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Edited on Mon Oct-12-09 06:44 PM by Ardent15
In the health care reform debate, where playing nice has been the rule, a scathing insurance industry report looked to critics Monday like a grenade aimed at scuttling progress in Congress. But it also looked to some like too little, too late. Not only did the report land many months into the debate — with Democrats on the cusp of passing bills through five committees — it infuriated some of the very people the industry group hoped to influence. “I don’t view the impact of the report as a bill-stopper as much as a bill-changer,” said Robert Blendon, a health policy pollster and political analyst at Harvard University. “The momentum is way too far , and there is a sense out there that something has to be done.”
On the eve of a crucial vote in the Senate Finance Committee on Tuesday, the industry group, America’s Health Insurance Plans, raced against the White House and Senate Democrats to frame the 26-page analysis conducted by PricewaterhouseCoopers, which concluded that premiums would cost more under the Finance Committee legislation than under the current system.
White House and Senate officials hinted at the possibility of legislative payback for releasing a report Democrats described as deeply flawed and self-serving. At the very least, officials said, it will help Democrats close ranks behind the Finance Committee bill, which had come under fire from the progressives as too moderate.
They also predicted liberal lawmakers will go harder after the insurers, perhaps by proposing a cap on premiums or solidifying support for the government insurance plan.
“They have opened themselves up,” said a senior Senate Democratic aide. “It is an incredibly stupid strategic blunder. If you are going to fire a shot like this, you fire a good shot.”
AHIP chief Karen Ignagni defended the report as an effort to shape the congressional debate. Insurers were counting on a mandate requiring Americans to own health insurance, and a penalty as high as $3,800 a family to require it.
But during the Finance Committee markup, that fee was cut to $1,500 per family and phased in over several years — leading PricewaterhouseCoopers to conclude that healthy people wouldn’t buy insurance and the notion of coverage-for-all would collapse.
The weak mandate, coupled with a requirement on insurers to provide coverage regardless of pre-existing conditions, will drive up the cost of health insurance premiums, so that the average family’s premium could cost $4,000 more by 2019, the report said.
“Because we don’t see comprehensive cost control in any piece of legislation, we’re looking at continuing those projected 6.2 percentage point increases” in annual health care costs, she said.
Against strong criticism from Democrats, Ignagni said she stood by the report, saying it was conducted by a “world-class firm with a stellar reputation.”
The timing of the report left longtime observers of the insurance industry scratching their heads.
Wendell Potter, a former executive at CIGNA who has been speaking out against insurance industry practices, said AHIP was responding to critical analyses from Wall Street that the weakened penalty will hurt private insurers.
“Karen had no alternative because the CEOs were so determined to do something to try to sway the committee to back off the reductions. She didn’t have an alternative,” Potter said. “They are obviously doing this on the eve of the vote in the Senate Finance Committee, hoping enough members of the committee would be concerned, to restore it. I think the strategy will backfire.”
Ignagni made a high-profile promise to the president in March that she would work to pass a bill, and at least publicly, she was was welcomed at the table until now. However, since the summer, both the White House and the industry have been increasingly at odds over the direction of reform, and the report seems to mark a final break. Some Democrats yesterday even hinted that Ignagni released the report because the chief executives she represents were angered by a provision in the Senate Finance bill that would cap insurance executives’ pay – a charge an Ignagni spokesman denied.
Senate and White House officials blasted out emails critical of the industry throughout the day. The network of liberal media and think tank groups -- nurtured over the years to respond at moments like this -- pushed back with wonky critiques that were then circulated by Democratic officials. Senate Finance Committee staff convened an unusual late-afternoon conference call to debunk the analysis.
For example, Finance Committee aides said, the study assumes that a proposed 40-percent fee on insurers that offer high-cost insurance, and more than $100 billion in taxes on the health care industry will be passed directly onto consumers without forcing any kind of behavioral changes by individuals or companies. In essence, the study looked at the worst-case scenario and failed to consider mitigating forces such as tax credits to purchase insurance, Democrats said.
“The misleading and harmful claims made by the profit-driven insurance companies are politicking for corporate gain at its worst,” Sen. John Rockefeller (D-W.Va.) said in a statement. “Their recent statements only further highlight that our focus here in Congress must be on the inclusion of a public health insurance option in the marketplace to protect families and put more money back in their wallets by creating greater competition and driving down costs.”
While Democrats were slamming the bill, Republicans didn’t rush out statements touting the findings. Senate Minority Leader Mitch McConnell (R-Ky.) issued a tepid embrace of the report Monday, referring to it with the phrase “outside experts.” “Higher premiums, higher taxes, and more government — that’s not reform. But that’s precisely what the American people, the Congressional Budget Office and now outside experts have identified with this trillion-dollar experiment that cuts Medicare, raises taxes and premiums and threatens the health care options that millions of Americans enjoy. I think we ought to listen to the American people, rather than trying to jam through another 1,000-page bill,” McConnell said.
One possible reason for the Republican reticence — health insurance companies are viewed by the public as one of the least-trusted figures in the health care debate, Blendon said.
But Democrats may not be able to simply rely on Americans just dismissing the source, Blendon said. They will need to actively debunk the charges by commissioning their own report, perhaps from the Congressional Budget Office or a panel of economic experts, he said.
That’s because he said the report could reignite concerns among average Americans that the reform will not leave them better off than they are now.
“In the world of politics, this is a serious accusation,” Blendon said of the report. “People are really worried the bill will cost average middle income people more than they anticipated. Someone is going to have to respond as to why these are not accurate assumptions.”
The report alone seemed unlikely to scramble the Finance Committee vote.
Sen. Olympia Snowe (R-Maine), who could support the bill Tuesday, doesn’t agree with the individual mandate or the penalty — the two main parts of the legislation AHIP is trying to defend. Snowe was the driving force behind reducing the original $3,800 fee.
A spokeswoman for Sen. Ron Wyden (D-Ore.), an undeclared Finance Committee member, did not respond to a request for comment. Rockefeller has also not declared how he will vote, but his comments show he is no fan of the insurance industry.
<http://www.politico.com/news/stories/1009/28213.html>
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