by Deb Cupples | When people truly have data on their side, they rarely waste time fudging data.
As my co-blogger Bartleby mentioned yesterday, a report released on Sunday questionably indicates that private health insurance premiums would go up if the federal government enacts a plan to gives us ordinary folks relief from skyrocketing health-insurance premiums.
Fact: despite a lack of a federal government intervention, from 2000 through 2007 the nation's top-10 insurance companies managed to raise our premiums enough that their profits went from $2.4 billion to $12.9 billion (i.e., profits more than quadrupled).
Back to Sunday's report. Who paid for it? An insurance-industry group called America's Health Insurance Plans.
Who was paid to crunch and interpret the numbers? Big-4 accounting firm Pricewaterhouse Coopers: a name that many people trust -- despite all those public-company annual reports, done by Pricewaterhouse, that had to later be "re-stated."
Even without reading the report, the inherent conflicts of interest should raise red flags for anyone who heard about the report's reform-unfriendly conclusions: 1) the insurance industry opposes a any reform that would reduce the number of our dollars flowing into industry coffers, and 2) Pricewaterhouse likely knew on which side of the health-care-reform debate its paying client wanted the report to fall.
But we don't need to rely on sensibly inspired red flags, because M.I.T. economist John Gruber quickly responded to the report by analyzing it, pointing out flaws, and refuting conclusions. The New York Times reports:
In other words, the folks at Pricewaterhouse ignored important factors when coming up with client-friendly (i.e., insurance-industry friendly) conclusions.
"Mr. Gruber, who helped Massachusetts with its effort to provide universal health insurance coverage, said that the industry report failed to take into account administrative overhead costs that he said will “fall enormously” once insurance polices are sold through new government-regulated marketplaces, or exchanges.
"And Mr. Gruber said that the PricewaterhouseCoopers report failed to take into account government subsidies that would be provided to help moderate-income Americans purchase insurance. PricewaterhouseCoopers acknowledged in its report that it did not factor in the effect of those subsidies." (NY Times)
What can one expect from insurance execs who spent millions lobbying Congress against giving us ordinary folks the freedom to choose a public, non-profit insurance option -- the same folks who spent mega money trying to scare ordinary folks away from the public option over the absurd notion of death panels, the same folks who spent mega money trying to create the impression that most Americans actually prefer having to pay more money (to insurance folks) for health insurance?Dr. Gruber's analysis of Congressional Budget Office data says pretty much the opposite of what Sundays insurance-industry-sponsored report says. While the industry report concludes that premiums would go up, Dr. Gruber concludes that many Americans would save money if the Senate Finance Committee's recent proposal were enacted:
* a 25-year-old making only $19,000 a year would save about $685 a year* a 60-year-old making $40,600 would save about $4,100 a year
* a family making $38,000 would save about $8,550 a year.
Two benefits to us ordinary folks, according to Dr. Gruber: 1) that insurance costs would not be increased, and 2) that policies would not be revoked simply because we got sick.
The downside for insurance execs is that they would funnel less of us consumers' money into their personal bank accounts, because we would be sending less of our money to said execs.
This is the real reason, I'd lay odds, that insurance execs are working overtime and spending millions upon millions of their shareholders' money (which comes from us premium-paying consumers) grasping at straws and formulating easily refutable arguments against real health-care reforms that would actually save us ordinary folks money.
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