White House Office Of Health Reform Director "Blindsided" By AHIP Study
(AP) WASHINGTON — Insurance companies aren't playing nice any more. Their dire message that health care legislation will drive up premiums for people who already have coverage comes as a warning shot at a crucial point in the debate, and threatens President Barack Obama's top domestic priority.
Democrats and their allies scrambled on Monday to knock down a new industry-funded study forecasting that Senate legislation, over time, will add thousands of dollars to the cost of a typical policy. "Distorted and flawed," said White House spokeswoman Linda Douglass. "Fundamentally dishonest," said AARP's senior policy strategist, John Rother. "A hatchet job," said a spokesman for Senate Finance Committee chairman Max Baucus, D-Mont.
White House Office of Health Reform director Nancy Ann DeParle told NBC's Chuck Todd that she felt "blindsided" by the health insurance industry's study.
"I'd spent a couple of hours with insurance industry folks last week, and yes I did feel blindsided," DeParle said. "I did feel we were working constructively."
But the health insurance industry's top lobbyist in Washington stood her ground. In a call with reporters, Karen Ignagni, president of America's Health Insurance Plans, pointedly refused to rule out attack ads on TV featuring the study, though she said she believed the industry's concerns could be amicably addressed.
At the heart of the industry's complaint is a decision by lawmakers to weaken the requirement that millions more Americans get coverage. Since the legislation would ban insurance companies from denying coverage on account of poor health, many people will wait to sign up until they get sick, the industry says. And that will drive up costs for everybody else.
Insurers are now raising possibilities such as higher premiums for people who postpone getting coverage, or waiting periods for those who ignore a proposed government requirement to get insurance and later have a change of heart.
The drama threatened to overshadow Tuesday's scheduled vote by the Senate Finance Committee on a 10-year, $829-billion plan that Baucus has touted as the sensible solution to America's problems of high medical costs and too many uninsured.
The Baucus bill is still expected to win Finance Committee approval. The insurance industry is trying to influence what happens beyond the vote, when legislation goes to the floor of the House and Senate, and, if passed, to a conference committee that would reconcile differences in the bills.
It's at that final stage where many expect the real deal will be cut.
"We've got ourselves a real health care shooting war now," said Robert Laszewski, a former health insurance executive turned consultant. "The industry has come to the conclusion that the way things are going in Congress, we'll have a ... formula that will be disastrous for their business, so they can't stand on the sidelines any longer."
Questions about the technical soundness of the industry analysis by the PricewaterhouseCoopers firm was a big part of the discussion Monday. The release of the study late Sunday on the eve of the federal Columbus Day holiday had Democrats crying foul.
"The misleading and harmful claims made by the profit-driven insurance companies are politicking for corporate gain at its worst," said Sen. Jay Rockefeller, D-W.Va.
Democrats have reason to worry. Insurance industry opposition helped sink President Bill Clinton's health care plan in the 1990s by fanning fears that people with coverage would wind up paying more.
Ignagni was unequivocal in her support for the PricewaterhouseCoopers conclusions. The company is "a world-class firm" with "a stellar reputation," she said.
The study projects that the legislation would add $1,700 a year to the cost of family coverage in 2013, when most of the major provisions of the Baucus bill would be in effect.
Premiums for a single person would go up by $600 more than would be the case without the legislation, it estimated.
In 10 years' time, premiums would be $4,000 higher for a family plan, and $1,500 more for individual coverage.
Finance Committee aides to Baucus said it's impossible to predict premiums down to the dollar because there are too many variables involved.
The technical issues behind the study are complex, and it will take time for neutral experts to deliver a final judgment. The issue boils down to questions of coverage and cost shifting.
The industry is arguing that the consequences of the bill will be shifted onto those who are already covered. Insurers are not alone. Representatives of the hospital industry have raised similar concerns, though in less stark terms.
The study finds fault with what Baucus sees as one of the crowning achievements of his bill. Even with a tight budget, it would cover an estimated 94 percent of eligible Americans, up from about 83 percent now. The study – and the insurance industry – say that's not enough, particularly since senators have weakened the stiff fines Baucus originally proposed for ignoring a requirement to get coverage.
"You really have to have a coverage level in the high 90s to make this work," Ignagni said.
The PricewaterhouseCoopers study also assumes that proposed taxes on high-cost insurance, new levies on insurers and other health industry firms, and Medicare cuts will be directly passed on to privately insured policyholders.
Critics of the study said it tilted those assumptions too far toward a worst case, ignoring the bill's potential to curb costs.
For example, the tax on high-cost health insurance that Baucus is proposing could lead employers and individuals to switch to lower-cost plans and avoid the levy. If that happens, there would be no additional costs to pass on to consumers.
The study "assumed the tax would have no behavioral effect, contrary to every other tax in the history of civilization," said economist Len Nichols of the nonpartisan New America Foundation.
Critics also said the study doesn't take into account proposed insurance exchanges, a new marketplace that would be designed to foster competition and presumably drive premiums down.
There's equally strong debate about the effects of $400 billion in proposed cuts in Medicare payments to insurers, hospitals and other service providers. The study assumes those costs would be shifted to people with private insurance, but the bill's supporters say the reductions are aimed at reducing wasteful spending that drives up costs.
____
Associated Press Writer Erica Werner contributed to this report.
Loading comments…
First Posted: 10-12-09 06:27 PM | Updated: 10-13-09 06:15 PM