Democrats scramble for damage control

Insurance companies aren’t playing nice any more. Their dire message that health care legislation will drive up premiums for people who already have coverage comes as a warning shot at a crucial point in the debate, and threatens President Barack Obama’s top domestic priority.

Democrats and their allies scrambled on Monday to knock down a new industry-funded study forecasting that Senate legislation, over time, will add thousands of dollars to the cost of a typical policy. “Distorted and flawed,” said White House spokeswoman Linda Douglass. “Fundamentally dishonest,” said AARP’s senior policy strategist, John Rother. “A hatchet job,” said a spokesman for Senate Finance Committee chairman Max Baucus, D-Mont.

But the health insurance industry’s top lobbyist in Washington stood her ground. In a call with reporters, Karen Ignagni, president of America’s Health Insurance Plans, pointedly refused to rule out attack ads on TV featuring the study, though she said she believed the industry’s concerns could be amicably addressed.

At the heart of the industry’s complaint is a decision by lawmakers to weaken the requirement that millions more Americans get coverage. Since the legislation would ban insurance companies from denying coverage on account of poor health, many people will wait to sign up until they get sick, the industry says. And that will drive up costs for everybody else.

Insurers are now raising possibilities such as higher premiums for people who postpone getting coverage, or waiting periods for those who ignore a proposed government requirement to get insurance and later have a change of heart.

The drama threatened to overshadow Tuesday’s scheduled vote by the Senate Finance Committee on a 10-year, $829-billion plan that Baucus has touted as the sensible solution to America’s problems of high medical costs and too many uninsured.

The Baucus bill is still expected to win Finance Committee approval. The insurance industry is trying to influence what happens beyond the vote, when legislation goes to the floor of the House and Senate, and, if passed, to a conference committee that would reconcile differences in the bills.

It’s at that final stage where many expect the real deal will be cut.

“We’ve got ourselves a real health care shooting war now,” said Robert Laszewski, a former health insurance executive turned consultant. “The industry has come to the conclusion that the way things are going in Congress, we’ll have a … formula that will be disastrous for their business, so they can’t stand on the sidelines any longer.”

Questions about the technical soundness of the industry analysis by the PricewaterhouseCoopers firm was a big part of the discussion Monday. The release of the study late Sunday on the eve of the federal Columbus Day holiday had Democrats crying foul.

“The misleading and harmful claims made by the profit-driven insurance companies are politicking for corporate gain at its worst,” said Sen. Jay Rockefeller, D-W.Va.

Democrats have reason to worry. Insurance industry opposition helped sink President Bill Clinton’s health care plan in the 1990s by fanning fears that people with coverage would wind up paying more.

Ignagni was unequivocal in her support for the PricewaterhouseCoopers conclusions. The company is “a world-class firm” with “a stellar reputation,” she said.

The study projects that the legislation would add $1,700 a year to the cost of family coverage in 2013, when most of the major provisions of the Baucus bill would be in effect.

Premiums for a single person would go up by $600 more than would be the case without the legislation, it estimated.

In 10 years’ time, premiums would be $4,000 higher for a family plan, and $1,500 more for individual coverage.

Finance Committee aides to Baucus said it’s impossible to predict premiums down to the dollar because there are too many variables involved.

The technical issues behind the study are complex, and it will take time for neutral experts to deliver a final judgment. The issue boils down to questions of coverage and cost shifting.

The industry is arguing that the consequences of the bill will be shifted onto those who are already covered. Insurers are not alone. Representatives of the hospital industry have raised similar concerns, though in less stark terms.

The study finds fault with what Baucus sees as one of the crowning achievements of his bill. Even with a tight budget, it would cover an estimated 94 percent of eligible Americans, up from about 83 percent now. The study — and the insurance industry — say that’s not enough, particularly since senators have weakened the stiff fines Baucus originally proposed for ignoring a requirement to get coverage.

“You really have to have a coverage level in the high 90s to make this work,” Ignagni said.

The PricewaterhouseCoopers study also assumes that proposed taxes on high-cost insurance, new levies on insurers and other health industry firms, and Medicare cuts will be directly passed on to privately insured policyholders.

Critics of the study said it tilted those assumptions too far toward a worst case, ignoring the bill’s potential to curb costs.

For example, the tax on high-cost health insurance that Baucus is proposing could lead employers and individuals to switch to lower-cost plans and avoid the levy. If that happens, there would be no additional costs to pass on to consumers.

The study “assumed the tax would have no behavioral effect, contrary to every other tax in the history of civilization,” said economist Len Nichols of the nonpartisan New America Foundation.

Critics also said the study doesn’t take into account proposed insurance exchanges, a new marketplace that would be designed to foster competition and presumably drive premiums down.

There’s equally strong debate about the effects of $400 billion in proposed cuts in Medicare payments to insurers, hospitals and other service providers. The study assumes those costs would be shifted to people with private insurance, but the bill’s supporters say the reductions are aimed at reducing wasteful spending that drives up costs.

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Associated Press Writer Erica Werner contributed to this report.

8 Responses to "Democrats scramble for damage control"

  1. Klaus Hergeschimmer  October 12, 2009 at 6:32 pm

    The D-Crappers always react to situations and never show any strategic thought as to how to counter the venom of the Health Care Robber Barrons.

    Hah! The D-Crappers couldn’t find their way out of a paper bag.

    I used to call up my D-Crapper Congress and Senate stooge reps but I’m tired of spinning my wheels to
    D-Crapper Stooges who are only looking after making sure they get their rich cornithian leather high backed chairs for their next term.

    Stupid D-Crappers!!!

  2. Carl Nemo  October 12, 2009 at 7:25 pm

    A “Ship of Evil Fools” is what best describes the 535 members of Congress between the House and Senate.

    Although private enterprise is rife with skulduggery and graft; they still have to make a profit and pay taxes unlike wasteful politicians who only spend money and pander to the unwashed masses for votes.

    So I would trust an industry based study infinitely more so than anything profferred by Senator Max Baucus & Co.; ie., “The Gang of Six”.

    They line their PAC’s and presumably take bribes too all deposited in their offshore Cayman accounts. They produce nothing and waste an infinite amount of national resources with their hollow, wasteful, citizen unfriendly legislation.

    Fie on them all. Unfortunately there’s no hell either hot or deep enough for the lot of them…!

    http://en.wikipedia.org/wiki/Ship_of_Fools

    Carl Nemo **==

  3. storky  October 12, 2009 at 7:44 pm

    Drive up the cost of insurance????!!!

    Why, that’s never happened before!

    My employer changes insurers every two years because of the improved service and coverage offered by this extremely competitive industry.

    {sarcasm off}

  4. gazelle1929  October 12, 2009 at 8:32 pm

    I am not a hundred percent sure (perhaps 90 percent sure) that the “report” is subtly cooking the books.

    They say “PwC has previously estimated that structural reforms, such as improved wellness and prevention, disease
    management, value based payment reform, improvements in health information technology, comparative effectiveness and malpractice reform, could mitigate growth in healthcare costs by between 0.5 and 1.0 percent per
    year after an initial investment period.”

    But when they make projections of healthcare increases they appear not to include these “structural changes” in projecting the Senate plan while they do use those anticipated savings in predicting the future without the Senate plan. As a sheer guess, at a flat one percent a year over ten years, that means they are overstating the Senate bill increases by something around $1500 for a family plan.

    If they are using this sleazy tactic, how the heck can you trust anything they say, because they are going to be using other sleazy tactics, at least in my humble opinion.

  5. Jim C  October 12, 2009 at 9:08 pm

    Frankly , I’m suspicious of this whole kabuki dance . The notion that the insurance industry is suddenly worried , worried I say about the fectless giveaway that is the Baucus bill doesn’t stand the smell test . And the idea that Baucus is standing nobly up to and confronting them is a real knee slapper . Yeah , sure , after they have given him millions and even have their lobbiests on his staff no doubt writing said bill . Anybody that believes this nonsense please get in touch with me , I have a bridge for sale . What’s going on here is the insurance companys are trying to give Baucus credibility hoping the stupid american public will think ” yeah , pass that bill , it must be good because they hate it ” . Anyone who wonders what’s going on here just go get a copy of ” Song of the South ” and read the story about Brer Rabbit and the Tar Baby , I believe that will explain it rather well .

  6. woody188  October 12, 2009 at 10:52 pm

    I think you nailed it Jim, and it’s carried far and wide by the compliant corporate media.

    Although the industry does make a point. It costs me roughly $10,000 per year to insure my family. Why wouldn’t I take the $1,800 penalty for not having it until I get seriously sick and pocket the $8,200 difference?

    Just makes more fiscal sense because they have to cover me even if I’m already sick thanks to this bill. And I’ve been looking to get myself another Harley-Davidson for touring on. :)

  7. Carl Nemo  October 12, 2009 at 11:07 pm

    Hi Jim C.,

    Your thoughts are counterintuitive, but quite possibly spot on in terms for staged propaganda to create the illusion that the crooked insurers standing up to Congress; ie., crooked too, but somehow in the simplistic minds of the “something for nothing” citizens to believe that legislation will give them basically medical for minimal, to zero costs regardless of the nightmare behind the numbers and the glaring cost increases in the face of existent and future non-factored inflation to come.

    They promise much, but will deliver little, simply because the core principles of economics will not allow it…I guarantee!

    America is now in a phase of devouring itself as well as its children for generations to come. : |

    Carl Nemo **==

  8. Jim C  October 13, 2009 at 9:52 am

    Carl , how else can you explain what’s going on ? Do you really believe that Baucus has suddenly decided to challenge the industry that has been lining his pockets , that he has allowed to literally write the bill ? His top assistants are all corporate lobbyists . Why did the insurance industry suddenly at the last minute make such a ham handed and obvious move , they’ve known what was in this bill all along and had been cheering it on . What has been happening is Baucus has been getting lots of heat to the point of having adds run against him in his state . It has been shown loud and clear day after day that he is in their pocket , not good publicity . Just look at the lead article today on CHB ” Healthcare report may backfire on industry ” complete with picture of a resolute looking Baucus . I’m listening to Bill Prest and he just made the comment ” the industry must be afraid of this bill the way they’re now fighting it ” . This bill is an industry wet dream and has been widely panned as such , nothings changed , the bill is still awful . What is different is that the people who should know better are now mindlessly promoting it . The very same bill that a few days ago was understood to be a give away to the industry is suddenly being hailed as divinely inspired , a proverbial knife to the heart of the beast , yeah , right . So call me Cassandra , but I’m more than a little suspicious of this thing being rolled in and blindly celebrated as victory . Remember two old adages , ” beware of Greeks bearing gifts ” and ” thou protest to much ” , I think we’re being had .

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