Industry Report Distorts Health Reform Cost

Insurance firms' numbers blindside Baucus bill's backers
By Nick McMaster,  Newser Staff
Posted Oct 12, 2009 2:50 PM CDT
Senate Finance Committee Chairman Sen. Max Baucus, D-Mont. smiles as he arrives at his office on Capitol Hill in Washington, Thursday, Oct. 8, 2009.   (AP Photo/Harry Hamburg)
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(Newser) – A new report that says the Senate Finance Committee’s reform bill would raise private insurance premiums is riddled with troubling exceptions, writes Jonathan Cohn. The report, commissioned by America's Health Insurance Plans, estimates the costs of premiums over time if the bill is implemented, but it doesn’t take into account the subsidies also implemented under the bill to help families pay for coverage.

So the report distorts the cost picture for many middle- and low-income families. It similarly distorts analysis of the “excise tax”—intended to end the current subsidy for expensive employer-based plans—by assuming employers will merely pay for the same plans they have today, despite the extra cost related to the tax. The whole point of the tax is that it will encourage employers to shop for more sensible plans in order to avoid it, writes Cohn for the New Republic.