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AHIP goes to the dark side…Gruber uses the Force (of numbers)

By now you have most likely heard about the health insurance industry-commissioned PricewaterhouseCoopers report that projects extremely large increases in individual’s insurance premiums as a direct result of the provisions in the Finance Committee bill. Near-instant backlash emerged from both the White House and many prominent bloggers, citing it as inaccurate and misleading. Yesterday PWC threw AHIP under the bus gave full responsibility to AHIP for the variables in the report, claiming that PWC only ran the numbers they were instructed to.

MIT economist John Gruber did his own analysis of the report, and reached these conclusions:

1) The report failed to include ADMINISTRATIVE SAVINGS (from eliminating underwriting overhead, standardizing enrollment procedures, etc) as a result of newly regulated insurance exchanges.

2) The report failed to include the GOVERNMENT SUBSIDIES that would be distributed to low- and middle-income Americans in order to make insurance affordable.

3) Overall, the rate of premium cost growth would actually DECLINE over time.