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Health Insurers Emerge as Obama's Top Foe in Reform Effort

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By Ceci Connolly
Washington Post Staff Writer
Wednesday, October 14, 2009

Now they have an enemy.

For months, President Obama and his administration waged their fight for a health-care overhaul without a clear opponent, even courting the industry executives and interest groups that helped kill reform efforts 15 years ago.

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But attacks on the leading Democratic reform plan this week by the insurance lobby left little doubt that two of the most powerful institutions involved in the debate -- the White House and the nation's insurance companies -- have abandoned any real hope of forging a compromise. What was a tenuous truce has turned quickly into an all-out battle, with both sides ratcheting up the hostilities.

As the Senate Finance Committee on Tuesday approved a 10-year, $829 billion bill to remake the health-care system, Obama's top advisers and the insurers moved into a more intense stage of conflict.

"The insurance industry has decided to lead the charge against health reform, and everyone recognizes their motives: profits," said White House deputy communications director Dan Pfeiffer. "We are going to make sure they can't sink this effort at the last minute."

Pfeiffer castigated the industry for releasing a report Monday that concluded that the finance panel's bill would increase costs for consumers. "They made themselves a very good foil," he said.

The insurers, however, showed no sign of being chastened. America's Health Insurance Plans, an industry trade group, opened a fresh line of attack with a multistate advertising campaign warning that senior citizens enrolled in private Medicare plans could lose benefits under the legislation.

"Is it right to ask 10 million seniors on Medicare Advantage for more than their fair share?" the television spot asks. "Congress is proposing $100 billion in cuts to Medicare Advantage. The nonpartisan Congressional Budget Office says many seniors will see cuts in benefits."

The Finance Committee's bill would reduce spending on the plans AHIP cites by $113 billion over the next decade, which could mean reduced insurer profits, higher co-payments by beneficiaries or fewer extra benefits such as eyeglasses and gym memberships.

"We want to begin to build an awareness of the potential implications to seniors," said AHIP President Karen Ignagni.

She declined to say how much money would be spent on the commercials airing in six states, but one advertising analyst said the industry has enough cash to pose a serious threat. "They can spend whatever they feel they need to influence this," said Evan Tracey, president of the Campaign Media Analysis Group. "Seniors are a very important group politically."

The insurance sector and health maintenance organizations spent more than $116 million on lobbying in the first six months of this year, according to an analysis by the nonpartisan Center for Responsive Politics.


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