Insurers Mount Attack Against Health Reform

Published on
by
Associated Press

Insurers Mount Attack Against Health Reform

by
Ricardo Alonso-Zaldivar

WASHINGTON — The health insurance industry is warning that a
comprehensive Senate bill would increase the cost of a typical policy
by hundreds, or even thousands, of dollars a year after lawmakers eased
up on the requirement that all Americans get coverage.

The
stinging attack came on the eve of a pivotal Senate vote and was a
clear message to President Barack Obama and congressional Democratic
leaders who have been making headway on overhauling the nation's health
care system. The industry fears that a weakening of the penalties for
failing to get insurance would let Americans postpone getting coverage
until they get sick.

The industry has worked for months behind
the scenes to help shape health care reform. Unlike the 1990s, when it
contributed to the failure of President Bill Clinton's health overhaul,
the insurance industry has been attracted by the promise of millions of
more people getting coverage. Translation: millions of new consumers
buying policies.

The industry wants lawmakers to expand coverage,
not lessen the penalties that would reduce the number of people. The
Senate Finance Committee is slated to vote on its 10-year, $829 billion
bill on Tuesday, but more important to the industry are the steps
beyond the panel's decision.

Senate Majority Leader Harry Reid,
D-Nev., will be merging the bill with a companion measure from the
Senate Health, Education, Labor and Pensions Committee, with the goal
of a sweeping, affordable bill. In the House, Speaker Nancy Pelosi,
D-Calif., and Democratic leaders have been pulling together legislation
from three committees.

Angered by the insurance industry's
late-in-coming cost estimate, a spokesman for Senate Finance Committee
Chairman Max Baucus, D-Mont, questioned the credibility of the numbers.

"It's a health insurance company hatchet job, plain and simple," said the spokesman, Scott Mulhauser.

Late
Sunday, the industry trade group America's Health Insurance Plans sent
its member companies a new accounting firm study that projects the
legislation would add $1,700 a year to the cost of family coverage in
2013, when most of the major provisions in the bill would be in effect.

Premiums
for a single person would go up by $600 more than would be the case
without the legislation, the PricewaterhouseCoopers analysis concluded
in the study commissioned by the insurance group.

"Several major
provisions in the current legislative proposal will cause health care
costs to increase far faster and higher than they would under the
current system," Karen Ignagni, the top industry lobbyist in
Washington, wrote in a memo to insurance company CEOs.

The study projected that in 2019, family premiums could be $4,000 higher and individual premiums could be $1,500 higher.

Baucus
spokesman Mulhauser said the study is "seriously flawed" because it
doesn't take into account provisions in the legislation that would
lower the cost of coverage, such as tax credits to help people buy
private insurance, protections for current policies and administrative
savings from a revamped marketplace.

White House health care
spokeswoman Linda Douglass concurred. "This is an insurance industry
analysis that is designed to reach a conclusion which benefits the
industry, and does not represent what the bill does," she said.

The
Baucus plan faces a final committee vote on Tuesday. It got a boost
last week when the Congressional Budget Office estimated it would cover
94 percent of eligible Americans while reducing the federal deficit.

But the PricewaterhouseCoopers analysis attempted to get at a different issue — costs for privately insured individuals.

It concluded that a combination of factors in the bill — and decisions by lawmakers as they amended it — would raise costs.

The
chief reason, said the report, is a decision by lawmakers to weaken
proposed penalties for failing to get health insurance. The bill would
require insurers to take all applicants, doing away with denials for
pre-existing health problems. In return, all Americans would be
required to carry coverage, either through an employer or a government
program, or by buying it themselves.

But the CBO estimated that
even with new federal subsidies, some 17 million Americans would still
be unable to afford health insurance. Faced with that affordability
problem, senators opted to ease the fines for going without coverage
from the levels Baucus originally proposed. The industry says that will
only let people postpone getting coverage until they get sick.

Other
factors leading to higher costs include a new tax on high-cost health
insurance plans, cuts in Medicare payments to hospitals and doctors,
and a series of new taxes on insurers and other health care industries,
the report said.

"Health reform could have a significant impact on the cost of private health insurance coverage," it concluded.

Insurers
played a major role in defeating then-President Bill Clinton's health
care plan in the 1990s. Sunday, the industry stopped short of signaling
all-out opposition. "We will continue to work with policymakers in
support of workable bipartisan reform," Ignagni said in her memo.

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