Auto insurance Guides: How Insurance Companies Are Like Strippers

The big news this week, other than the outcome of the Senate Finance Committee's vote on Tuesday, was the release of a report on the "Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage." The report, released just days before the crucial vote, is the result of a America's Health Insurance Plans (AHIP) contract with the reputable consulting firm PriceWaterhouseCoopers (PWC).

The commissioned study finds that the provisions of the Senate Finance bill will cause health insurance premiums to increase. There's just one problem: Even PWC admits that its study makes several unreasonable assumptions that ultimately undermine the credibility of their findings. Why make such flawed assumptions? Well, basically because AHIP paid them to. This is little more than a clever way for a lobbying firm (AHIP) to present its position through the guise of a well-respected consultancy (PWC). It's credibility laundering, or as Ezra Klein puts it: "The consultancy gets a paycheck, the outside group gets a press release, and everyone goes home happy."

If you need more confirmation that the PWC analysis is little more than an insurance lobbyist wolf in a sheepish consultant's clothing, you should take a look at what Jonathan Cohn and Harold Pollack have to say. Pollack's piece is especially critical of what reports like this do to undermine people's faith in the academic and scientific communities. An independent analysis (i.e., not blinded by huge piles of money) was conducted by MIT economist Jonathan Gruber, who finds that contrary to PWC's report, premiums can be expected to decrease for most people as shown here: