NU Online News Service, Oct. 12, 3:51 p.m.EDT

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WASHINGTON–An insurance trade group said a study showsnew taxes on health care providers proposed in a Senate health carereform bill would raise the cost of health insurance by 14 percentover the next five years.

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America's Health Insurance Plans said a study it commissioned byconsulting firm PricewaterhouseCoopers found the increase over thecosts in the current system would apply to individuals, familiesand businesses.

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AHIP is using the study as part of a new initiative to winchanges in the bill, America's Health Future Act. The industrygroup took aim at the measure as the Senate Finance Committeeprepared to vote on the legislation tomorrow.

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The measure would impose new taxes on health insurers,prescription drugs and medical devices in order to pay for coverageof the uninsured.

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Health insurance agents also attacked the bill.

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Joel Kopperud, director of government relations for the Councilof Insurance Agents and Brokers, said, "The taxes imposed oninsurance companies in the senate finance bill are certain to bepassed on to consumers."

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"They encourage employers to cut ancillary benefits to avoidcrossing the tax threshold, and even the Congressional BudgetOffice says that the proposed fees will result in higher premiums,"he added.

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But, in unveiling the study by PricewaterhouseCoopers, KarenIgnagni, AHIP president and CEO, said that despite the new analysisand advertisements AHIP launched over the weekend attacking thebill, it does not signal that the health insurers AHIP representsare walking away from the table.

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Ms. Ignagni indicated that she will suggest to the committeeways the bill can be amended to accomplish its goals withoutraising the cost of health care to individuals, families and smallbusinesses, as the report said it would.

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She explained that Congress must not abandon the original goalof health care reform legislation, which is bending the cost curve."The current legislation cannot fulfill the goal of reform," shesaid.

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The report said the current legislation would impose "insurancemarket reforms and consumer protection that would raise healthinsurance premiums for individuals and families if the reforms arenot coupled with effective coverage requirements."

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AHIP is using the study to argue that the Senate Finance billdoesn't expand the mandates on coverage, nor impose strong enoughpenalties for lack of coverage, as required to reduce overall costsfor everyone.

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Regarding taxes, the Senate bill would impose a tax on healthinsurers of $5.5 billion in 2010, increasing to $6.1 billion peryear in 2011, then hold steady at $6.1 billion per year. Thatprovision could raise about $60 billion over the 10-year periodanalyzed, according to an analysis by the Joint Committee onTaxation.

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She also cited cost-shifting as a result of cuts toMedicare.

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Unlike the proposals reflected in the Senate bill, controllingthe current 6 percent growth in health care costs will require"restructuring and realigning the incentives in the system," thereport said.

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The taxes Ms. Ignagni talked about do not include provisions inthe bill imposing taxes on so-called "Cadillac plans," Ms. Ignagnisaid during a conference call. But, the report AHIP commissionedsaid that the excise tax on Cadillac plans could, in a few years,"also raise premiums for some moderate value plans."

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The Cadillac tax provisions would impose a 40 percent excise taxon individual health coverage with a value greater than $8,000 andfamily coverage with a value greater than $21,000 starting in 2013.The excise tax revenue would start at $9.5 billion in 2013 andtotal $201 billion from 2013 to 2019, the JCT analystsestimate.

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According to the PwC study, the current Senate Finance bill, onaverage, will increase the cost of private health insurancecoverage by 26 percent between 2009 and 2013 under the currentsystem and by 40 percent during this same period if these fourprovisions are implemented.

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The study said it would raise costs by 50 percent between 2009and 2016 under the current system and by 73 percent during thissame period if these four provisions are implemented.

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It estimated costs would rise by 79 percent between 2009 and2019 under the current system and by 111 percent during this sameperiod if these four provisions are implemented.

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The report was heavily criticized by the American Association ofRetired Persons. "I really don't think it's worth the paper it'swritten on,If anyone believes it, that's a problem, " said JohnRother AARP executive vice president.

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Scott Mulhauser, a spokesman for Finance Committee Chairman MaxBaucus, D-Mont., called the report "a health insurance companyhatchet job, plain and simple,"

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