Graph of the Day: Oldie but Goodie- AHIP and Premiums

Average Health Insurance Premiums-1

Today AHIP, the health insurance leading lobbying group, issued a report announcing that under Senate Finance reform insurance premiums will rise 111% by 2016.  There are too many problems with this assertion to name, notably MIT economist Jonathan Gruber finds the bill will lower premiums. Igor Volsky, Jonathan Cohn, and Ezra Klein all point out problems with the study.

It comes down to this:

-The study design left out many aspects of the current Senate Finance bill that will actually save money.

-The public plan will reduce costs and make the system more affordable.  Sounds like AHIP just endorsed a public plan.

-The study assumes the individual mandate penalty is so weak that the worst possible scenario would occur, when CBO estimates based on a history of proven behavior.

One must also remember over the last 10 years the insurance companies AHIP represents have increased premiums well beyond 111%.  Since the companies represented by AHIP will decide premium rates, AHIP is asserting that under reform premiums will not grow at the rates AHIP is currently setting.  You’ll still pay less than they would probably charge without the reform, and you’ll get a better product.


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