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Health Industry Concerned About Reform Measures

House Speaker Nancy Pelosi (D-Calif.) says that she has the votes in her chamber to authorize a government-run insurance program and that she will ask the Congressional Budget Office to analyze three versions of a public option.
House Speaker Nancy Pelosi (D-Calif.) says that she has the votes in her chamber to authorize a government-run insurance program and that she will ask the Congressional Budget Office to analyze three versions of a public option. (By Evan Vucci -- Associated Press)

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By Ceci Connolly
Washington Post Staff Writer
Friday, October 9, 2009

The industry heavyweights President Obama neutralized through the summer are agitating that the health-care bills in Congress violate agreements they made with the White House, leave 25 million Americans uninsured and have the potential to increase medical costs.

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One day after Democrats celebrated the news that a bill drafted in the Senate Finance Committee would not increase the deficit, the prospects for speedy enactment of landmark reform grew murkier. Industry leaders, who have held their tongues for months, spoke in increasingly dire tones Thursday about the impact of the Democratic proposals, raising the specter of an eleventh-hour lobbying campaign to defeat Obama's centerpiece domestic policy goal.

Many lobbyists and independent analysts underlined what they called major flaws in the Finance Committee's bill, saying it probably would draw the sickest, most expensive patients into the health coverage system without balancing the insurance risk with more young, healthy people. The result, they predicted, would be ever-rising premiums for the people, businesses and governments that pay for medical care.

"The consequences of this would be an upward spiral; rate shock to everyone who stays in," said Karen Ignagni, president of the industry group America's Health Insurance Plans. "This legislation will fail the test of affordability for individuals."

White House officials, mindful of a possible industry uprising, stressed that the legislation is a "work in progress." Administration senior health adviser Nancy-Ann DeParle and economic adviser Lawrence H. Summers met with Ignagni for an hour Wednesday.

"There are a number of protections in the bill that would mitigate against any concerns" the industry has, DeParle said, citing a proposed $25 billion reinsurance fund to buffer against heavy losses.

The American Medical Association is concerned because the 10-year $829 billion cost of the Senate bill does not include $200 billion in promised higher Medicare payments.

Hospital executives, meanwhile, complained that the legislation would leave 25 million people without coverage in 2019. The uninsured place a high burden on hospitals, which are required by law to treat everyone who arrives at an emergency department, regardless of citizenship or ability to pay. Those costs result in debt for hospitals and higher fees for people with insurance.

"One of the main purposes of health reform is to get as many Americans covered as possible," said Chip Kahn, president of the Federation of American Hospitals.

The trade group and two other hospital associations struck a deal with the White House and Finance Committee Chairman Max Baucus (D-Mont.) to accept $155 billion less in Medicare payments over the next decade if 94 percent of all residents -- legal and illegal -- are insured. The Congressional Budget Office reported Wednesday that the finance panel's bill would extend coverage to 91 percent of residents.

"The Senate has a ways to go to meet our deal," said Kahn, who was behind the "Harry and Louise" ads that criticized President Bill Clinton's attempt at health-care overhaul. "When you're taking $350 billion away from services for Medicare beneficiaries and use that to fund other care, covering 29 million people isn't good enough."

Said White House deputy communications director Dan Pfeiffer: "The president has always believed that the best way to . . . pass comprehensive health reform is by having all of the stakeholders at the table. We will continue working with the hospitals, doctors and others to provide access to affordable coverage for as many Americans as possible."

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