Health Insurers Extend Olive Branch To Sen. Dem. Leaders

NU Online News Service, Oct. 16, 2009, 4:05 p.m. EST

Officials of America's Health Insurance Plan are apparently extending an olive branch to Senate Democratic leaders in an effort to re-open talks aimed at reshaping the health care reform legislation passed by a Senate panel earlier this week.

At the same time, AHIP released a new study which it says is "consistent" with a controversial study released Sunday, which it commissioned. The new study said the current versions of health care reform legislation will raise the cost of health care insurance for most American families. The study does not, however, include the impact of medical inflation.

The earlier study, by PricewaterhouseCoopers, said the version of health care reform legislation reported out by the Senate Finance Committee on Tuesday would raise the cost of health care insurance for some Americans by an additional 14 percent over the next five years compared to the current system.

That study was condemned by the White House and Democrats in both the House and Senate.

For example, the White House said in a blog, "This is a self-serving analysis from the insurance industry, one of the major opponents of health insurance reform."

The statement noted, "Even the company hired to produce the report has issued a statement saying they produced a skewed report that analyzes only part of the bill because that is what the insurance industry paid them to do."

The latest report by Oliver Wyman Associates was released Thursday by AHIP. It said current proposals will increase the cost of health care coverage for families and small businesses above what they would be under current law.

The Oliver Wyman study also projects a 19 percent increase in individual market premiums, with AHIP noting that the PwC study found a 28 percent increase, although AHIP said the PwC report analyzed additional factors not considered in the Oliver Wyman report.

But in the letter to the Senate Democratic leadership, Karen Ignagni, president and CEO of AHIP, said she was seeking to "reaffirm our commitment to working with you to achieve the enactment of bipartisan reform legislation this year."

The letter was sent to Sen. Harry Reid, D-Nev., Senate majority leader; Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee; and Sen. Tom Harkin, D-Iowa, chairman of the Senate Health, Education, Labor and Pension Committee.

Ms. Ignagni made her comments against the background of efforts by the Senate Democratic leadership to meld the Senate Finance measure, passed by the panel Tuesday, with legislation passed in July by the HELP Committee.

The combined bill will then be sent to the Senate floor for debate, hopefully by the end of next week.

The objective of such legislation, she said, "is to cover all Americans, improve quality, and put the health care system on an affordable basis."

Ms. Ignagni also said in the letter: "Our community recognizes that we have a responsibility to play a leadership role in identifying strategies that will allow Congress to pass health care reform legislation that will work and that can be sustained."

The study recognizes that those drafting health care reform legislation face the politically difficult problem of mandating penalties for not getting health insurance, because having as many people pay for health insurance as possible is one key to reducing health insurance premiums.

The letter offers alternatives to the current decision by bill drafters by significantly reducing proposed penalties for not getting health insurance in order to ensure public support.

The letter suggests alternatives to the current mild penalties for not having coverage, such as the late enrollment penalties similar to those currently under the Medicare Part B and Part D programs, coupled with the loss of tax benefits–such as the removal of the personal tax exemption–for those who do not comply with the personal coverage requirement.
These may "offer a fresh approach," Ms. Ignagni said.

"By pursuing a package of strategies to boost enrollment during the transition, we can ensure that premiums are lower and build a stable and sustainable system with lower costs over the long-term budget window," she said.