NY Times - "M.I.T. Economist Rebuts Insurance Industry Report"

Here is a nice story about an analysis by the economist who helped develop Massachusett's health care program:

http://prescriptions.blogs.nytimes.com/2009/10/13/mit-economist-finds-flaws-in-insurance-industry-report/

###

After an insurance industry report said that premiums would rise sharply with the passage of comprehensive health care legislation, Jon Gruber, a health care economist at the Massachusetts Institute of Technology, said he evaluated the report Monday at the request of Senate Democrats and found it deeply flawed.

The industry report, prepared by PricewaterhouseCoopers, was released Sunday evening by America’s Health Insurance Plans, the major industry trade group, and has sparked a furor, drawing angry responses from the White House, Congressional Democrats and other supporters of the legislation.

Mr. Gruber, who helped Massachusetts with its effort to provide universal health insurance coverage, said that the industry report failed to take into account administrative overhead costs that he said will “fall enormously” once insurance polices are sold through new government-regulated marketplaces, or exchanges.

And Mr. Gruber said that the PricewaterhouseCoopers report failed to take into account government subsidies that would be provided to help moderate-income Americans purchase insurance. PricewaterhouseCoopers acknowledged in its report that it did not factor in the effect of those subsidies.

As a result, Mr. Gruber reached the opposite conclusion of the insurance industry.

###

Who would have guessed?:wow: