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October 12, 2009

The Empire Strikes Back. Health Insurance Industry Group Attacks Baucus Bill

The thing about health care reform is a lot of people like the concept, in theory. Once you start discussing specifics people and groups who agreed on the general idea are suddenly at each other's throats.

To date, the White House and congressional leaders have kept insurers on board or at least at the proverbial table. After studying the Baucus plan, they just jumped off the bandwagon.

After months of collaboration on President Obama's attempt to overhaul the nation's health-care system, the insurance industry plans to strike out against the effort on Monday with a report warning that the typical family premium in 2019 could cost $4,000 more than projected.

..."The report makes clear that several major provisions in the current legislative proposal will cause health care costs to increase far faster and higher than they would under the current system," Karen Ignagni, AHIP's president and chief executive, 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."

Naturally the White House is saying that this is a political move by an industry they are trying to reform. That's fair to a point, health insurers are obviously an interested party but if they were on board with ObamaCare you can bet the White House would be singing their praises.

Basically insurers are saying you can't increase coverage and eliminate limits on pre-existing conditions unless you force young, healthy people into the system. The industry wants to see a stronger personal mandate and higher fines (taxes) on people who don't buy a policy than in the current Senate Finance bill.

Adding more high cost people to the rolls and not forcing enough healthy or low cost people means someone has to pay the difference...people who already have coverage.

Linda Douglas can complain about the insurance industry's motivations but that's also Obama's logic for creating his health exchanges. Add that bit of obvious economics to all the fees and taxes hidden in the Baucus bill and yeah, it's going to add costs. That's before all the pretend Medicare cuts fail to materialize as well.

The White House will be happy to have a chance to attack the insurance industry full on (not that they haven't been attacking them to some degree) but any fracture in the coalition supporting reform is a good thing. ObamaCare, whatever final form it takes, will not be killed by a magic bullet but by a thousand cuts.


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posted by DrewM. at 12:43 PM

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