Coming Attractions: Insurance Industry Funded Study is Wrong on the Facts... Again...

Later today, the insurance industry releases their latest in a string of flawed analyses designed to confuse the debate around health reform. After the now-infamous AHIP report, these studies have become more than a little predictable. Today, to make it more interesting, we will beat the insurers to the  punch and give you our response before the insurers release the report. (We saw an early copy.)

While the new study contains many of the same arguments that were de-bunked in previous sham reports, this one contains a new twist: it attacks the independent Congressional Budget Office and the conclusions of health experts across the political spectrum.  

The CBO recently found that health insurance reform legislation will lower premiums for American families by encouraging lower administrative costs, increased competition, and better pooling for risk. But the new industry-funded report explicitly disregards these conclusions because, simply put, they’re not what the insurance companies want to hear.

In addition to ignoring Congress's independent budget experts, the new report reaches its conclusions by cherry-picking which policies to analyze – a tactic we've seen the industry use repeatedly. Most egregiously, its alarmist headline conclusions leave out the impact that new tax credits will have on the cost of health insurance for families. That makes no sense.  In reality, the report itself acknowledges that: “[s]ubsidies will entirely or partially offset these premium increases for some individuals.” In fact, the tax credits will lower premiums for individuals purchasing insurance on the exchange by up to 60 percent.

The report also ignores the legislation's provisions that protect those who don’t wish to change the coverage they have. As the CBO explained, "if they wanted to, current policyholders in the nongroup market would be allowed to keep their policy with no changes, and the premiums for those policies would probably not differ substantially from current-law levels."

Finally, the report doesn't acknowledge all of the bill's measures to control costs and improve coverage. For instance, it does not fully capture the effects of the excise tax on high-cost plans, which will slow the growth in health costs over the long-term. A group of prominent economists – including two Nobel laureates and previous members of both Democratic and Republican administrations – recently concluded that this provision is: "the most promising approach to reducing private-sector health care costs while also giving a much needed raise to the tens of millions of Americans who receive insurance through their employers."

We’re closer than ever before to passing meaningful health insurance reform. And you can bet as we continue to make progress, the insurance industry will continue to try and distract and misinform because they know their very profitable status quo is in grave danger.

Dan Pfeiffer is White House Communications Director

What I Heard Last Night

Last night, I accompanied the President to West Point as he spoke to the American people about his decision on the way forward in Afghanistan and Pakistan.  This was an important moment for America, delivered in a stirring yet sober setting.  Over four thousand people filled Eisenhower Hall -- proud and patriotic cadets and their families, West Point leadership, and members of the local community.  Also in the audience were Secretary Clinton, Secretary Gates, Secretary Shinseki, General Petraeus (a graduate of West Point, along with General McChrystal), Admiral Mullen, members of Congress, and General Doug Lute and John Tien (also West Point graduates and members of my National Security Staff).

President Obama announced that he is ordering an additional 30,000 troops into Afghanistan.  He highlighted that a large portion of these troops will be trainers, critically important as we have to start partnering Afghan security forces with our security forces in the field so that they are actually getting experience in securing these areas, and are then prepared to take a handoff as U.S. troops draw down.  In the summer of 2011, we will begin a transition from this extended surge and start to transfer security responsibility to Afghan Security Forces.  The slope, pace, and end point of this drawdown will be based on conditions on the ground.  We will begin to make those assessments in December of 2010 after these additional troops have been in country for a year and we will be able to measure the progress that has been made with this strategy.

The President made it clear that he did not make this decision lightly.  He made it because our own national security is at stake in Afghanistan and Pakistan: it is from this region that our country was attacked on 9/11, and it is where new attacks are being plotted.  This is the reason American troops and those of our international allies are risking their lives.  This resonates with Americans from all backgrounds.  And having served in Afghanistan and Iraq during my forty years in the Marine Corps, I know this was the right decision.  Our entire national security team is committed to the success of this strategy and we will hold ourselves and our partners accountable as we move forward to implement the President’s vision.

The President emphasized that the core goal of our mission in Afghanistan is unchanged from the strategy decision he made in March of this year: to disrupt, dismantle, and defeat al Qaeda.  We must keep the pressure on al Qaeda, and to do that, we must increase the stability and capacity of our partners in the region.  And in this process, the President is going to hold the government of Afghanistan accountable for its performance, as he declared that the days of providing a blank check are over.  We are committed to good governance in Afghanistan, all the more important now that their President begins his second term in office.  The President speaks directly with President Karzai often, and has outlined to him the steps that we expect the Afghan government to take in improving governance and delivering services to its people.
                                                                    
We cannot separate our strategy in Afghanistan from our strategy in Pakistan.  We will continue to use all aspects of our diplomatic and development tools to work with the Pakistanis to keep up the pressure on the extremists that are within their borders and the safe havens that exist there.

As the President said last night, we must come together to end this war successfully.  What is at stake is the security of our homeland, our allies, and the common security of the world.

General Jim Jones, USMC (Ret) is National Security Advisor

Reality Check: Senate Health Care Debate Viewing Guide

As the Senate debate gets into full swing this week, we thought we'd address a half dozen of the myths you will most certainly hear from critics of health insurance reform. If it feels like you have heard these arguments before, it is because you have... you have heard them over and over and over again. You heard them during the mark ups in the House and the Senate, you heard them at townhalls this summer, and you heard them on the House floor. However, repetition does not equal veracity. These claims have been proven false by independent fact checkers time and again. Consider the below information, a viewing guide of sorts for the Senate floor debate.

1.       CLAIM: Health insurance reform will cut seniors' guaranteed Medicare benefits.

REALITY: Health insurance reform will not cut guaranteed Medicare benefits.  Period.  Perhaps unlike many of these same critics who have repeatedly proposed privatizing Medicare or slashing benefits, President Obama believes Medicare is a sacred trust with America's seniors.  Reform protects and strengthens Medicare, adding 5 years to the Medicare trust fund by cracking down on waste, fraud and abuse. It doesn’t use a dime of the Medicare trust fund to pay for reform and does not cut guaranteed Medicare benefits.

Specifically, reform will end wasteful overpayments to insurance companies through Medicare Advantage, and there is no evidence these overpayments improve the quality of care for seniors, yet they contribute to higher premiums for all Medicare beneficiaries.

Here's what the defenders of the status quo won't tell you: the Senate bill will provide a 50% discount to initially reduce the cost of prescription drugs for seniors who fall into the gap in coverage known as the Donut Hole.  It will make preventive services free. It will also improve quality of care for seniors in too many ways to list here – all of this we imagine will be very good news for these critics who are so concerned about our seniors.

2.       CLAIM: Health insurance reform will open the door to spending government funds on abortion.

REALITY:  This legislation is about health insurance reform---protecting Americans from unfair insurance industry practices, providing affordable options and lowering costs.  This is not about changing the status quo on abortion policy.   Health insurance reform legislation should respect existing conscience statutes and follow existing policy that  prohibits the use of federal funds to pay for abortions except in cases of rape, incest and when the life of the woman is at stake.  At the same time it is important that the legislation not erode the insurance choices women have today.  So to be clear: The President believes federal funds should not be used to pay for abortions.  And health insurance reform should not erode the insurance choices women have today. 

3.       CLAIM:  Health insurance reform will make coverage available to undocumented immigrants.

REALITY:  We have procedures in place to ensure that undocumented immigrants don't participate in the exchange – they're ineligible, and we will use well-tested verification systems that states have been using successfully for decades to screen out people who are not authorized to receive public benefits.

Nothing in the bill authorizes employers to hire and provide insurance to undocumented immigrants; this is already against the law and that won't change.  The President has also said he is committed to enacting comprehensive immigration reform, something that should not be tackled piecemeal in the health insurance reform legislation.   

4.        CLAIM:  Health insurance reform will create new financial burdens for small businesses.

REALITY: Health insurance reform will actually lower costs for small businesses. Small businesses will have access to the insurance exchange, where small businesses and their employees can pool together with millions of other Americans to increase purchasing power and benefit from increased competition. 

A report from the Business Roundtable concluded that the cost-savings measures in the health reform bills could lower health care spending per employee by $3000.   From the beginning, we made clear that most small businesses would be exempt from the employer responsibility requirement, because we do not want to increase the burden on small business.   But at the same time, most small business owners want to provide coverage, which is why millions of small businesses would receive a tax credit to make coverage for their employees even more affordable.   Today, small businesses pay 18% more for health insurance than large companies do -- with reform, small businesses and their employees will be able to purchase insurance through the insurance exchange, where pooling and competition will lower prices.  Today, small businesses can see their premiums skyrocket if just one or two workers fall ill and accumulate high medical costs -- reform will prevent insurance discrimination based on health status, meaning that small businesses will no longer be unfairly penalized if a worker falls ill.  To be clear, those critics who claim to be standing up for small business are actually just fighting tooth and nail against all of this – hopefully this good news will turn them around.

5.        CLAIM:  Health insurance reform will cost jobs.

REALITY: Few claims more fundamentally misunderstand both health care and the economy more than this one. Right now the skyrocketing health care costs represent one of the biggest disadvantages our economy faces, and lowering the cost of healthcare will help jumpstart job growth. The President’s Council of Economic Advisers (CEA) estimated that if the annual growth rate of health spending slows by 1.5 percentage points per year, then the unemployment rate could fall by 0.24 percentage point and jobs could rise by 500,000. A newly released Congressional Budget Office report finds that premiums will fall by as much as 3 percent in the large group market and 2 percent in the small group market after reform, showing that employers will reap the cost savings necessary to hire more workers and invest in new property, plant, and equipment. And of course, as discussed in #4, reform will lower costs for small businesses through tax credits and pooled purchasing on a competitive exchange – reducing their competitive disadvantage vis-à-vis larger firms, thus helping to fuel a key engine of job creation in the economy. As icing, of course there will also be plenty of new jobs for doctors, nurses, medical technicians who are updating our health IT, medical researchers, on and on...

6.        CLAIM:  Health insurance reform will not lower costs.

REALITY:  The CBO just recently had more great news for these critics, finding that lower administrative costs, increased competition, and better pooling for risk will mean lower premiums for American families.  We had been trying to tell this good news to these critics for some time, but hopefully the CBO will break through where we couldn’t. Among the CBO’s findings:

• Americans buying comparable health plans to what they have today in the individual market would see premiums fall by 14 to 20 percent.
• Those who get coverage through their employer today will likely see a decrease in premiums as well.
• And Americans who currently struggle to find coverage today would see lower premiums because more people will be covered.

Making Home Affordable Campaign to Help America’s Homeowners

Many families across the country are struggling to make ends meet.  For homeowners who are struggling with their mortgage, or have fallen behind, the threat of foreclosure can be devastating. Foreclosure threatens a family’s stability, and the stability of our neighborhoods.

The Making Home Affordable Program was designed to help eligible homeowners modify or refinance their mortgage payments to make them more affordable. It gives eligible homeowners an opportunity to get back on track and rebuild their financial future. It is an important part of the Obama Administration’s broader plan to strengthen the housing market and the economy.

More than 650,000 homeowners have already received a mortgage modification under the program, reducing their monthly payments by an average of $640. The program is gaining momentum, but we know that many more homeowners are eligible for help.

Too many of the homeowners we meet at Making Home Affordable events go into foreclosure without ever talking to their mortgage servicer or seeking the help of a housing counselor. They may feel ashamed or afraid to reach out, or are unsure about where to go for help.

Others homeowners are frustrated by the process of trying to work with their mortgage servicer. They may speak to a different customer service representative each time, or are required to submit the same paperwork over and over again.

President Obama said when he launched the program in February that this plan will require both homeowners and lenders to step up and do their part, to take on some responsibility. This week, the U.S. Department of the Treasury and the Department of Housing and Urban Development announced a new campaign that marks unprecedented engagement to hold mortgage servicers accountable for timely decisions and reach out to eligible borrowers to make sure that they understand their responsibilities to get in – and stay in – the program.

One-third of the homeowners currently in trial mortgage modifications under the program are eligible to receive a permanent modification by the end of this month.  These homeowners deserve a timely decision from their mortgage servicer.  Treasury received plans last week from the country’s biggest servicers that explain how they propose to convert each one of these trial mortgage modifications. 

The majority of homeowners in trial plans still owe their servicer paperwork.  Thirty-seven percent of homeowners have submitted paperwork that is incomplete.  More than twenty percent of homeowners have submitted no paperwork at all.  As part of this campaign, Treasury and HUD will be engaging the 2700 HUD-approved housing counseling organizations to reach out to these borrowers.

Homeowners should not be afraid or ashamed to ask for help.  They do not have to go through this alone.  Homeowners can visit www.MakingHomeAffordable.gov or call the Homeowner’s HOPE™ Hotline at 1-888-995-HOPE (4673) to get free help from a HUD-approved housing counselor who will help them complete their paperwork and work productively with their mortgage servicer.  Even if the Making Home Affordable Program turns out not to be the right solution for a particular family, a HUD-approved  housing counselor will work with homeowners to get them the help they need.  For the homeowners we talk to around the country, this gives them hope.

Phyllis Caldwell is Chief of the Homeownership Preservation Office at the U.S. Department of the Treasury