Insurers' Health Reform Attack Draws Fire

On Eve of Crucial Vote, Insurance Industry Releases Health Cost Estimate Which Senate Spokesman Calls a "Hatchet Job"

(CBS/AP)  Updated 6:38 p.m. Eastern

Insurance companies aren't playing nice any more on the health care overhaul.

The industry put out a report Monday concluding that the Senate's health care legislation would drive up costs to consumers, delivering a dire message at a crucial point in the debate and potentially threatening President Obama's top domestic priority.

The White House and congressional Democrats dismissed the late-in-coming message as a "hatchet job." But it put them and their allies on the defensive a day ahead of a pivotal vote in the Senate Finance Committee on sweeping legislation that aims to achieve Mr. Obama's goals of extending coverage to the uninsured and curtailing spiraling medical costs.

"I really don't think it's worth the paper it's written on," AARP Executive Vice President John Rother said Monday of the insurance industry report. "If anyone believes it, that's a problem."

The study commissioned by America's Health Insurance Plans marked a shift in strategy by the industry, which had been working for months behind the scenes to help shape health care legislation. With the Senate panel set to vote on legislation the industry fears could result in a loss of revenue, the insurers went on the attack, in dramatic fashion.

Late Sunday, AHIP sent reporters and 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.

The White House insists the bill would bring health insurance costs down. However, Paul Ginsburg, a non-partisan analyst at the Center for Studying Health System Change, told CBS News Chief White House Correspondent Chip Reid the insurance companies do have a point.

CBSNews.com Special Report: Health Care

"If people aren't mandated to buy insurance, then you will get a situation where people stay uninsured until they get sick," Ginsburg told Reid.

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.

The study "confirms that the current legislation will make coverage less affordable for individuals, families and employers, and the study shows that costs will go up even faster than they would under the current system," Karen Ignagni, the top industry lobbyist in Washington, told reporters in a conference call Monday.

The industry said the cost increases would result from new taxes and from a weakening of the penalties for failing to get insurance - a change that would let Americans postpone getting coverage until they get sick.

Ignagni said her group wanted to continue to work with lawmakers to improve the proposals on Capitol Hill, but when questioned she didn't rule out using the findings from the study in an ad campaign against Mr. Obama's plans.

Democrats and their allies criticized the report as biased.

Some insurance industry critics say the real reason insurance companies are so upset about the Senate bill is that it cuts into some very nice tax breaks for insurance company CEOs.

"I think though that maybe they have gotten worried that as we get close to really getting reform done they've gotten more worried about their profits," Democratic spokeswoman Nancy Ann de Parle told Reid.

Health economist Len Nichols of the New America Foundation contended that, among other problems, the study failed to take into account the impact of subsidies that would help low- and middle-income people buy coverage. He said it also left out a key expected impact of a proposed new tax on high-value insurance plans, which is a reduction in the use of health services.

"It was paid for by people who are not interested in an objective analysis of the truth but are interested in a particular point of view being inserted into the political process right now," Nichols said.

Spokesmen for the White House and for Finance Committee Chairman Max Baucus, D-Mont., attacked the report along similar lines. "It's a health insurance company hatchet job, plain and simple," said Baucus spokesman Scott Mulhauser.

The committee is 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 yet affordable bill. In the House, Speaker Nancy Pelosi, D-Calif., and other Democratic leaders have been pulling together legislation from three committees.

Unlike the 1990s, when it contributed to the failure of President Clinton's health overhaul, the insurance industry has been attracted by the promise of millions more people getting coverage - millions of new consumers buying policies.

The Baucus plan got a boost last week when the Congressional Budget Office estimated it would cover 94 percent of eligible Americans while still reducing the federal deficit. But Ignagni said that number needed to be in the high 90s for the system to work without crushing costs for privately insured individuals.

The PricewaterhouseCoopers analysis attempted to get at that issue, concluding 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, most 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.

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On the Net:

America's Health Insurance Plans: http://www.ahip.org/

Center for Studying Health System Change: http://www.hschange.com/

New America Foundation: http://www.newamerica.net/

Senate Finance Committee: http://finance.senate.gov/

[nocatnowaco]

do we really HOPE to get more from paying less? i agree to health care reform to control costs and coverages without direct government socializing the health care. we already have safety heath care nets for americans as medicaid and medicare from government; and if these are now broken, how can you introduce another new plan and insure that will sustain in the very long run without taxes increases? the average working americans and families need to save for their future retirements and can not afford to pay more taxes to support all the crazy progressive socialism ideas. how many are uninsured and how many are unemployed? should the domestic priority be fixing the economy? we the people depend on the free press to inform us about all the debates in fair and balance manners. alike the companies to provide the financial reports to their stock holders, the government should post all the revenues from who and expenses to what to the taxpayers on the internet for the transparency; they are public records and why every americans could not see them? every americans can see how much i make, and how much i pay taxes, and where are my taxes going: very simple fair and balance and very green on line: IT WILL EXPOSE ANY FRAUDULENT TRANSACTIONS.

[jeff-fla]

Why can't we have a plan like the kid care plan. If your income is below a certain amount, you by it from the government. $25.00 a month. I does work and it does work well. We could call it America care.

[searingtruth]

"There is a battle for good. But we are not fighting it."
SearingTruth

A Future of the Brave

[pleiku1]

I don't understand why people won't accept the status quo after all insurance companies are providing needed services to us. They are there to help us. Those hard working ins CEO deserve to be given multimillon dollar bonuses for working so hard. I mean they have families and they need to put their kids to colleges, too you know.

[kevjustice]

The greedy health insurance racket has stated they will have to raise rates but did not state the reason is so they can keep on paying their CEO 25 millions dollars a year as well as keep on making 300% profit per year.

[kevjustice]

The greedy health insurance racket has made a strong case for the public option which will keep costs down when they stated will have to raise rates.

[rhs648]

Biasbuster October 12, 2009 6:55 PM EDT
A bad bill like this will just make the deficit worse. When has our government ever met their budget targets. This bill will raise the cost of insurance AND raise the deficit.

------------------------------------------

Not only that, but the quality of care might diminish at the same time.

[searingtruth]

"Our children suffered our fault."
SearingTruth

A Future of the Brave

[searingtruth]

"Nothing for the poor.
Because they have been negligent and irresponsible.

Everything for the billionaires.
Because they have been negligent and irresponsible."
SearingTruth

A Future of the Brave

[vernique]

this is why we need a public option

[the74blaster]

Well, it looks as though the insurance companies are trying one last time to spin up a story to derail healthcare reform. I can tell everyone here when a company wants a report to say what they want it to, they find sme hungry laid off accountants to fabricate numbers.

The truth is they will tell lies, make things up and do everything in their power to keep things the way it is.

Maybe I should start an insurance company. I mean if we can charge someone $ 20,000 per year and deny coverage on everything, its pure profit.

Does anyone know if I can get a federal grant to start up an health insurance company?

[searingtruth]

"Justice is simple. Beware of those who declare it is not."
SearingTruth

A Future of the Brave

[pnut134]

The only good insurance company is a dead insurance company. Profit has no plave in health care, and the only democratic method is that everyone is on the same single player plan, including politicians.

[brian1920]

the site is full of populist nonsense posters. They want universal health care and are just fine with government fraud, waste and abuse that will make health care more expensive for everybody. They don't want efficiency or tort reform because the politicians have been bought by the lawyers. Private insurance is expensive but nothing compared to what a government program with the same level of care will cost.

[searingtruth]

"My dead child was profit."
SearingTuth

A Future of the Brave

[rplat]

The latest report is correct and the Obama administration's corrupted math will not change that fact. The public option is a certain path to fiscal destruction and socialism.

[searingtruth]

Fellow citizens,

Corporations are not here to be nice, or compassionate, or to do the "right" thing. They are here to make a profit.

And that is their just and rightful place.

Which is why we should never allow them to participate in our police, fire, health care, or military institutions.

Because these are institutions that ensure our basic human infrastructure, supporting our basic human rights, and should not be reliant upon profitability.

And this is the basic precept of justice that Obama has failed to defend, that Republicans never embraced, and that Democrats abandoned without notice sometime within the last three decades.

And why after 25 years I recently re-registered from a non-partisan voter to a full fledged contributing member of The Green Party of The United States.
ST


"But for the gentle breeze of freedom all would perish."
SearingTruth

A Future of the Brave

[jab232]

The solution to the insurance industry's threat to immediately raise premiums $4,000 a year while still keeping as many as possible of their abuses is simple. Pass a strong public option plan and require everyone to be insured. Nothing else will work. They themselves have said that.

If we do nothing, at the present trend, your premium will double in ten years and that will be for less coverage. You will still be in danger of losing your health insurance or your job if you get sick. They call that rescission. Also, many other abuses will continue. One insurance company tried to exclude a healthy baby because they said he was too heavy.

When the Insurance Lobby released this industry-complied report the day before the finance committee votes, the lobbies made it clear. There is no way to compromise with these people. They will keep putting massive amounts of money in their pockets no matter what. Pass a strong public option plan.

[searingtruth]

"The Republican and Democratic parties have delivered us into the hands of darkness."
SearingTruth

A Future of the Brave

[underdog1976]

I am a Republican who nonetheless favors Obama Care. But isn't it time for all of us to stop cheerleading and start listening to one another?

Start with CBS, who headlines this story not with the results of the study, but with the claim that it is a "hatchet job," and further claims, wrongly, that it comes at the last minute. In fact the study, conducted by well-respected PriceWaterhouseCoopers, has been a long time in the making, and only seems last-minute because of Congress's ungraceful rush to pass something. Then there is Mr. Rother, of the AARP, who dismisses the report as "not worth the paper it's written on." He was able to express his contempt in time to make the news cycle, which is probably what he had in mind. His reaction was so swift that one wonders if he had a chance to even glance at the report, or the paper it was written on. In any case, we would all be better served if Mr. Rother at least took the time to avoid a glib cliche´. I pay dues to the AARP, and I demand cliches of much higher caliber than this.

I haven't read the study yet either, and have no idea whether it is valid. Because it was funded by the insurance industry, we are justified in viewing it critically. But the industry not only has a vested interest, but also a lot of expertise. Likewise PriceWaterhouseCoopers. If CBS and the rest of us are going to be responsible about this, one of the most important issues of our age, we must rise to a higher standard than that of a bunch of beer-soaked partisans at a football game.