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Health insurers to release report projecting rising premiums

Obama officials, who have been wooing the insurers, question the timing and source of the report.

October 12, 2009|Washington Post

WASHINGTON — After months of collaboration on President Obama's attempt to overhaul the nation's healthcare system, the insurance industry plans to strike out against the effort today with a report warning that the typical family premium could rise over the next decade by $4,000 more than projected under current law.

The critique, coming one day before a key 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 healthcare drama.

Industry officials said they intended to circulate the report on Capitol Hill and promote it in 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 prepared by PricewaterhouseCoopers and paid for by America's Health Insurance Plans, 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 had 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-overhaul television commercial featuring former Sen. Robert Dole (R-Kan.) after Dole objected that it was being used for partisan purposes.

The developments came as administration officials were beginning to boast of 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 that he has the votes to pass his 10-year, $829-billion legislation out of committee Tuesday, letting party leaders prepare a bill for floor debate.

Obama had courted industry leaders in the hopes of neutralizing many of the players who helped defeat a similar effort by President Clinton. Yet as the process has moved from abstract concepts to legislative details, the tension has mounted. Hospitals and doctors have increasingly complained that the administration is not keeping bargains it struck over how many Americans would be covered by an overhaul 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 healthcare costs to increase far faster and higher than they would under the current system," Karen Ignagni, chief executive of America's Health Insurance Plans, 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."

At the heart of the argument is whether the finance committee bill does enough to draw young, healthy people into the insurance pool. Industry analysts predict that by postponing and reducing penalties on those who fail to buy health insurance, it would attract less-healthy patients who would drive up costs.

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

"Now that healthcare 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."

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