Dems scramble after warning from health insurers

http://apnews.myway.com/article/20091012/D9B9QLO81.html

By RICARDO ALONSO-ZALDIVAR

(AP) Senate Finance Committee member Sen. Olympia Snowe, R-Maine talks
to reporters outside of the...
Full Image

Google sponsored links
Congressman With Guts - Rep. Grayson is working hard for real health
care reform. Join him.
CongressmanWithGuts.com

Utah Health Insurance - Selecthealth Humana Assurant Altius Blue
Cross. All Companies. One Site
www.quotemymed.com

WASHINGTON (AP) - 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.

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.

(AP) Sen. Jack Reed, D-R.I., left, talks with Senate Finance Committee
member Kent Conrad, D-N.D. as...
Full Image
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."

(AP) Senate Finance Committee member Sen. Jon Kyl, R-Ariz., left,
followed by Judiciary Committee...
Full Image
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.

(AP) In this Oct. 1, 2009 file photo, Senate Finance Committee
Chairman Sen. Max Baucus, D-Mont....
Full Image
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.

(AP) In this Oct. 5, 2009, file photo President Barack Obama shakes
hands with doctors after...
Full Image
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.