The big news in health care last week, at least for the cognoscenti, came from the Lewin Group. Lewin reported (PDF) that if, under certain assumptions, Congress enacted a public plan to compete with commercial insurers, premiums for policyholders would be about 30 percent cheaper than similar private coverage.
So far, the creation of a public plan is the major flashpoint in the health reform effort. It’s opposed by insurers who could, according to Lewin, lose 32 million policyholders if a public plan is enacted. The docs and the hospitals are not in love with a public plan either, but they haven’t been as publicly vociferous in their opposition. Lewin’s study predicted that their “net income would decline”—by 4.6 percent for the hospitals and 6.8 percent for the doctors if all individuals and employers could join the public plan. But, Lewin noted, if fewer people are eligible, hospital revenue might even increase and the doctors would lose less money.
A-ha, I thought, that’s the opening shot by the special interests, who have been very quiet of late. Here was a well-known consulting firm saying that a public plan could hurt their business. (Of course, proponents could seize on the cheaper premiums as a good thing, or economists like Princeton’s Uwe Reinhardt could parse Lewin’s assumptions as he did for The New York Times Economix blog.) But the headlines, for the most part, didn’t go there. Their tone signaled big trouble ahead for the nation’s health insurers if Congress proceeded with a public plan.
“Study Raises Questions About Public Health Plan,” said The Boston Globe, which published an AP story about the study. Same head, same story in the Kansas City Star, The Washington Post, and the Seattle Post-Intelligencer. Ditto the Washington Times, with a slight variation on the head: “Study sparks questions about public plan.” And at MSNBC.com, but with this head: “Public plan may doom private health insurance.” Investor’s Business Daily published its own story by David Hogberg, who knows which questions to ask. But its headline also conveyed the same message: “Public Plan Might Not Be The Best Cure For U.S. Health Care Woes, Critics Say.” U.S. News & World Report did its own piece, too: “Premiums for a Public Health Plan: 30 Percent Cheaper?” Did the magazine mean to imply that the price advantage for a public plan was somehow suspect?
Once past the headlines and into the AP’s lede, readers learned that, “A public health insurance option for middle-class families could help cover the uninsured but it may well put private insurers out of business.” Further down came this quote from Lewin vice president John Sheils: “The private insurance industry might just fizzle out altogether.” Dire predictions indeed from the Lewin Group, which the AP described as a “respected consulting firm” and a “numbers-crunching firm that serves government and private clients.” Reinhardt called Lewin “a respected policy research firm.” Such characterizations telegraphed credibility to the study.
But wait a minute. The Lewin Group may be respected, but it’s hardly without a dog in this fight. It’s part of Ingenix, which is owned by United Healthcare Group, the insurance behemoth that has been buying up insurance companies left and right, expanding its reach into just about every segment of the health-insurance market. Its flagship, UnitedHealthcare, helps make it the largest health insurer in the country. It’s a safe bet that United is not too keen on a public plan that might shrink its business. Sheils told the AP that the study was “meant to give lawmakers a feel for the options.” It was “more or less written as a how-to manual,” he said. It’s also a safe bet that members of Congress took note.