Reality Check on AHIP's Health Insurance Report
Yesterday, on the eve of a key vote in the Senate Finance Committee, the insurance industry group America's Health Insurance Plans (AHIP) released a report falsely suggesting that health care costs would increase with health reform. As Linda Douglass of the White House Health Reform Office explained:
"It is hard to take it seriously. The analysis completely ignores critical policies 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."
AHIP is a Washington, D.C., based association that has been fighting efforts to enact reform all year, and the study released yesterday relies on selective and subjective analysis throughout. The White House quickly responded with a detailed look at the report, debunking the key claims:
AHIP CLAIM: Health reform will cause health care premiums to rise faster than they would under the current system.
REALITY: The Congressional Budget Office and other analysts confirm that the current Senate Finance Committee (SFC) health reform proposal will lower health care premiums in the exchange and make health insurance more affordable for families.
AHIP CLAIM: Taxes on the highest cost health plans – so called "Cadillac" plans – will raise the cost of employer-based coverage. This is the single largest driver of AHIP’s assumed $4,000 premium increase in the large group market.
REALITY: The majority of health economists from all parts of the political spectrum have arrived at precisely the opposite conclusion — a tax on insurers that provide the highest cost health plans will contribute to lowering premiums. Even AHIP’s study acknowledges that insurers are like to lower premiums in response to this tax change.
AHIP CLAIM: The failure to enact an individual responsibility requirement will increase costs in the individual market by creating an incentive for people to wait until they are sick to purchase coverage. This is the single largest driver of AHIP’s assumed 49% premium increase in the individual market.
REALITY: AHIP incorrectly downplays the responsibility requirement in the SFC proposal, which, in the context of comprehensive reform, will increase coverage by providing an incentive for the uninsured to enter the system.
AHIP CLAIM: Reductions in Medicare spending will raise costs for families. Part of the premium increases that the AHIP analysis assumes stems from "provider payment cuts" in Medicare and Medicaid, leading to cost-shifting onto private plans.
REALITY: Health insurance reform will strengthen Medicare. Once again, the assumptions in the AHIP analysis are not consistent with the facts of the bill that they are analyzing.
You can read the full Reality Check on the AHIP report at WhiteHouse.gov.
