AHIP’s insurer bad faith backfires, makes the case for the public option

Posted by AzBlueMeanie:

America's Health Insurance Plans (AHIP) bought a seat at the table in the Obama health care reform initiative. They were an insider, along with big Pharma, a partner in the process whose active opposition to health care reform was allegedly silenced as a result of making them a partner in a "grand bargain."

The White House had been warned for months that AHIP is not a reliable partner and is not to be trusted.

Those warnings have now proved true. Health Insurance Lobby Release Report on Baucus Bill AHIP released a report by PriceWaterhouseCoopers that comes to the conclusion that the Senate Finance Committee bill is a bad, bad thing and would lead to health care costs going up even faster than they are under the current system.

Bad faith from the insurance industry, who could have guessed?

The White House was quick to condemn the report. White House Slams Industry's Audit Of Health Reform Bill White House spokeswoman Linda Douglass called the report a "self-serving analysis" from an opponent of any kind of health insurance reform.

"It comes on the eve of a vote that will reduce the industry's profits," Douglass told TPMDC. "It is hard to take it seriously. The analysis completely ignores critical policies will lower costs for those who have insurance, expand coverage and provide affordable health insurance options to millions of Americans who are priced out of today's health insurance market or are locked out by unfair insurance company practices."

The Senate Finance Committee also slammed the report. Senate Finance Committee Slams AHIP Report:

"This report is untrue, disingenuous and bought and paid for by the same health insurance companies that have been gouging too many consumers for too long as they stand in the way of reform yet again.   Now that health care reform grows ever closer, these health insurers are breaking out the same, tired playbook of deception to prevent millions of Americans from getting the affordable, accessible care they need.

Advocacy groups jumped all over the report. Advocacy Groups Jumping On AHIP Report From the AARP: The AHIP report is not "worth the paper it's written on."

Accounting giant PricewaterhouseCoopers has issued a statement about the audit it performed for America's Health Insurance Plans (AHIP).  Accounting Firm Admits Cost Savings Left Out Of Report Prepared For AHIP Report:

America's Health Insurance Plans engaged PricewaterhouseCoopers to prepare a report that focused on four components of the Senate Finance Committee proposal:

*Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.

*An excise tax on employer-sponsored high value health plans.

*Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers.

*New taxes on health sector entities.

The analysis concluded that collectively the four provisions would raise premiums for private health insurance coverage. As the report itself acknowledges, other provisions that are part of health reform proposals were not included in the PwC analysis. The report stated on page 1:

"The reform packages under consideration have other provisions that we have not included in this analysis. We have not estimated the impact of the new subsidies on the net insurance cost to households. Also, if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated."

So AHIP decided the contours of the study and then cherry-picked the data they wanted. AHIP got what they paid for.

AHIP's strong-arm tactic has backfired. Democrats are saying the America's Health Insurance Plans report has helped unify the party around the health care bill(s). Taking Stock Of AHIP Report – Last 36 Hours Have Galvanized Both Sides The DNC's Brad Woodhouse referred to it as the "AHIP Hatchet Job" and warned that anyone using the "phony" report will be subject to one of the party's "Call you out" campaigns.

"This should lay to rest any notion that the AHIP report has any credibility whatsoever or that it should be used by members of Congress in their deliberations over health insurance reform," Woodhouse said.

"Any Republican that uses the report should double-check to see how much money they've received from the industry as that'll be a very easy rebuttal for Dems to hit back," said Kurt Bardella of Rep. Darrell Issa's (R-CA) office. Republican Aide Cautions Use of AHIP Report: Check Your Donations First

Despite being caught red-handed in cherry-picking data from a report lacking any credibility, AHIP is continuing to engage in insurer bad faith by issuing talking points today to local insurance offices across the country. Secret AHIP Talking Points: Mandates Good, Public Option Bad Read the AHIP document here.

Rep. Anthony Weiner (D-NY) was on the Rachel Maddow Show Monday night making the point that AHIP's insurer bad faith has unwittingly made the case for a robust public option, if not a single payer system.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Transcript of 'The Rachel Maddow Show' for Monday, October 12:

SHUSTER: Congressman Weiner, it's nice to see you again.

REP. ANTHONY WEINER (D), NEW YORK: My pleasure. Thanks.

SHUSTER: Congressman, first of all, the report assumes no behavioral changes whatsoever in response to the new propose policies. That seems like a dead giveaway that this report is flawed. But what's your view?

WEINER: Well, the one behavioral change we are clearly not going to see is the insurance companies aren't going to suddenly start saying, "You know what, we are going to stop making 30 percent profits and cut it down to 10 percent or 5 percent because of this bill." You know, they unwittingly did this but they made the single best argument I've seen in a while for why you need a vigorous competitor for the health insurance industry, namely, the public plan. They are freely saying that it doesn't matter what you guys in Congress do. We are going to keep raising our rates, raising our rates.

You know, there is a word for this. It's called chutzpah. They are, right now, on the eve of this vote, saying, "You know what, since you didn't put a public option in, we are going to raise the rates" in their own calculation, "by 111 percent." They really do seem to have no shame about the way they're perceived, but many of my colleagues saw this report and are responding in exactly the opposite way that I think the insurance industry thought we'd respond.

SHUSTER: And these are colleagues of yours who may have been on the fence as far as trying to rein in the for-profit insurance companies?

WEINER: Well, you know, a lot of us are wondering what-what's going on here. Here it is, we are giving the insurance companies millions of new customers, because we're going to require people to get coverage, and their way of saying thanks is, on the eve of the vote, to say, "You know what, you can do that but we're still going to raise rates."

But the fact that they are going to raise rates is actually a rare moment of honesty for this industry. They are saying, clearly, that unless they have some competition, they aren't going to contain costs themselves. You know, I started a website CountdowntoHealthcare.com where we're using it to put pressure on some of the more moderate members of my party. But we're going to circulate this health care report as an example for why you need the public option.

* * *

WEINER: We've got to understand how the health insurance industry works and they're not venal people. But they want to take inasmuch money as they can and pay out as little as they can for health care. That's what their shareholders demand, and that's what they are rewarded for in the marketplace.

The problem is, that's exactly the opposite of what we, in Congress, should be advocating for. We should be advocating for as little as possible coming out of consumers' pockets and as much health care coming out of that.

So, that's the conflict we have, and the insurance industry today loud and clear announced, "You know what, we don't care what you do in Congress, we are going to keep raising rates." Which is why if we don't have a single-payer plan like Medicare for all Americans, which is something I would support, we have to very at least have to have some form of competition in order to keep them honest.

* * *

SHUSTER: The White House has been fairly critical of the health insurance industry, but publicly, the industry hasn't fought back. They've been trying to portray themselves as partners, not adversaries. Is something very different going on in the halls of Congress now?

WEINER: Well, you know what? The health insurance industry, so far, has gotten a lot of what they wanted in the finance committee bill that's going to be passed out tomorrow. They didn't get a strong public option. There's very little true cost containment in there and they got the requirement that more customers will be driven to their doorstep because of there's a mandate for coverage.

And when we try to do even the most modest form of a public option, they have fought back vigorously.

Look, there's no doubt about it. When you consider the hundreds of billions of dollars each year don't go into health care, they go into health insurance company profits. When we do nothing to compete-to make sure that they compete for-in pharmaceutical industry, for example, so we get the lowest prices, just like you might get at Wal-Mart, they don't want any of those changes to happen. And, frankly, that's where Congress has to get a spine and stand up to these industries.

SHUSTER: Congressman Anthony Weiner, Democrat from New York, a fierce advocate of the public option, even single-payer-and, Congressman, thanks for your time today. We appreciate it.