White House Hits Health Insurers Ahead of Key Vote

by VR Sreeraman on October 13, 2009 at 12:30 PM

 White House Hits Health Insurers Ahead of Key Vote
The White House and allies in Congress punched back hard Monday after the insurance lobby fired off a surprise offensive at a pivotal moment of President Barack Obama's health reform drive.

Democrats dismissed an industry report which warned the reform bid would send costs soaring as a "hatchet job," a day before the Senate Finance committee was expected to vote largely on party lines to back a reform bill.

A study by auditors PricewaterhouseCoopers (PWC) for the insurance lobby warned that the bill before the committee would hike projected cost increases per family by 1,700 dollars in four years, and by 4,000 dollars in the next decade.

The America's Health Insurance Plans (AHIP) lobby group, which commissioned the report, argued that new taxes on health insurance plans, medical device manufacturers and pharmaceutical giants would pass on extra costs to consumers.

The report marked a change of tactics: the industry, blamed for killing a health reform effort by then president Bill Clinton in the 1990s, had previously worked to influence this bill in talks with the Obama White House and in Congress.

The White House, which has waged a months-long campaign against conservative critics of its attempt to cut health care costs and to make treatment affordable to all Americans, quickly dismissed the credibility of the report.

"This is a self-serving analysis from the insurance industry, one of the major opponents of health insurance reform," said Reid Cherlin, a White House spokesman.

"It comes on the eve of a vote that will reduce the industry's profits. It is hard to take it seriously.

"The analysis completely ignores critical policies that will lower costs for those that have insurance, expand coverage and provide affordable health insurance options to millions of Americans who are priced out of today's health insurance market or are locked out by unfair insurance company practices."

Scott Mulhauser, a spokesman for Finance Committee Democrats, meanwhile said the health insurance lobby was resorting to a "tired playbook of deception" to thwart the health reform drive.

"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 as they stand in the way of reform yet again," Mulhauser said.

"It?s a health insurance company hatchet job, plain and simple."

Bill supporters said the PWC study was a partial analysis and did not take into account how specific reforms would bring down the cost of coverage.

Obama has wagered huge political capital on the fight to pass health reform, and to offer affordable care to 46 million people in the United States who have no insurance.

Should the initiative pass, in a form reconcilable with the president's campaign promises, Obama may be able to tap into a new well of political credibility and a claim to historic domestic reform.

But should the effort unexpectedly fail, despite Democratic majorities in Congress, Obama could find his political leverage and capacity to enact other elements of his sweeping agenda severely hampered.

One Senate Democratic aide predicted the insurance company report would backfire, mobilize health care supporters in Congress and add momentum to the drive to pass health care reform.

The Senate Finance Committee was set to vote on Tuesday on its 829 billion dollar version of health care reform -- one of several approaches to the issue awaiting action in the full House of Representatives and the Senate.

Last week, the non-partisan Congressional Budget Office (CBO) boosted the cause of health reform advocates, saying the draft Finance Committee effort would cut the US budget deficit by 81 billion dollars over 10 years.

Some Democrats, especially in the House, have still not given up the fight for a "public option" -- a government-run component to compete with private health plans to bring down costs -- to be included in the final draft law.

But the idea reportedly has little chance of passing the Senate, and is not included in the Finance Committee bill.

Republicans, who spent the summer fanning a furious wave of attacks on the plan, hammered the "public option" as an attempt by the Obama administration to create a state-run health care system to stealth.

Source: AFP

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