Here’s a link to the PWC report, Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage.

The study estimates health insurance premium increases over the next 10 years that would result from the Senate Finance Committee bill due to:

o Insurance market underwriting and pricing restrictions coupled with a weak coverage mandate,
o New taxes on high-cost health care plans,
o Cost-shifting in response to cuts in Medicare, and
o New taxes on health insurers, drug companies, medical device companies, and clinical labs.

The study was sponsored by America’s Health Insurance Plans, the leading health insurance company trade group.

The four features “scored” by PWC by themselves would make health insurance significantly more expensive over time. On the other hand, the Congressional Budget Office (CBO) estimates that administrative costs for policies sold through proposed insurance exchanges would be lower than under current law, which by itself would tend to reduce premiums.  (Also see the CBO update.) In addition, effective premium rates would decline significantly for persons eligible for subsidies. 

But the CBO estimates do not reflect possible adverse selection from restrictions on insurance company underwriting and pricing combined with a weak mandate.  With a weak mandate, many young and/or healthy people will choose not to insure, thus driving up the average premium for people who do buy.  It’s not clear whether the CBO estimates allow for any additional cost-shifting to insurers as a result of proposed cuts in Medicare reimbursement.

See The PricewaterhouseCoopers Premium Problem for a brief critique of the PWC analysis (and a link to MIT economist Jonathan Gruber’s analysis, which emphasizes premium subsidies).