This ad is a bit like those sweepstakes promotions that say “you may already be a winner.” Maybe, but not yet.
The US Chamber of Commerce ad praises Democratic Rep. Melissa Bean of Illinois for supporting a small-business health plan that it says allows health-insurance pools that may save small businesses more than 30 percent. It flashes the words “increased buying power” and “lower prices for coverage” on screen.
Actually, no such plan exists. In fact, legislation that would create it is stalled in the Senate, where it has always died in years past.
The ad also exaggerates the likely savings from such a plan if it is ever enacted. The Congressional Budget Office estimates that the average savings would be two to three percent, not 30 percent.
The $400,000 ad buy started airing in Illinois Aug. 3 in support of Bean, a former corporate sales executive elected with Chamber of Commerce help in 2004.
Chamber of Commerce Ad:
Announcer: Small businesses are the backbone of the American economy. One of the biggest challenges they face is sky-rocketing health care costs.
Congresswoman Melissa Bean understands. That’s why she broke party lines to do the right thing by voting for small-business health plans.
On Screen: “Increased Buying Power”
Announcer: This allows small businesses to pool together to purchase their health care coverage.
On Screen: “Lower Prices for Coverage”
Announcer: And that may save them upwards of 30 percent.
On Screen: “Working for Small Businesses”
Announcer: Good things can happen for small businesses, thanks to Congresswoman Melissa Bean.
A Phantom Plan
The ad seems at times like a commercial for a new health-insurance program. The words “increased buying power” and “lower prices for coverage” appear on screen over images of small-business workers, while the announcer commends Rep. Bean for breaking with her party to support small-business health plans.
It’s true that Bean broke with her party; she was only one of 36 Democrats to support the “Small Business Health and Fairness Act of 2005,” a Republican measure that passed the House last year by a vote of 263 to 165.
But the ad fails to mention that similar measures have passed the House six times previously, only to die in the Senate, and that prospects look only a little better this time around. The Senate failed to advance its version of the legislation when a vote May 11 fell five short of the 60 required to break a Democratic filibuster. Opponents, mostly Democrats, object to the legislation’s pre-emption of state insurance regulations requiring that all plans cover expenses such as pregnancy and childbirth, well-child services, reconstructive surgery following mastectomies and screening for cervical cancer. The essence of the “small business health plans” is that they would be allowed to offer bare-bones plans without state-mandated coverage items.
The ad says that the plan “allows small businesses to pool together,” as though the plan existed. It would have been technically accurate to say it “would allow” pooling, if it becomes law.
The Chamber ad also exaggerates the likely benefits of this proposal for small businesses. It says the plan “may save them upwards of 30 percent.” But the nonpartisan Congressional Budget Office issued an estimate May 3 saying of the Senate version: “Under the bill, premiums in the small-group market are expected to average about 2 percent to 3 percent lower than otherwise.” The CBO says savings will vary widely, so its possible that somebody could save more than 30 per cent, but overall the CBO figures businesses will save less than one-tenth of what the Chamber ad suggests.
The Chamber defended its 30 per cent estimate, saying an earlier CBO study from January 2000 had estimated premium reductions at 13 per cent for a version of the bill then being considered by the House, and that the Chamber’s own experts expected additional savings that the CBO did not take into account. Chamber spokesman Bill Miller also said the current Senate version of the bill lacks some cost-saving features of the bill that Rep. Bean voted for in the House.
Correction Aug. 14: Originally we reported that this ad had actually misled at least two Illinois business owners, clients of Lake Bluff insurance agent Tom Terrill, who said the business owners had called to obtain coverage described in the ad. Later Terrill contacted us to say that he was no longer sure that the clients had seen the ad. Though Terrill himself still considers the ad to be misleading, we can’t say that the business owners were in fact misled by the ad, and we removed references to them.
Watch Chamber of Commerce Ad: “Good Things”
Cost Estimate, S. 1955, Congressional Budget Office, 3 May 2006.
“Increasing Small-firm Health Insurance Coverage Through Association Health Plans and Healthmarts,” Congressional Budget Office, Jan. 2000.