New Bill Would Raise Rates, Says Insurance Group
Report Issued Before Key Committee Vote
Monday, October 12, 2009
After months of collaboration on President Obama's attempt to overhaul the nation's health-care system, the insurance industry plans to strike out against the effort on Monday with a report warning that the typical family premium in 2019 could cost $4,000 more than projected.
The critique, coming one day before a critical Senate committee vote on the legislation, sparked a sharp response from the Obama administration. It also signaled an end to the fragile detente between two central players in this year's health-care reform drama.
Industry officials said they intend to circulate the report prepared by PricewaterhouseCoopers on Capitol Hill and promote it in new advertisements. That could complicate Democratic hopes for action on the legislation this week.
Administration officials, who spent much of the spring and summer wooing the insurers, questioned the timing and authorship of the report, which was paid for by America's Health Insurance Plans (AHIP), an industry trade group.
"Those guys specialize in tax shelters," said Nancy-Ann DeParle, director of the White House Office of Health Reform. "Clearly this is not their area of expertise."
At the same time, White House officials were forced to retreat from plans to tout Republican endorsements of Obama's top domestic policy initiative. White House Chief of Staff Rahm Emanuel instructed the Democratic National Committee on Sunday to withdraw a pro-reform television commercial featuring former Senate Republican leader Robert J. Dole, after he objected that his words were being used for partisan purposes.
The developments came as administration officials were beginning to boast of fresh momentum in the drive to remake the nation's $2.4 trillion health sector. Senate Finance Committee Chairman Max Baucus (D-Mont.) has expressed confidence he has the votes to pass his 10-year, $829 billion legislation out of committee on Tuesday, enabling party leaders to prepare a final bill for floor debate.
"What's remarkable is not that we've had a spirited debate about health insurance reform, but the unprecedented consensus that has come together behind it," Obama said in his weekly radio and video address.
The frontal assault, though not unexpected, was an illustration of the challenges that lie ahead as the president attempts to deliver the sort of health-care overhaul that has eluded his predecessors for decades. Though open to dispute, the analysis is certain to raise questions about whether Obama can deliver on his twin promises of extending coverage to millions of uninsured Americans while also curbing skyrocketing health-care costs.
Early in his quest, Obama wooed industry leaders in the hopes of neutralizing many of the players who helped defeat a similar effort by President Bill Clinton. Yet as the process has moved from high-minded concepts to legislative details, the tension has mounted. Hospitals and doctors have increasingly grumbled that the administration is not keeping bargains it struck over how many Americans would be covered under reform and what payment changes would be made.
But no industry has reacted with the same intensity as the insurance lobby.
"The report makes clear that several major provisions in the current legislative proposal will cause health care costs to increase far faster and higher than they would under the current system," Karen Ignagni, AHIP's president and chief executive, wrote to board members Sunday. "Between 2010 and 2019 the cumulative increases in the cost of a typical family policy under this reform proposal will be approximately $20,700 more than it would be under the current system."