I think we should scrap the Baucus bill and go for a fundamental overhaul of the health care system:
Here's an extended Reality Check to set the record straight:
AHIP CLAIM: Health reform will cause health care premiums to rise faster than they would under the current system.
REALITY: The Congressional Budget Office and other analysts confirm that the current Senate Finance Committee (SFC) health reform proposal will lower health care premiums in the exchange and make health insurance more affordable for families. AHIP’s study reaches its flawed conclusion for at least three reasons:
· Selective analysis: the AHIP study picks and chooses which policies to consider, ignoring the full benefits of the SFC proposal. For example the AHIP analysis completely ignores:
o Grandfather policy that assures that if you like the plan you have, you can keep it.
o Special policies for young adults, who AHIP claims will be hit hard, including premium credits and the choice of a special "young invincibles" plan that has a low premium.
o Reinsurance and risk-adjustment policies proven to ensure that no single group bears unexpectedly high costs.
· Ignores historic investments in lowering premiums: In addition to cherry-picking policies to analyze, the AHIP study ignores the fact that the SFC reform proposal would provide tax credits to make health insurance affordable and help reduce the current $1,000 hidden tax imposed on families with coverage by those who seek care in emergency rooms.
o Eighty-five percent of people obtaining health insurance in the exchange would be eligible for new tax credits to make health insurance affordable. In addition, their out-of-pocket expenses on health would be capped. The AHIP analysis completely ignores the impact of these tax credits and cost-sharing protections.
· Does not take into account other policies to bend the cost curve – including ones that the consultant AHIP paid to produce this study has recommended to reduce costs. Pricewaterhouse Coopers itself has published reports confirming that investments like those in the SFC proposal – including in prevention and in reducing waste – will help bend the long-term health cost curve.
AHIP CLAIM: Taxes on the highest cost health plans – so called "Cadillac" plans – will raise the cost of employer-based coverage. This is the single largest driver of AHIP’s assumed $4,000 premium increase in the large group market.
REALITY: The majority of health economists from all parts of the political spectrum have arrived at precisely the opposite conclusion — a tax on insurers that provide the highest cost health plans will contribute to lowering premiums. Even AHIP’s study acknowledges that insurers are like to lower premiums in response to this tax change.
· The AHIP study acknowledges that the impact of this plan will be for insurers to reduce premiums by creating more efficient plans. The report states: "we expect employers to respond to the tax by restructuring their benefits to avoid it." However, the study then assumes away this conclusion in its analysis.
· In addition, the AHIP study reaches its conclusion by assuming that the assessment provision will apply to some of the lowest cost "bronze" plans by 2016. This is at odds with the facts. In fact, premium data from the Congressional Budget Office suggest that the Bronze plan premium will be at half the Cadillac tax cap level in 2016.
· A bipartisan group of health economists recently found that a tax on insurers offering high cost health pans was one of the "key opportunities for slowing long-term spending growth in the Baucus proposal."
AHIP CLAIM: The failure to enact an individual responsibility requirement will increase costs in the individual market by creating an incentive for people to wait until they are sick to purchase coverage. This is the single largest driver of AHIP’s assumed 49% premium increase in the individual market.
REALITY: AHIP incorrectly downplays the responsibility requirement in the SFC proposal, which, in the context of comprehensive reform, will increase coverage by providing an incentive for the uninsured to enter the system.
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