CNN's Roberts cites Lewin Group study for Heritage, ignores CBO on public plan enrollment

From the August 11 edition of CNN's Anderson Cooper 360:

ROBERTS: The final thing that we want to get into is whether or not people will be able to keep their own insurance, because the critics of these plans say people will be forced into this public health care plan. And a study done for the Heritage Foundation by the Lewin Group says 88 million people -- at least 88 million people -- will be forced into the public plan.

CBO "estimate[s] ... the number of enrollees in the public plan would be substantially smaller than the Lewin Group's"

Lewin Group VP testified that "[i]f the plan is opened to individuals and all employers, the number of people in the public plan would rise to 122.9 million people." In his testimony to the Energy and Commerce Committee, Lewin Group vice president John Sheils stated: "The public plan under the House bill would result in a substantial decline in the number of people with private insurance coverage, even in the early years of the program. ... If the plan is opened to individuals and all employers, the number of people in the public plan would rise to 122.9 million people. Private coverage would decline by about 113.5 million people." [John Sheils testimony to the House Energy and Commerce Committee; 6/25/09]

Lewin Group study predicted that "88.1 million workers would shift from private employer insurance to the public plan" under the House bill. In its report for the Heritage Foundation, the Lewin Group stated: "It the Act were fully implemented in that year [2011], about 88.1 million workers would shift from private employer insurance to the public plan." [Lewin Group report; 7/17/09]

CBO estimates roughly 2 million "workers and their dependents" would be enrolled in exchanges by employers and would choose public plan.* In a July 26 analysis, CBO found:

A related question concerns how many firms would provide coverage to their workers but would do so by letting their workers purchase coverage in the insurance exchanges -- and, in particular, how many of those enrollees would end up in the new public plan.

[...]

For the preliminary estimate of the proposal, CBO and the JCT [Joint Committee on Taxation] staff assumed that only firms with 50 or fewer employees would be permitted to buy coverage through the exchanges, and we estimated that about 6 million workers and their dependents would obtain coverage in that way. We also estimated that about one third of those enrollees would choose the public plan -- an assessment that is consistent with our overall estimate of the share of people in the exchanges choosing that plan.

CBO estimates "about nine million people" who would have had employment-based plan would not under the legislation; up to 3 million might choose public plan. In its July 26 analysis, CBO wrote: "All told, we estimate that, in 2016, about 9 million people who would otherwise have had employer coverage would not be enrolled in an employment-based plan under the proposal." If all of those people were enrolled in the exchanges, under CBO's "overall estimate," about one third would choose the public plan, or 3 million people.

CBO "estimate[s] ... the number of enrollees in the public plan would be substantially smaller than the Lewin Group's." In its July 26 analysis, CBO referred to Sheils' June 25 testimony, stating that "[a]nalysts at the Lewin Group recently estimated that if all employers were given access to the insurance exchanges, more than 100 million people would end up enrolling in the public plan." CBO continued: "For several reasons, we anticipate that our estimate of the number of enrollees in the public plan would be substantially smaller than the Lewin Group's, even if we assumed that all employers would have that option."

From the CBO's July 26 analysis [footnotes omitted]:

If we assumed that workers at larger firms would be allowed to purchase coverage through the exchanges, our estimate of the number of enrollees involved [in the exchanges] would undoubtedly be greater than 6 million, but we have not estimated the magnitude. Analysts at the Lewin Group recently estimated that if all employers were given access to the insurance exchanges, more than 100 million people would end up enrolling in the public plan. For several reasons, we anticipate that our estimate of the number of enrollees in the public plan would be substantially smaller than the Lewin Group's, even if we assumed that all employers would have that option.

One consideration that would affect our analysis is that large employers would generally have lower administrative costs for health insurance than would plans offered in the exchanges, because (under the proposal) those plans would need to sign up enrollees individually; as a result, employees of large firms would be less likely than those of small firms to find the option of purchasing coverage through the exchange attractive, holding other factors equal. Although we assumed that the public plan would have somewhat lower administrative cost per enrollee than would private plans in the exchanges, the public plan would probably have to incur much of the same cost in order to attract and retain members.

More generally, the Lewin analysis uses a much larger gap than does our analysis between the premium of the public plan and the premiums of the private plans against which it would be competing. As indicated in our letter of July 14, we estimate that the public plan's premium would, on average, be about 10 percent lower than that of a typical private plan offered in the insurance exchanges. That estimate is based in part on available data from the Medicare Advantage program about the difference in costs incurred by private plans and the traditional Medicare plan to provide the same set of benefits. Indeed, the most recent analysis of that difference concluded that the costs of the traditional Medicare plan were only 2 percent lower, on average, than the costs of private plans participating in Medicare to provide the same benefits (though that difference varied geographically and by the type of private plan that was offered).

Roberts did not disclose Lewin Group's ties to UnitedHealth

In previous "reality check," CNN "point[ed] out" Lewin Group "is now owned by UnitedHealthcare." On June 25, CNN congressional correspondent Dana Bash stated, "[W]e should point out that the Lewin Group, which conducted this study, is now owned by UnitedHealthcare, which is a private insurance company. But Sheils insists he has total editorial control and autonomy over his health care studies." [CNN's American Morning; 6/25/09]

PolitiFact noted Lewin Group is "a subsidiary of UnitedHealth Group, which also offers private health insurance." In its fact check of a distortion of the Lewin Group's data by Karl Rove, PolitiFact.com wrote, "We'll note here that the Lewin Group is respected by many health care analysts and operates with editorial independence, but it is a subsidiary of UnitedHealth Group, which also offers private health insurance." [PolitiFact.com; 6/12/09]

Transcript

From the August 11 edition of CNN's Anderson Cooper 360:

ROBERTS: The final thing that we want to get into is whether or not people will be able to keep their own insurance, because the critics of these plans say people will be forced into this public health care plan. And a study done for the Heritage Foundation by the Lewin Group says 88 million people -- at least 88 million people -- will be forced into the public plan.

Let's listen to this exchange from President Obama's town hall in Portsmouth today.

[begin video clip]

UNIDENTIFIED MALE: I still worry that if we go to a public option, period, that the private companies, the insurance companies, rather than competing -- because who can compete with the government? The answer is nobody.

So, my question is: Do you still, as a -- yourself now, support a universal plan, or are you open to the private industry still being maintained?

OBAMA: The only thing that I have said is that having a public option in that menu would provide competition for insurance companies to keep them honest.

[end video clip]

ROBERTS: So, it would seem clear, Sanjay, that at least some people are going to go into a public plan. The big question is: How much would that take away from the private plans? How much would it undercut it? And what number of people would eventually end up in the public plan?

DR. SANJAY GUPTA (CNN chief medical correspondent): Right. That's right. And that study you quoted, John, has numbers sort of varying, from, you know, tens of millions to over 100 million, possibly going toward the public option. A lot of supporters of the public option say, look, we got the U.S. post office, and, yet, we have FedEx and UPS. So, you can have public and private competition all existing at once.

There's also this idea that not everyone is going to be eligible for the public option. Just because it's cheaper doesn't mean everyone is going to qualify for it.

Having said that, there is this idea still that the public option could start to grow larger and larger. It could become more all-inclusive, all of that on the backs of taxpayer dollars, and that might eventually crowd out private insurance. And that's -- that -- those are the sort of argument and counterargument right there.

ROBERTS: Dr. Sanjay Gupta helping to straighten it all out for us, tonight. Doc, we sure appreciate it. Thanks for joining us.

GUPTA: All right, John. Thanks.

*CORRECTION: This item originally stated that CBO predicted that "only approximately 2 million people would switch from employer coverage to the public plan." Media Matters for America regrets the error.