| All hell broke loose on the 'Tubes when an insurance industry trade group - AHIP - announced plans to release a study showing Congress' healthcare reform would result in rate hikes: an extra $4,000 per family in 2019!
In the hallowed tradition of the tobacco and energy industries, the health insurance industry has commissioned a report (pdf) projecting doom and despair for those who seek to reform its business practices. The report was farmed out to the consultancy PricewaterhouseCoopers, which has something of a history with this sort of thing: In the early-'90s, the tobacco industry commissioned PWC to estimate the economic devastation that would result from a tax on tobacco. The report was later analyzed by the Arthur Andersen Economic Consulting group, which concluded that "the cumulative effect of PW's methods ... is to produce patently unreliable results." It's perhaps no surprise that the patently unreliable results were all in the tobacco industry's favor. He who pays the piper names the tune, and all that.
Color me completely unsurprised. Even if this is all a sham intended to derail reform, who doesn't believe the insurance companies won't raise rates? Of course they'll raise rates!
I'm with Digby:
Frankly, I wouldn't expect any less of them. They will raise premiums sky high even if reforms don't pass. They always have before. Indeed, the only thing that kept them in check at all over the past 20 years was a roaring stock market, which allowed them to make huge profits while only gouging their customers at about 15% inflation. Lately, they've had no choice but to jack that up and gouge the sick customers even more. They are, after all, profit driven corporations.
Digby suspects this has something to do with an amendment capping industry tax exemptions for executive salaries at $500K instead of $1M. (Er...we allow companies to deduct executive salaries???) Digby jokes, "Nobody puts CEOs in the corner," and says this:
There has never been a better argument for the public plan than the one the insurance company just handed the Democrats in congress. They have produced a shoddy, self-serving report as a blatant threat to raise premiums higher than they already plan to raise them. If there has ever been a more obvious case of bad faith than this, I haven't seen it. The only thing that will keep these corporate criminals in line is either price controls or stiff competition and if they can't keep their companies solvent without giving their executives outrageous pay packages, charging ridiculous prices while denying care to sick people, then maybe their financial model just doesn't work.
Again, there are good elements of reform apart from the public option. Universal coverage, say, a community standard that prohibits insurance companies from discriminating against the sick. But none of this works, IMHO, without a widely available public option as a safety outlet for American consumers against rising policy costs and increased unreliability of coverage...