The Washington Post's lead article this morning reported on the results of a study funded by the health insurance industry. Not surprisingly, the study shows substantial increases in health insurance costs. The study, done by the accounting firm Price Waterhouse Cooper, uses some assumptions that run counter to those of other analysts. For example, it assumes that companies continue to buy "Cadillac" plans at the same rate even though these plans will subject to a substantial tax. Other analysts have assumed that most employees would shift away from these high priced plans. The study also assumes that cut in Medicare/Medicaid reimbursement rates will all be passed on to private insurers rather than absorbed in part by providers. Both of these assumptions have the effect of substantially raising the projected cost of health insurance. For these reasons, the results of the study are quite suspect. It is reasonable for the Post to report on a study paid for by an interested party, but it does not belong as the lead article in the newspaper. It is inconceivable that the Post would ever give the same prominence to a study funded by the AFL-CIO or SEIU even if the methodology was beyond reproach. A labor-funded study that is as obviously biased as this one would probably not even be mentioned.
--Dean Baker
