NU Online News Service, July 17, 2:50 p.m.EDT

WASHINGTON–The health insurance industry is voicing strongcriticism over a proposal by a group of Democratic senators toimpose $100 billion in taxes or fees on insurers to help defray thecost of health care reform.

The proposal was made by Sen. Charles Schumer, D-N.Y.; RobertMenendez, D-N.J.; and Debbie Stabenow, D-Mich.–all members of theSenate Finance Committee.

Sens. Kurt Conrad, D-N.D., and Olympia Snowe, R-Maine, alsomembers of the committee, said they would also support such a levy,although it remains unclear what form it would take.

It comes as the Finance panel continues its work to craft acompromise health care reform proposal that would win bipartisansupport.

Three House committees–the Ways and Means, Education and Labor,and Energy and Commerce committees–are also working to craft aHouse version of similar legislation.

The Senate Health, Education, Labor and Pension CommitteeWednesday completed work on its version of the legislation. Theplan is to mesh the HELP and Finance Committee bills, in hopes ofhaving the full Senate vote on its version of legislation by earlyAugust.

Speaking on behalf of the health care insurance industry,however, Robert Zirkelbach, director, strategic communications, forAmerica's Health Insurance Plans, and an official at CIGNA bothsaid the proposal is a bad idea.

Mr. Zirkelbach argued that the health insurance industry hasalready made significant concessions in an effort to support healthcare reform initiatives, and a new tax would be inappropriate.

Mr. Zirkelbach cited reforms the industry has embraced and saidit has "worked very hard to embrace the concerns of the Americanpeople."

He pointed out that the industry has proposed new market rulesand consumer protections "that would fundamentally reshape healthplan business practices."

Specifically, he said these proposals include guaranteedcoverage for pre-existing conditions, discontinuing rating based ona person's health status or gender, and a personal coveragerequirement to include everyone in the system.

Chris Curran, a spokesman for CIGNA, argued, "Isn't one of themajor points of this reform effort to make things less costly forconsumers? If you put a $100 billion tax on insurance companies, itwill ultimately get passed on to the consumer in the form of higherpremiums," he explained.

"Health plans are currently taxed at both the federal and statelevels including assessments that help fund high-risk pools in 30states," he added.

Mr. Curran observed that because families and small businessesare struggling during the economic downturn, "now is not the timeto impose new fees on health care coverage that will make thatcoverage less affordable."

Regarding the Schumer, Menendez, Stabenow proposal, he saidCongress "must rein in" insurers by tightening regulation andincreasing market competition. He said they justified a new tax bycontending that the health insurance industry has been "a big partof the problem" of high uninsured and high costs, and "now must bepart of the solution."

The senators also cited statistics which they argued showed thatsince 2001, health insurance profits have soared 418 percent andpremiums have doubled.

While the senators said they were not "drawing lines in thesand" over the design of the fee, they suggested that, depending onhow it was designed, the proposal could potentially raise $100billion.