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D. Brad Wright Headshot

How Insurance Companies Are Like Strippers

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The big news this week, other than the outcome of the Senate Finance Committee's vote on Tuesday, was the release of a report on the "Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage." The report, released just days before the crucial vote, is the result of a America's Health Insurance Plans (AHIP) contract with the reputable consulting firm PriceWaterhouseCoopers (PWC).

The commissioned study finds that the provisions of the Senate Finance bill will cause health insurance premiums to increase. There's just one problem: Even PWC admits that its study makes several unreasonable assumptions that ultimately undermine the credibility of their findings. Why make such flawed assumptions? Well, basically because AHIP paid them to. This is little more than a clever way for a lobbying firm (AHIP) to present its position through the guise of a well-respected consultancy (PWC). It's credibility laundering, or as Ezra Klein puts it: "The consultancy gets a paycheck, the outside group gets a press release, and everyone goes home happy."

If you need more confirmation that the PWC analysis is little more than an insurance lobbyist wolf in a sheepish consultant's clothing, you should take a look at what Jonathan Cohn and Harold Pollack have to say. Pollack's piece is especially critical of what reports like this do to undermine people's faith in the academic and scientific communities. An independent analysis (i.e., not blinded by huge piles of money) was conducted by MIT economist Jonathan Gruber, who finds that contrary to PWC's report, premiums can be expected to decrease for most people as shown here:

It's easy enough to understand that the health insurance industry is opposed to the health reform bill just passed by the Senate Finance Committee, but the real question is why? Again, Ezra Klein comes through with 4 key points explaining what insurers want:
  1. A stronger individual mandate
  2. Elimination of the excise tax on high-cost health care plans
  3. No Medicare payment cuts
  4. No New Taxes
Translation? Insurance companies want everyone to be covered, but they don't want to see their profit margins decrease in the process. Real translation? Insurers are all about the money, which brings me to the point of this post, which is how insurance companies are like strippers.

Strippers make gobs of money selling an illusion. They dance around, displaying their bodies to men in exchange for tips. But in order for them to make real money, they have to find a way to make the men believe that they are interested in them. You see, if a stripper pays special attention to a man, he's likely to give her more money. She knows this of course, and she likes the money. Meanwhile, he lies to himself and is convinced that she's not doing it for the money.

Insurers are no different. They, too, sell an illusion. They offer people a false sense of security by convincing them that they are adequately insured when in fact, a great many people are under-insured. The insurer makes its money, and when the beneficiary files a claim--like the balding, overweight man who thinks buying a drink for his stripper counts as a date--they quickly find out that the insurer's actually not at all into them. They just want your money, and they'll do just about whatever it takes--except actually covering your care--to get it.

We need to wake up and realize this opposition to reform for what it is: greed. Fortunately, there is hope that the insurance industry has just shown its true colors to the public through the PWC report. Many are now convinced that, thanks to the insurers' salvo, we're actually closer to the public option than we were before, as Democratic and public opposition to the status quo has the potential to be galvanized around the very transparent and highly self-interested motives of the insurance industry. I certainly hope so.
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