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AHIP Fail (UPDATE: Epic Fail!)

The Association of Health Insurance Providers (AHIP) released a broadside against health care reform yesterday in the form of an AHIP-funded “study” (PDF) which says reform will cause insurance premiums to go up 111% over the next ten years. That sounds awful until you realize that premiums have already doubled in the last ten years and show no sign of slowing down.

Coming the day before the Senate Finance Committee is expected to vote on its bill, AHIP’s move is a fail on many levels. The White House quickly debunked it, followed by the AARP, then MIT economist Jonathan Gruber, and finally Ezra Klein at the Washington Post:

Seriously engaging with its methodology probably gives it more credit than it deserves, making this seem like an argument between two opposing sides as opposed to a predictable industry hit job.


It’s true, as the report says, that buying better insurance will cost somewhat more than buying insurance that doesn’t cover anything. The vast majority of the people affected by this will be using subsidies, of course, but put that aside for a moment. This is part of the point of health-care reform: Insurers will no longer have the freedom to offer products that let an individual think his family his protected when the policy will do nothing of the sort. That may raise prices, in much the way that antibiotics cost more than herbal supplements, but it raises prices because it reduces the insurance industry’s ability to sell a deceptive and insufficient product. (Emphasis mine)

AHIP President Karen Ignani spent the afternoon ducking substantive questions about the analysis. New York Representative Anthony Weiner’s instant reaction stood in for most Democrats:

That should be a tell to the Baucus team that you know what, maybe it’s time for them to go back and revisit the public option. In a strange way, and look, obviously they didn’t mean this, the health insurance lobby today fired the most important salvo in weeks for the public option, because they have said, as clear as day, left to their own devices, according to their own number crunchers, they’re going to raise rates 111%. (Emphasis mine)

AHIP earned significant blowback as Senate aides told TPM the report only made reform more possible. Indeed, the only dismay is on the part of Max Baucus, effectively thrown under the bus by his financial contributors after successfully delaying reform by months. As Chris Weigant put it last night,

I have little sympathy for Baucus at this point, when he complains that his adversaries have had time to put out a report attacking his bill. Because there is one reason that they’ve had all that time. And Max Baucus needn’t look further than his own mirror to see it.

Keep going, insurers! You’re doing great!

UPDATE: The Senate Finance Committee voted 14-9 to pass their version of the bill. Olympia Snowe voted with Democrats. AHIP epic fail!

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