Democrats Attack Insurers’ Claim That Health Premiums Will Rise

White House officials and Democratic lawmakers are fighting assertions from insurers that the Senate Finance Committee health bill would push health insurance premiums higher.

The Associated Press: "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." Democrats, including Senate Finance Committee Chairman Max Baucus to White House spokeswoman Linda Douglass, lambasted the study that said health insurance premiums will sharply increase if the Finance Committee bill passes (Alonso-Zaldivar, 10/13).

Politico: "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.'"

Republicans didn't come to the aid of the study that was attacked vigorously throughout the day Monday, Politico reports. "Senate Minority Leader Mitch McConnell (R-Ky.) issued a tepid embrace of the report Monday, referring to it with the phrase 'outside experts'" (Budoff Brown, 10/12).

The New York Times: "Senator Michael B. Enzi, Republican of Wyoming, said, 'This report confirms what I have been saying all along: the combined impact of new taxes, mandates and entitlement expansions in the Baucus bill will substantially increase the price that many Americans pay for their health insurance.'" But the agency with oversight to "score" the bill remains mum on the subject: "While supporters and opponents make conflicting projections, the nonpartisan Congressional Budget Office has said it cannot calculate the 'net effect' of the proposed legislation on overall health care premiums because there are too many uncertain factors." (Pear and Herszenhorn, 10/12).

The Washington Post: "Until now, Obama had succeeded in keeping most of the major interest groups at the bargaining table with the lure of up to 50 million new customers. But insurers have grown increasingly critical of the Finance bill, saying it does not do enough to bring healthy young people into insurance risk pools. ... White House budget chief Peter Orszag, citing estimates by the Congressional Budget Office, said that a new insurance marketplace, dubbed an exchange, could attract 22 million customers by 2015. 'It's hard to see how that doesn't provide adequate risk pooling and scaling,' he said in an interview Monday" (Connolly, 10/13).

Bloomberg reports on the American Medical Association's reaction to the back-and-forth on Monday: "The American Medical Association 'will stay constructively engaged in the legislative process to ensure that the final bill improves the system for patients and their dedicated physicians,' said James Rohack, president of the Chicago-based group, the largest organization for doctors" (Gaouette and O'Leary, 10/13). 

CBS News reports on the AARP reaction: "'I really don't think it's worth the paper it's written on,' AARP Executive Vice President John Rother told reporters Monday. 'If anyone believes it, that's a problem.'

NBC News: "White House Office of Health Reform director Nancy Ann DeParle told NBC's Chuck Todd today that she felt 'blindsided' by the health insurance industry's study today cricitizing what it concluded would be rising premiums under proposed reform plans. ... Citing the estimates of cost reduction, DeParle said 'the CBO believes that the reforms that are going to be put in place will bring costs down over time,' adding: 'they say the high cost tax on high cost plans will only be borne by plans for a limited amount of time'" (Weinberg, 10/12).

The NewsHour with Jim Lehrer interviewed DeParle, who said she thinks its more an effort to have a new negotiating tactic than an effort to kill the bill. The NewsHour also spoke with Ignagni, who said: "We have worked very hard from the beginning of this year to enter the health care reform discussions with legitimate proposals ... the experience at the state level indicates that you have to have everybody participate. A number of policy analysts have come to the same conclusion that we have. And what happened in the states was exactly the following, that, in states that enacted market reform without everyone participating, you had rate shock. You had people leaving the pool who were young and healthy, spiraling up the costs for everyone else. This is not a projection. This is what happened at the state level" (Warner, 10/12).

The Wall Street Journal reports that AHIP is planning television ads citing the findings of the report. "the group still backs efforts to pass health legislation. But [Ignagni] said the combined changes made to the Finance bill will increase costs, not lower them. 'Congress, too early, gave up on the goal of bending the cost curve,' she said" (Hitt and Adamy, 10/13).

AHIP partly blames two amendments from Sen. Chuck Schumer "one exempting 2 million people from being required to buy health insurance, and another that weakened and phased in penalties for those who do have to buy it," Newsday reports (Brune, 10/12).

Time examines the insurers' case: "One problem with the industry-funded report is that it bases its prediction on provisions in the bill that increase costs, while ignoring others that seek to mitigate those costs - such as subsidies to help many currently uninsured Americans purchase coverage. ... Still, behind all the debunked and debated facts lies one irrefutable truth: even Finance Committee staff admit they do not know the precise effect the bill will have on private-insurance premiums" (Pickert, 10/13).

One leading health economist rebuts the findings, according to The New York Times in a separate story. MIT's Jon Gruber was asked by Senate Democrats to look at the study and said "the industry report failed to take into account administrative overhead costs that he said will 'fall enormously' once insurance polices are sold through new government-regulated marketplaces, or exchanges." (Herszenhorn and Stolberg, 10/13).