Post by unlawflcombatnt on Oct 13, 2009 2:20:34 GMT -6
Once again, the health insurance industry is disseminating propaganda to oppose health care reform. Today's cost-analysis from America's Health Insurance Plans, performed by Price-Waterhouse, really takes the cake.
The report reaches its conclusion by omissions, half-truths and outright lies.
The biggest omission was the price-suppressing effect of a Public Option. A public option, if paid for entirely by enrollees in the plan, would compete with private insurance on prices--thus suppressing premium prices. And with lower premiums, a Public Option would draw members (and potential members) away from private insurance, forcing private insurers to lower premium prices to compete. Again, this whole concept was omitted from consideration in today's analysis.
Health insurers are also whining about the weakness of the individual mandate requiring purchase of health insurance by all Americans. Insurers claim the fines are too low, and thus less people will enroll in private insurance plans. As a result, it'll reduce the revenues health insurers take in. Somehow this will raise their costs, which they'll have to pass on to their own members.
But what a weak individual mandate really means is that health insurers themselves will be deprived of their own ability to cost-shift--by not being able to shift the cost of sick members onto the backs of healthy members. This may well raise their average costs-per-member. But that only translates into higher premiums if health insurers can dump this increased per-member cost on to their own enrollees. But with a competing, less-expensive Public Option--insurers will not be able to dump the extra per-member cost on their enrollees. In fact, quite the opposite will occur.
Furthermore, since weaker individual mandate will result in weaker demand for health insurance, it will reduce prices through the demand-price relationship.
Since the health insurance industry is among the most profitable industries around, they can certainly absorb the additional costs without raising premiums.
If member and taxpayer costs are too high, the 1st thing that needs to be dropped from the bill is the individual mandate, followed closely by the overly generous taxpayer subsidies to insurance companies
The spurious claims by the health insurance industry's recent report are self-serving self-serving and illogical. As such, these claims should be dismissed by both Congress and the American people as nonsense.
The report reaches its conclusion by omissions, half-truths and outright lies.
The biggest omission was the price-suppressing effect of a Public Option. A public option, if paid for entirely by enrollees in the plan, would compete with private insurance on prices--thus suppressing premium prices. And with lower premiums, a Public Option would draw members (and potential members) away from private insurance, forcing private insurers to lower premium prices to compete. Again, this whole concept was omitted from consideration in today's analysis.
Health insurers are also whining about the weakness of the individual mandate requiring purchase of health insurance by all Americans. Insurers claim the fines are too low, and thus less people will enroll in private insurance plans. As a result, it'll reduce the revenues health insurers take in. Somehow this will raise their costs, which they'll have to pass on to their own members.
But what a weak individual mandate really means is that health insurers themselves will be deprived of their own ability to cost-shift--by not being able to shift the cost of sick members onto the backs of healthy members. This may well raise their average costs-per-member. But that only translates into higher premiums if health insurers can dump this increased per-member cost on to their own enrollees. But with a competing, less-expensive Public Option--insurers will not be able to dump the extra per-member cost on their enrollees. In fact, quite the opposite will occur.
Furthermore, since weaker individual mandate will result in weaker demand for health insurance, it will reduce prices through the demand-price relationship.
Since the health insurance industry is among the most profitable industries around, they can certainly absorb the additional costs without raising premiums.
If member and taxpayer costs are too high, the 1st thing that needs to be dropped from the bill is the individual mandate, followed closely by the overly generous taxpayer subsidies to insurance companies
The spurious claims by the health insurance industry's recent report are self-serving self-serving and illogical. As such, these claims should be dismissed by both Congress and the American people as nonsense.