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Insurance Group Says Health Bill Will Mean Higher Premiums

Senate Finance Committee Chairman Sen. Max Baucus, D-Mont. enters an elevator on Capitol Hill in Washington, Thursday, Oct. 8, 2009. On Thursday, Senate Majority Leader Harry Reid of Nev. announced that the Finance Committee will vote next week on the health care bill. (AP Photo/Harry Hamburg)
Senate Finance Committee Chairman Sen. Max Baucus, D-Mont. enters an elevator on Capitol Hill in Washington, Thursday, Oct. 8, 2009. On Thursday, Senate Majority Leader Harry Reid of Nev. announced that the Finance Committee will vote next week on the health care bill. (AP Photo/Harry Hamburg) (Harry Hamburg - AP)

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At the heart of the argument is whether the Finance Committee bill does enough to draw young, healthy people into the insurance risk pool. By postponing and reducing penalties on people who do not sign up for health insurance, industry analysts predict it would attract less-healthy patients who would drive up costs.

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"Market reform enacted in the absence of universal coverage will increase costs dramatically for many who are currently insured by creating a powerful incentive for people to wait until they are sick to purchase coverage," the authors of the report wrote.

The analysis also examined three other provisions of the bill scheduled for a committee vote Tuesday: a new tax on high-priced "Cadillac" policies, spending reductions in the Medicare and Medicaid programs, and billions in new fees that would be imposed on the health sector.

On Sunday, Democrats blasted the industry's decision to release the report.

"Now that health-care reform grows ever closer, these health insurers are breaking out the same, tired playbook of deception to prevent millions of Americans from getting the affordable, accessible care they need," said Finance Committee spokesman Scott Mulhauser. "It's a health insurance company hatchet job, plain and simple."

DeParle and Mulhauser said the study overlooks key elements of the bill, such as a $25 billion reinsurance fund to buffer the industry from heavy losses and a provision that allows consumers to keep the insurance they have with limits on premiums increases.

Last week, the nonpartisan Congressional Budget Office released a preliminary estimate that the legislation would reduce the federal deficit by $81 billion by 2019 and would probably extend coverage to 29 million Americans who currently lack insurance. That would leave about 25 million people in the country without coverage.

Enrolling millions of people in a new insurance marketplace known as an exchange, tightening regulations on insurers and providing tax credits to millions of Americans should all lower costs, DeParle said. Contrary to the insurance industry's projections, she said, she expects growth in insurance rates to be slower than anticipated if reform is enacted.

In an effort to lend the health-care reform push a bipartisan tint, the White House has orchestrated a series of announcements by prominent Republicans hailing the importance of enacting legislation this year. But Dole, in an interview with ABC News, complained that the Democratic National Committee misinterpreted his comment that "we've got to do something."

Spokesmen for the party and the White House confirmed Sunday that the spots would be withdrawn.


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