Dust-up over healthcare reform ahead of Senate panel’s vote

October 12, 2009

The fragile consensus in favor of healthcare reform may be coming apart.

With the Senate Finance Committee due to vote on its reform bill Tuesday, the insurance industry’s trade group released an analysis saying the measure would drive up costs by thousands of dollars over the next decade.

The White House quickly fired back.

“This is a self-serving analysis from the insurance industry, one of the major opponents of health insurance reform,” spokesman Reid Cherlin said.SENATE/HEALTHCARE

“It comes on the eve of a vote that will reduce the industry’s profits. It is hard to take it seriously,” he said.

The analysis commissioned by America’s Health Insurance Plans says insurance premiums under the Finance Committee plan would rise even faster than if the United States did nothing to reform its $2.5 trillion healthcare system, the costliest in the world.

The report, produced by PricewaterhouseCoopers, said the average insurance premium for a family of four is $12,300 today and would rise to $21,900 by 2019 if nothing is done.

If measures in the Senate Finance Committee bill become law, the cost of premiums for the same family would rise to $25,900, the analysis says.

The reason for the higher costs is that the mandate for purchasing insurance is too weak and many young, healthy people will decide not to buy insurance, the analysis says.

Plus, the cost of the taxes on high-cost insurance plans and on some sectors of the health care industry would be passed directly on to the consumer, it says.

USA-HEALTHCARE“The overall impact of these provisions will be to increase the cost of private insurance coverage for individuals, families and businesses above what these costs would be in the absence of reform,” the analysis says.

A spokesman for Senate Finance Committee Chairman Max Baucus rejected the analysis, calling it “a health insurance company hatchet job, plain and simple.”

“This report is untrue, disingenuous and bought and paid for by the same health insurance companies that have been gouging too many consumers for too long,” said Baucus spokesman Scott Mulhauser.

Groups fighting for healthcare reform also reacted angrily.

“This is a transparent attempt by the health insurance industry to sabotage reform,” said Richard Kirsch of the Health Care for America Now.

“They’re out to protect their money and their power and they’ll go to any lengths — including circulating fake information — to stop real change,” he said.

But Senate Republican leader Mitch McConnell cautioned against rejecting the analysis out of hand.

“Higher premiums, higher taxes, and more government — that’s not reform,” he said, calling the plan a “$1 trillion experiment that cuts Medicare, raises taxes and premiums and threatens the healthcare options that millions of Americans enjoy.”

For more Reuters political news, click here.

Photo credit: Reuters/Jim Young (Max Baucus after a healthcare reform meeting Sept. 14); Reuters/Richard Clement (Baucus, Senator Jim Bunning discuss healthcare amendments Oct. 1)


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

Did not even bother reading the article. Single payer healthcare NOW. Premiums go down for everyone. Want to save money then cut out 10 billion dollars CIGNA profit. There I just saved the American healtcare 10 billion dollars.

Posted by Greg | Report as abusive

Greg the people who don,t pay any premiums their,s won,t be going down,and the young healthy Americans who are going to be forced to pay health insurance their premiums won,t be going down.The only item that will be going down is the senior health care when they remove 500 000 000 dollars funding.

Posted by brian lee | Report as abusive

Good reporting David. I hope all who read this article checks it very closely. Please be very skeptical of government involvement…in this very expense endeavor, READERS!

Posted by Ron | Report as abusive

Compromise doesn’t mean compromising the essence of policy, and all know it !!

1. As regards a Baucus scheme, the source of funding coming from a middle class is utterly against the commitment of Democratic party while it leaves 25 million Americans without health insurance (about one-third of whom would be unauthorized immigrants), far from providing universal access to coverage .

In response to the scheme, the letter from 154 House Democrats to Speaker Nancy Pelosi urges her “to reject proposals to enact an excise tax on high-cost insurance plans that could be potentially passed on to middle-class families.”

“This is not an obscure detail of health care reform,” said Connecticut Rep. Joe Courtney, who drafted the letter. “Taxing health benefits was explicitly debated in the campaign by presidential candidates and people running for Congress.”

Furthermore, looking closely at the new CBO report, it won’t be until “2014 or 2015″ that folks start seeing a serious reduction in the number of uninsured.

Worse still, the CBO estimates that “the failsafe provisions would require a reduction in exchange subsidies averaging about 15 percent during the years 2015 through 2018.” That’s a very bad thing, particularly in the first years of the plan. It means that, with no warning, subsidies will be cut by 15 percent, and insurance that families were able to afford the year before will become totally unaffordable.

2. No cost-competitive advantage of the insurer-friendly scheme does not clear the grave concern about the unsustainable growth in cost of overall health care program in the long run. Baucus scheme Doesn’t Bend Cost Curve Enough, Experts Say.

And the scheme proposes a “fake” alternative, nonprofit insurance cooperatives — and it places so many “restrictions” on these cooperatives that, according to the Congressional Budget Office, they “seem unlikely to establish a significant market presence in many areas of the country.”

Beyond, the bill would lock many workers into health plans selected by their employers, without allowing them to shop for better, cheaper plans, an alternative that could help drive down costs for everyone.

Those aren’t all, Senator Rockefeller is also upset that the scheme would even turn nearly a half-trillion dollars over to insurance companies, whose profits he says are “out of sight.”

3. Even with some benefit for primary practitioners and the increase in their figure, the baseless scheme does not come with fundamental payment reform, or a pay for value reimbursement formula. It means that the insurer-friendly scheme is not cleaning up the concerns over quality, regional imbalance issues and $9trillion of deficit over the next ten years.

((Here is some of CBO analysis : While the costs of the financial bailouts and economic stimulus bills are staggering, they are only a fraction of the coming costs from Social Security, Medicare, and Medicaid. Over the next decade, the Congressional Budget Office (CBO) projects that each year Medicaid will expand by 7 percent, Medicare by 6 percent, and Social Security by 5 percent. These programs face a 75-year shortfall of $43 trillion–60 times greater than the gross cost of the $700 billion TARP financial bailout)).

4. For Medicare & Medicaid system to survive from the most wasteful structure on earth, enough savings via fundamental changes need to be ensured, in return, the savings thereof suffice to meet the goal of well-planned public option.

((Even with far less visits to docs, which average a half or a third of them in any other free states, Americans pay roughly twice as much per person right now)).

5. For the record, prior to nation-wide deployment of reform, The State Of “Yes We Can”, Minnesota influenced by Mayo clinic spends “20 percent” less per patient than the national average and 31 percent less than in the highest cost state. It highlights that no substantial tax raise is needed at least for sure.

((The $583 billion of revenue package, and the astronomical savings of public option aside, “20%” of $923.5bn (the combined Medicare and Medicaid cost per year, as of July) represents around $184.7bn per year and 1.847trillion over the next decade, and this patient-centered value alone could be sufficient to meet the goal of public option)).

6. In principle, the long-awaited and most hopeful health care plan is to meet these criterias : Affordability, Quality, and A Check function against runaway premiums thereof.

Clearly enough, due largely to its lower overhead cost, purchasing power and fundamental payment reform, the well-planned public option would be doing more than the baseless scheme by THE INDUSTRY in these aforementioned aspects.

Now is the moment to open the page of contemporary energy and financial upgrades glossed over in 8 years.

Thank You !

Posted by hsr0601 | Report as abusive

This is just ridiculous. We have a so called health care debate but the only thing being debated is money. Not health care.

Are the folks on capitol hill so dense that they can’t separate something as fundamental as human health from money?

All arguments against a public option emphasize a loss of profit on the part of insurers. Can someone please explain why it is that the survival of the insurance business should be of any consequence when compared to issues of human pain and suffering?

As citizens we have already paid and continue to pay, for the gigantic mess left to us by profiteers. And now these same profiteers want us to disregard our own health and well being so that they can keep collecting profit at the expense of our loved ones and ourselves.

And far too many of us are stupid enough to believe this garbage. And that is the really sad part of it all.

Profit and interest have distorted the argument beyond reason. The problem we have is that far too many people who need access to health care are unable to gain access to that care.
But instead of addressing this problem in real terms the argument is revolving around who should get any profit and who should pay any interest. This is not the discussion to be having. Leave profit out of the picture. Leave interest out of the picture. Do this and the human issue can be handled easily.

Posted by Benny Acosta | Report as abusive

Whatever plan that is passed it will make a significant difference to the spending power of young Americans.Different nations like China and India have seen their economies grow and living standards improve,basically because USA had low taxation and the American consumer had considerable spare cash to buy what ever he fancied.Growing up in England i found after all the different tax deductions there was seldom money left to buy the range of goods that the American counterpart could afford.This austerity caused because of medical insurace deductions will prove highly unpopular among young folk and there will be a kick back at the politicans who imposed this garnishment,because there is nothing as unpopular as seeing vast amounts of money vanishing from your wages.

Posted by brian lee | Report as abusive

Will there be deductibles involved in a government single payer system?if not the hospitals will have to compete with the Malls as a venue for the inhabitable none working segment of our community to pass their time.

Posted by brian lee | Report as abusive