Sins of Omission: AHIP Critics Are Just as Guilty

When the lobby from the health-insurance industry—America's Health Insurance Plans (AHIP)—released a study early this week contending that the Senate Finance Committee's health-care legislation would increase private insurance premiums beyond current law, supporters of health-care "reform" were quick to denounce the report as biased. Among the instant critics were nine prominent health-care experts, including Henry Aaron of the Brookings Institution and David Cutler of Harvard, who called the report "flawed" and "not credible." It then scolded the insurers: "Important issues are at stake in health reform ... But responsible participants in [the] debate should avoid selective use of evidence and try to preserve analytic balance."

But were the "experts" guilty of the same sin? Well, yes.

One of the advertised virtues of the Baucus plan—named after Senate Finance chairman Max Baucus—is that it pays for itself and wouldn't increase the federal budget deficit. But that claim is suspect because it depends on huge Medicare savings from fee cuts to doctors, hospitals, and other medical providers. In the past, Congress has prevented such cuts from going into effect. Counting those savings, the Congressional Budget Office figures the bill would reduce the deficit $81 billion over the first 10 years. "But Congress is sure to override the cuts in later years," argues health expert Joseph Antos of the American Enterprise Institute. If it does, the Baucus bill could add $376 billion to the deficit in the first decade and "as much as $2 trillion" in the second, Antos says. Before joining AEI, Antos was CBO's assistant director for health and human resources.

In their statement, the health-care experts critical of the insurance industry don't even mention the possibility that the Baucus bill might increase the deficit. That's not exactly "analytic balance"; it is a "selective use of evidence." The statement was released by the Center for American Progress, a liberal think tank. It asserts that the insurance-industry report, which was done by the consulting firm PricewaterhouseCoopers, ignores provisions in the bill that might control health costs and could protect against premium increases. The report argues that if insurers are required to provide coverage for all comers regardless of "preexisting conditions," then costs and premiums will go up unless there's a strong mandate for healthy people to buy insurance and absorb the higher costs. That point seems incontestable, even if the report's precise estimates of premium increases are debatable.