The Senate Finance Committee's health care bill would increase
the cost of an average family's insurance policy by $4,000 more
than it would rise to if we were to maintain the status quo,
according to a study by PricewaterhouseCoopers, which was
commissioned by insurance industry lobbyist America's Health
Insurance Plans (AHIP).
The report highlighted four elements of the bill likely to
increase premiums: requirements that insurers cover everybody
with preexisting conditions; a tax on high-end health plans; cuts
to Medicare that will cause cost-shifting onto private plans; and
new taxes on medical device makers, drug manufacturers and
insurance companies.
The cost of private insurance, according to the study, will rise,
"79 percent between 2009 and 2019 under the current system and
during this same period if these four provisions are
implemented." In dollar terms, the report projects that by 2019,
an average family policy would cost $25,900 annually, as opposed
to $21,900 if we did nothing. For an individual policy, those
numbers would be $9,700 and $8,200, respectively.
Given that study was commissioned by the insurance industry, it
should be taken in with a grain of salt, especially because it
also argues that costs will increase because there isn't a
stronger individual mandate -- a goal of insurers. I'd take issue
with this, because for a young and healthy individual who chooses
not to purchase insurance, their annual premiums are currently $0
and merely being forced to purchase insurance would increase
their costs dramatically.
Liberal health care journalist Jonathan Cohn also questions a
number of assumptions in the report and
asks, "Is the Insurance Industry Declaring War?" One of the
stories of the health care debate has been that in contrast to
1993/94, until this point AHIP has been either cooperative or
muted in its criticism of the bills, deciding instead to try to
get the best deal that they could out of the government. But now
that they felt betrayed in many ways by Max Baucus Finance
Committee bill, they may be poised to take a more combative role.
