Washington 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 today’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.
Late Monday, the accounting firm issued a statement acknowledging it did not look at the entirety of the legislation, only the effects of four provisions that the insurance group wanted analyzed. While not retreating from its findings, Pricewaterhouse-Coopers underscored an overlooked caveat in its original report: “If other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated.”
The firm’s study projected 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.