Today, America's Health Insurance Plans (AHIP) has released a study that says the Baucus health-care bill will end up costing families much more than advertised. The report may harm the White House's chances for getting health care passed just as some political observers were beginning to call health-care reform a sure thing -- particularly after the Congressional Budget Office analysis showed the bill reducing the deficit.
"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," Karen Ignagni, AHIP's president and chief executive, wrote to board members Sunday. "Between 2010 and 2019 the cumulative increases in the cost of a typical family policy under this reform proposal will be approximately $20,700 more than it would be under the current system."
At the heart of the argument is whether the Finance Committee bill does enough to draw young, healthy people into the insurance risk pool. By postponing and reducing penalties on people who do not sign up for health insurance, industry analysts predict it would attract less-healthy patients who would drive up costs.
Are AHIP's concerns totally bogus? Not entirely -- Ezra Klein pointed out last week that there were years where the subsidies to families would be cut sharply in order to make the bill shrink the deficit. Jonathan Cohn explains that while AHIP may be right about things such as the weakness of the individual mandate in the Baucus bill being problematic, the report simply ignores the parts of the bill that will put downward pressure on costs.
At any rate, despite the hype this seems far from a knockout punch, since there's still time to fix things in conference if the bill passes the finance committee, and some of the things that AHIP wants changed health-care reform advocates probably want, too. It's mostly politically frustrating for the White House, which seems to have assumed that all the "relevant stakeholders" had been placated. By "relevant" of course, I mean moneyed interests, not, you know, the American people.
UPDATE: Ezra has more on AHIP's study, calling it "comically deceptive" and pointing out that if the insurance industry is so scared of the current legislation that they're putting out misleading reports, maybe that's a sign that liberals should be supporting this bill.
-- A. Serwer
