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Health Care Overhaul Opponents Use Selective Stats

It’s become one of the most commonly cited statistics by opponents of the health overhaul being put together by Democrats in Congress: Creating a new government-run public health insurance plan would result in 119 million people losing their private insurance.

Here was Senate Finance Committee ranking Republican Charles Grassley on MSNBC just Tuesday: “My objection to the public option is based upon the Lewin think tank … study that says 119 million people will opt out of private health insurance.”

“According to a recent study, a new public plan would cause almost 120 million Americans to lose their private coverage,” echoed Sen. Orrin Hatch.

But is it really true? Yes and no.

“The number of 119 million is absolutely correct,” says John Sheils, senior vice president of the Lewin Group, a number-crunching consulting group owned by Ingenix, which is a subsidiary of UnitedHealth Group.

But that number hardly represents the entirety of the report Sheils and colleague Randy Haught put out in April. The point of the study was to show that the number of people who would eventually join a government-sponsored public insurance plan would vary – dramatically – depending on how that plan is designed.

If the public plan is open to everyone and pays health care providers rates similar to those paid by the government-run Medicare program, which are lower than most private insurers pay, “you’d have a lower premium level and thus [more] people go into it,” says Sheils.

But if the public plan is limited to fewer people (perhaps only those in small businesses and individuals), or if the plan pays higher rates to doctors and hospitals, fewer people would join, both because fewer would be allowed and because the plan would be less financially attractive. According to the study, the number of people dropping private coverage could be as low as 10.4 million.

The study looked at six options, says Sheils. “And five of those options are less aggressively priced than the Medicare payment level option,” meaning they would attract fewer enrollees to switch from private insurance coverage.

Sheils stops short of saying that opponents of a public plan were misusing his statistics, because while “this is the extreme case, I don’t think it has been stricken from everyone’s agenda, as far as I can tell.”

But he did add that in general, the mood in Congress seems to be moving toward a more constrained sort of public insurance program; most likely one that would pay somewhat more than Medicare and limit enrollment.

For example, Sheils says, Democratic Sen. Charles Schumer of New York “has a plan which would require the public program to pay private payer rates – the same rates that other private insurers have to pay – and under that scenario we get only between 10 and 12 million people dropping private coverage.”