By Shailagh Murray
Washington Post Staff Writer
Thursday, October 15, 2009 6:00 PM
House Speaker Nancy Pelosi warned insurance companies on Thursday that health-care reform could cost the industry dearly through new fees, fewer regulatory protections and fresh competition from the federal government.
The blunt admonition echoed a round of harsh statements Wednesday from senior Senate Democrats, and came in response to the insurance's lobby's aggressive campaign to block reform legislation from advancing. An internal industry study released earlier this week found that the Senate reform bill would cause premiums to rise sharply, but the report's findings have been widely disputed.
The tactic now appears to have backfired, as Democrats vow to redouble their efforts to crack down on insurer's practices. Health-care negotiators are working behind closed doors to merge different pieces of legislation into separate bills that are expected to reach the House and Senate floors next month.
"It is absolutely clear that it is an unsustainable situation as we go forward, and it is well known to the public that the health insurance companies are the problem," said Pelosi.
Pelosi said the House may adopt a Senate provision that would assess a flat fee on insurance companies that is expected to generate about $40 billion over 10 years, as a way to pay for its reform bill. She advocated House language that would require health-insurance companies to to spend 85 cents of every dollar they collect in premiums on benefits.
And she singled out the antitrust exemption that has protected the industry since 1945, the McCarran-Ferguson Act that allows states to regulate insurance without interference from the federal government.
"There is tremendous interest in our caucus, and, in fact, the Judiciary Committee has had a hearing on ending the exemption," said Pelosi.
But the key to driving down premium costs, she said, is for Congress to create a public insurance option to compete with private plans on the new exchanges that would be created under the reform bills for people who don't have access to employer coverage. Pelosi said she would urge the House to adopt the toughest possible version of a public option, applying Medicare's low reimbursement rates to it, to strengthen prospects that the provision would survive final negotiations with the Senate.
"I want to send our conferees to the table with the most muscle for America's middle class," said Pelosi. "This is about going into that room and coming out with the best coverage and the lowest cost for America's working families."
But Senate Democrats remain divided over the public option, with many moderates preferring a more limited version, or none at all. A closed-door meeting of Senate Democrats produced some fireworks, participants said, between liberal Democrats and their more centrist colleagues.
"People have opinions about important parts of this bill," Senate Majority Leader Harry Reid (D-Nev.) said after the session. "And there are challenges that lie before us, because the Republicans are going to insist that we do it alone."
In search of maximum leeway, Reid said he would reach out to GOP senators who could become converts, depending on the final shape of the bill.
"I have spoken to two other Republicans today on health care, and who knows? We may be get help from one of those two or both of those. So we're not writing off the Republicans," Reid said.
One top Reid target: Sen. Susan Collins of Maine, the homestate colleague of Sen. Olympia Snowe, the only Republican to vote with Democrats last week on the Senate Finance Committee bill. Another prospect is Sen. George Voinovich (R-Ohio), who is retiring in 2010.