Whose Numbers Would You Trust?
As the U.S. Senate attempts to merge bills from its Finance and Health committees, considerable controversy surrounds the data being used to support -- or detract from -- proposed measures.
For example, in a report prepared for America's Health Insurance Plans (AHIP), PricewaterhouseCoopers (PwC) examined the impact of the Senate Finance Committee's health reform bill. AHIP cited the PwC analysis in voicing concerns about the bill's cost.
According to the PwC report, the cost of the average family health care policy is approximately $12,300 today and will rise to:
- $15,500 in 2013 under current law and to $17,200 if [the bill's] provisions are implemented.
- $18,400 in 2016 under current law and to $21,300 if [the bill's] provisions are implemented.
- $21,900 in 2019 under current law and to $25,900 if [the bill's] provisions are implemented.
Between 2010 and 2019 the cumulative increases in the cost of a typical family policy under this reform proposal will be approximately $20,700 more than it would be under the current system, the PwC report stated.
The Center for American Progress (CAP) responded with a statement claiming that the AHIP/PwC study is flawed and the results are not credible.
The statement -- signed by Henry J. Aaron, Brookings Institution; David Cutler, Harvard University; Judy Feder, Georgetown University (and senior fellow at CAP); Elliott S. Fisher, Dartmouth Medical School; Arnold Milstein, Institute for Health Policy Studies, University of California-San Francisco School of Medicine; Len Nichols, New America Foundation; and Meredith Rosenthal, Harvard University -- read as follows:
The AHIP study is misleading in several ways. First, it ignores critical elements of the insurance market reforms in the Senate Finance Committee bill that would protect people from many of the problems AHIP purports to analyze; it would grandfather existing coverage, provide reinsurance and risk-adjustment, and introduce special policies for young adults.
More importantly, the AHIP study ignores the many provisions in the Senate Finance Committee's reform plan that would help to streamline medical care delivery and reduce its cost, including changes in payment methods, provisions to encourage use of information technology and comparative effectiveness, and the establishment of insurance exchanges to lower the administrative costs associated with health insurance. In fact, one of the policies that AHIP criticizes, the imposition of taxes on "Cadillac health plans" would, in the view of most economists, be a powerful force to reduce the cost of health care.
Finally, it is important to note that most of the spending in the draft legislation will go for subsidies that directly lower the cost of health insurance for families and individuals with low or modest income. The report simply ignores this massive source of savings for millions of American households.
Important issues are at stake in health reform. There is ample room for legitimate debate. But responsible participants in that debate should avoid selective use of evidence and try to preserve analytic balance.
From another perspective, Joseph Antos, Health Care and Retirement Policy Scholar at The American Enterprise Institute for Public Policy Research (AEI), pointed out budget assumptions built into the Finance Committee's bill. Before joining AEI, Antos was Assistant Director for Health and Human Resources at the Congressional Budget Office (CBO).
According to Antos:
The CBO has calculated that the Finance Committee bill will reduce the federal deficit by $81 billion over the first 10 years, and even more after that. However, the favorable budget score is based on the assumption that Congress will follow through on massive cuts to Medicare providers. Even the CBO questions the reality of those proposed cuts. In particular, the [Finance Committee] bill includes automatic cuts in Medicare payments to hospitals and other health care providers worth $240 billion. Congress is sure to override the cuts in later years.
Similar cuts to physicians have been "deferred" in each of the past five years, and the [Finance Committee] bill once again provides a one-year fix. Raising payments to physicians one year at a time means $217 billion in additional spending through 2019 that is not counted in the bill.
It is likely that the [Finance Committee] bill will add as much as $376 billion to the federal deficit through 2019. A $240 billion increase will result from the proposed -- but most likely never implemented by Congress -- cuts to hospitals, home health agencies, and other Medicare providers. Also not acknowledged in the bill are the $217 billion from higher physician payments if Congress continues to provide relief one year at a time from the formula-driven pay cuts. (That is $217 billion + $240 billion = $457 billion less $81 billion in savings = $376 billion extra cost.)
Amid such divergent views being circulated in Washington, Senate Majority Leader Harry Reid will lead the effort to combine the Finance bill with the Senate Health panel measure. According to an Associated Press report, Reid wants to get health care overhaul legislation onto the Senate floor by the end of October.
Whose numbers would you trust if you were in your senator's shoes?