Posted by: Randy Allgaier | November 1, 2009

The number 79

Since the boisterous town hall meetings with wall to wall media coverage in August, it seemed like the public option was on life support. That lopsided coverage sent moderate Democrats scurrying although poll after poll has shown that a majority of Americans support a public option. With so many on Capitol Hill running from the public option as if it were Ebola, you would think that public support was in the in single digits.

But was the industry report prepared by Pricewaterhouse Coopers the prescription the public option needed to move out of intensive care?

The report states that under the Baucus plan premiums would raise 111% by 2019 as opposed to 79%

The White House and many respected economists are calling out the report for being flawed. Pricewaterhouse Coopers has acknowledged that they failed to take into account government subsidies that would be provided to help moderate-income Americans purchase insurance. A minor point if one has a casual relationship with the facts.

The insurance industry is positing that the bill doesn’t have stiff enough penalties for people who do not agree to being fleeced through obscene premiums. The industry is afraid they will not have enough new customers to feed their insatiable greed and would be forced to pass the cost of that greed to the rest of us.

While everyone is shouting about the validity of the report and whether or not the Baucus plan will increase premiums by 111% or not, there is something here being lost in the debate- the number 79.

The insurance industry admits that left to their own devices, they would increase their premiums by 79% over 10 years, or an average of 7.9% each year. Inflation rates have mostly hovered around 3.5% between 2000 and 2009. We haven’t seen inflation rates near 7.9% since the early ‘80s.

Raising premiums twice the rate of inflation is acceptable? This rare honesty puts their hubris on display and makes the case for a public option. The debate about the cost of the Baucus bill is important because we like truth based policy debates. The real story is the industry’s outrageous admission that, unchecked, they intend to escalate their assault on the American’s pocketbook to the tune of 79%. Only a 79% increase? How magnanimous! This hubris is just what the doctor ordered for the public option. Let’s hope Congress takes notice.

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