra Klein, Jonathan Cohn, Wendell Potter, John D. Rockefeller, PriceWaterhouseCoopers, Karen Ignagni, Washington Times, Obama administration, Joshua Micah Marshall, Reid Cherlin, Senate Finance Committee
Timeline Tags: US Health Care
PriceWaterhouseCoopers (PWC), the services and accounting firm that recently released a controversial study funded by the health care insurance lobbying firm America’s Health Insurance Plans (AHIP—see October 11, 2009 and October 11-12, 2009), backs away from claims that the report is comprehensive. Politico’s Chris Frates writes that the statement “basically sa[ys], ‘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 statement concludes, “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.” Frates explains, “In other words, PWC is saying if reform’s cost containment measures work, their estimate could be wrong.” [Politico, 10/13/2009]
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