Health Care Experts Release Statement on Misleading AHIP Report
Under CAP’s auspices, a group of leading health care experts released the following statement today regarding AHIP’s misleading hit-job on health reform:
Recently America’s Health Insurance Plans (AHIP) released a study that claims the reform plan being developed by the Senate Finance Committee would dramatically raise the cost of health insurance. We believe the study is flawed and that the results are not credible.
The AHIP study is misleading in several ways. First, it ignores critical elements of the insurance market reforms in the Senate Finance Committee bill that would protect people from many of the problems AHIP purports to analyze; it would grandfather existing coverage, provide reinsurance and risk-adjustment, and introduce special policies for young adults. More importantly, the AHIP study ignores the many provisions in the Senate Finance Committee’s reform plan that would help to streamline medical care delivery and reduce its cost, including changes in payment methods, provisions to encourage use of information technology and comparative effectiveness, and the establishment of insurance exchanges to lower the administrative costs associated with health insurance. In fact, one of the policies that AHIP criticizes, the imposition of taxes on ‘Cadillac health plans’ would, in the view of most economists, be a powerful force to reduce the cost of health care. Finally, it is important to note that most of the spending in the draft legislation will go for subsidies that directly lower the cost of health insurance for families and individuals with low or modest income. The report simply ignores this massive source of savings for millions of American households.
Important issues are at stake in health reform. There is ample room for legitimate debate. But responsible participants in that debate should avoid selective use of evidence and try to preserve analytic balance.
The signatories are Henry J. Aaron (Brookings), David Cutler (Harvard), Judy Feder (Georgetown and CAP), Elliot Fisher (Dartmouth Medical School), Arnold Milstein (UCSF School of Medicine), Len Nichols (New America), and Meredith Rosenthal (Harvard).
Politically, one can hold out hope that AHIP’s slam will actually improve things. Max Baucus bent over backwards to produce a version of reform that’s friendly to the interests of insurance companies. If they’re seen as stabbing him in the back nonetheless, then one hopes his level of interest in protecting them from a public option will wane. And if House progressives can get their way on a robust public option, then it seems more likely that they could be persuaded to let Baucus have his way on the excise tax issue. That would get the final legislation on the right side of two of the most contentious points.
12 Responses to “Health Care Experts Release Statement on Misleading AHIP Report”
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October 13th, 2009 at 11:24 am
I don’t know who CAP is, but I’m happy to see the pushback against that mess that AHIP is putting out. The signatories to the statement appear to be very credible.
And I sure do hope that AHIP has managed to shoot themselves in the foot. In fact, both feet–AMPUTATE!
October 13th, 2009 at 11:35 am
It’s always amusing to see paid liars call others dishonest.
The only thing more amusing is watching the idiots who still believe Obama can pull off some sort of loaves and fishes schtick and deliver more care to more people at lower cost flail about.
The truth is that ObamaCare will provide less care to more people at greater cost overall.
That may or may not be a desirable goal but it really is tedious to hear the Lefties try to obfuscate reality.
October 13th, 2009 at 11:39 am
The truth is that ObamaCare will provide less care to more people at greater cost overall.
That may or may not be a desirable goal but it really is tedious to hear the Lefties try to obfuscate reality.
OK, OK, you’re onto us. We really just want to make sure everyone has less health care, and make it cost more. Anything to get us closer to socialism!
(Just don’t tell anyone, or you’ll have to face the death panels.)
October 13th, 2009 at 11:58 am
… because Americans are too stupid to pull off what the rest of the civilized world already has?
Why do you hate America?
October 13th, 2009 at 12:09 pm
1) While I don’t put any credence in AHIP, I do wish I could see where the Democrats are actually ..you know .. reforming healthcare.
2) Can anyone here or at CAP point me to the actual bills with the actual language spelling out exactly how they will “obtain savings by reducing inefficiency”? Especially if they are not going to include a Public Option?
Because otherwise, it seems to me that Max Baucus and Obama are just stealing $500 Billion out of a grossly underfunded Medicare Fund and using the money to buy votes from those not currently covered. Because they don’t want to raise taxes on the Superrich to pay for their plan nor do they want to offend wealthy campaign donors in the insurance industry.
3) If the Democrats are actually going to reform Healthcare, then why have we NOT heard a single fucking explanation from them over the past 9 months re exactly how they propose to do that?
4) If you guys don’t demand some fucking FACTS and specific Plans then you are just as credulous and stupid as the morons who get their opinions spoonfed into their brains by Fox News.
October 13th, 2009 at 12:19 pm
That may or may not be a desirable goal but it really is tedious to hear the Lefties try to obfuscate reality.
Interesting and revealing use of the word “reality.” Apparently, what’s “real” is not the empirical fact of numerous health care systems in the developed world that provide comparable quality care for more people at lower cost, but rather the a priori assumption that the private market always and everywhere provides the most efficient outcome.
October 13th, 2009 at 12:29 pm
Excerpts From an Associated Press report on the Baucus/Obama Plan:
———–
“One of the biggest unanswered questions is whether the legislation would slow punishing increases in the nation’s health care costs, particularly for the majority who now have coverage through employers. The insurance industry insists it would shift new costs onto those who have coverage.
Congressional Budget Office Director Douglas Elmendorf, under questioning by Republican senators, acknowledged that the bill’s total impact on the nation’s health care costs is still unknown. The CBO has been able to establish that the legislation would reduce federal government deficits, but Elmendorf said his staff has not had time to evaluate its effects on privately insured people. Government programs pay about half the nation’s annual $2.5 trillion health care tab.
Expanding coverage to the uninsured is likely to lead to more health care spending, Elmendorf said. But other provisions, such as a tax on high-premium health care plans, could push spending down. “We simply have not done the analysis to net that out,” he said.
One Democrat expressed misgivings about the legislation. Sen. Ron Wyden of Oregon said the bill doesn’t do enough to promote consumer choice and guarantee affordability. “We clearly have more to do,” Wyden said, without revealing how he’ll vote.”
October 13th, 2009 at 12:44 pm
From LA Times article re Baucus/Obama Plan:
“And in a bid to satisfy the business community, Baucus significantly weakened requirements on employers to provide insurance.
Whereas the House bill threatened businesses with annual payrolls above $750,000 with a penalty of as much as 8% of their payroll if they did not provide insurance, Baucus capped any penalty to $400 per worker for businesses with more than 50 employees.
Baucus’ bill also places no requirement on businesses to pay a minimum percentage of the cost of their workers’ premiums. The House bill requires employers to pay 72.5% of the insurance premium for workers with individual policies and 65% for workers with families.
To help pay for his bill, Baucus has proposed a series of excise tax on insurance plans worth more than $8,000 for singles and $21,000 for families, and new fees on insurers, drug makers, device makers and clinical labs.
In contrast, House Democrats’ healthcare legislation relies heavily on a surtax on high-income taxpayers.”
Ref: http://www.latimes.com/news/nationworld/nation/healthcare/la-na-health-baucus17-2009sep17,0,3042131.story?page=2
————–
Oh — so if I am a CEO I can either spend $15,000 per employee to provide that employee’s family with decent healthcare — or I can pay a $400 fine.
Gee.. guess which option I am going to choose?
Corporations compete with each other on showing profits in order to remain viable on the Stock Market. What in the Baucus /Obama plan halts the ongoing spiral down to a Walmart style private insurance plans for corporate employees??
October 13th, 2009 at 12:49 pm
Obama has assured us that we won’t be forced to give up our private insurance plans. But Matt Taibbi tried to warn us in his Rolling Stone article that that may turn out to be a ..er..sick joke:
—————-
“Another favor to industry buried in the bills involves the issue of choice. From the outset, Democrats have been careful to make sure that a revamped system would not in any way force citizens to give up their existing health care plans. As Obama told the American Medical Association in June, “If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.”
That sounds great, particularly in conjunction with the new set of standards for employer-provided insurance outlined in the House version of reform. Under the bill — known as HR 3200 — employers must provide “essential benefits” to workers or face a stiff penalty. “Essential benefits” includes elements often missing in the fly-by-night plans offered by big employers: drug benefits, outpatient care, hospitalization, mental health, the works. If your employer does not offer acceptable coverage, you then have the right to go into one of the state-run insurance “exchanges,” where you can select from a number of insurance plans, including the public option.
There’s a flip side, though: If your employer offers you acceptable care and you reject it, you are barred from buying insurance in the insurance “exchange.” In other words, you must take the insurance offered to you at work. And that might have made sense if, as decreed in the House version, employers actually had to offer good care. But in the Senate version passed by the HELP committee, there is no real requirement for employers to provide any kind of minimal level of care. On the contrary, employers who currently offer sub-par coverage will have their shitty plans protected by a grandfather clause. Which means …
“If you have coverage you like, you can keep it,” says Sen. Sanders. “But if you have coverage you don’t like, you gotta keep it.”
This grandfather clause has potentially wide-ranging consequences. One of the biggest health care problems we have in this country is the technique used by large employers — Walmart is the most notorious example — of offering dogshit, bare-bones health insurance that forces employees to take on steep co-pays and other massive charges. Low-wage workers currently offered these plans often reject them and join Medicaid, effectively shifting the health care burden for Walmart employees on to the taxpayer. If the HELP committee’s grandfather clause survives to the final bill, those workers who did the sensible thing in rejecting Walmart’s crap employer plan and taking the comparatively awesome insurance offered via Medicaid will now be rebuffed by the state and forced to take the dogshit Walmart offering.
This works out well for the states, who will get to purge all those Walmart workers from their Medicaid rolls. It also works great for Walmart, since any new competitors who appear on the horizon will be forced to offer genuine and more expensive health insurance — giving Walmart a clear competitive advantage. This little “glitch” is the essence of the health care reform effort: It changes things in a way that works for everyone except actual sick people.
Veteran legislators speak of this horrific loophole as if it were an accident — something that just sort of happened, while no one was looking. Sen. Ron Wyden of Oregon was looking at an early version of the bill several months ago, when he suddenly realized that it was going to leave people stuck with their employer insurance. “I woke up one morning and was like, ‘Whoa, people aren’t going to have choices,’” he recalls.
As a means of correcting the problem, Wyden wrote up a thing called the Free Choice Act, which like many of the prematurely sidelined ideas in this health care mess is actually quite sensible. The bill would open up the insurance “exchanges” to all consumers, regardless of who is offered employer-based insurance and who isn’t. But Wyden has little hope of having his proposal included in later versions of the bill. Like Sanders, who hopes to correct the committee’s giveaway to drugmakers, Wyden won’t get a real shot at having an impact until the House and Senate meet to hammer out differences between their final bills. In a legislative sense, the bad ideas are already in the barn, and the solutions are fenced off in the fields, hoping to get in.”
Ref: http://www.rollingstone.com/politics/story/29988909/sick_and_wrong/5
October 13th, 2009 at 1:01 pm
Sadly Led @ 6 Obama has already ruled out those other systems as models for American reform.
What we get instead are cuts to Medicare that are the usual “waste & fraud” bs but in reality are cuts to an already underfunded system and a mandate with no restraints on the costs of insurance or care itself.
Oh and by the administration’s own figures insufficient subsidies.
This is “reform”?
October 14th, 2009 at 5:24 am
AHIP can now inherit its windfall, and be able to say they were forced into it with a gun to their head.
October 15th, 2009 at 11:12 am
AHIP not as flawed as CAP suggests. But it makes for good theater.
Bend the cost curve? Medicare fix for doctors promised by Reid.
Why unions are upset over taxing cadillac plans:
Obamacare Tax Frays Middle-Class Vow
By Kevin A. Hassett | Bloomberg.com
Monday, October 12, 2009
Lost in the discussion about health care and its cost is the question of who will pay for it. A closer look reveals that despite the president’s campaign promises, he and the Senate intend to leave the bill with the middle class.
iStockphoto/Christopher Meder
The U.S. Senate’s version of Obamacare finally is emerging into broad daylight, and the more people see of it, the less popular it should be.
For all the rhetoric, the plan is quite easy to sketch, thanks in part to an analysis by the congressional Joint Committee on Taxation.
So here goes: Under the health-care plan advanced by Senate Finance Committee Chairman Max Baucus, lower- and middle-class people who have insurance today are going to be taxed and squeezed in order to cover people who don’t.
The money to finance the new entitlement comes from two main sources, tax increases and Medicare cuts. Medicare cuts are mostly borne by elderly folks with modest means. That undoubtedly explains why seniors are so concerned.
Democrats always seem to promise that they will finance their dreams by taxing the rich. And they always seem to increase taxes on everyone.The tax increases, by contrast, have received little attention. There has been almost no discussion of the simple question: who would pay the tab?
Think about how unusual that is. It is a radical departure from past tax debates. When President George W. Bush was in office, every tax proposal, no matter how minor, seemed to be buried by a blizzard of detailed distributional analyses that went from think-tank Web sites to the front pages of your favorite newspaper instantaneously.
In this debate, the distributional-industrial complex has remained silent.
Such remarkable silence in the noisiest town on earth can only be caused by an uncomfortable truth. And the mother of all uncomfortable truths is lurking below the surface in the health debate. If you are a card-carrying member of the left-wing establishment, you can’t analyze the distributional consequences of the health bill, because if you do, you will catch President Barack Obama in a lie.
Campaign Promise
Think back to the 2008 election, when Obama promised again and again that he would not increase taxes on the middle class.
“And if you’re a family making less than $250,000 a year, my plan won’t raise your taxes one penny–not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your taxes,” Obama told an audience in Orlando, Florida, in August 2008, something he repeated at almost every opportunity.
In one way the statement is true. If your income is less than $250,000, Obama will not raise your taxes by just a penny. The hit will be much more painful than that.
We know that now because Senator Orrin Hatch, Republican of Utah, asked the Joint Committee on Taxation to perform the distributional analysis nobody else would. The committee’s analysis was provided to him in a letter dated Sept. 17. I received a copy a week later.
Tax on Plans
The report focused on the main revenue-raising step of the Baucus plan, an excise tax on high-cost insurance plans. At the time of the analysis, the Baucus plan held that if you have an insurance plan with a high premium (exceeding $8,000 per individual or $21,000 per family), your insurance company would pay a tax of 35 cents for every dollar that your plan exceeds the threshold.
The goal of the tax is to raise revenue to cover the uninsured and to discourage these so-called gold-plated plans, which some say encourage excessive medical care.
Ostensibly the excise tax is a tax on insurers. But as with other excise taxes (gasoline, cigarettes), the cost would undoubtedly be passed on to the consumer, in the form of more expensive insurance. Or firms might stop offering generous plans and increase wages commensurately, which would also increase tax revenue.
The analysis by the Joint Committee on Taxation concluded that tax payments would indeed rise. And it found that the middle class would be stuck with the tab.
87 Percent
The report projected that the excise tax would raise about $52 billion in 2019. Of that, about $8.9 billion would come from taxpayers with incomes of less than $50,000; about $19.4 billion from taxpayers with incomes between $50,000 and $100,000; and about $17.4 billion from taxpayers with incomes between $100,000 and $200,000.
Add those up, and you see that about 87 percent of the revenue in the original Baucus proposal to finance Obamacare would come from individuals with incomes of less than $200,000.
Baucus and the Senate committee have since upped the proposed tax to 40 percent, and the trigger thresholds to $9,850 and $26,000, tweaks that shouldn’t change the basic thrust of the story. The Democrats’ plan is a moving target–and given who will pay the tab, that is probably on purpose.
The remarkable thing is that this revenue comes from low- and middle-income people who already have insurance. Many members of organized labor have these “gold-plated” plans. And they would be worse off, not better, because of Obamacare.
Democrats always seem to promise that they will finance their dreams by taxing the rich. And they always seem to increase taxes on everyone.
There they go again.
Kevin A. Hassett is a senior fellow and the director of economic policy studies at AEI