Health Reform to Have Impact on Private Health Insurance

According to the new report from America's Health Insurance Plans, the bill pending before the Senate Finance Committee will cause health care costs to rise higher and faster than under the existing system.

Photo: Health Reform to Have Impact on Private Health Insurance

The report from PricewaterhouseCoopers states that "the proposal 'will increase premiums above what they would increase under the current system for both individual and family coverage in all four market segments from 2010-2019,'" said a memo from Karen Ignagni, president and CEO of AHIP.

The White House, which had been working with the insurance industry, blasted the report and its timing.

"This is a self-serving analysis from the insurance industry," said White House spokesman Reid Cherlin. "It comes on the eve of a vote that will reduce the industry's profits," USA Today reports.

In the meantime, a top goal of Obama in seeking to revamp healthcare is to rein in costs that have soared in recent decades. The report, prepared by consultants PricewaterhouseCoopers and posted on the industry group's website over the weekend, said costs would increase for Americans rather than decline.

"Health reform could have a significant impact on the cost of private health insurance coverage," the report concluded.

The Obama White House had sought to work with the industry but the report was a clear indication that this strategy was no longer operative.

The release of the report comes as the Senate Finance Committee plans to vote Tuesday on its healthcare plan after budget analysts gave the bill a rosy report card, estimating it would meet Obama's goal of reducing the budget deficit over 10 years, Reuters reports.

It was also reported, Obama had courted industry leaders in the hopes of neutralizing many of the players who helped defeat a similar effort by President Clinton. Yet as the process has moved from abstract concepts to legislative details, the tension has mounted. Hospitals and doctors have increasingly complained that the administration is not keeping bargains it struck over how many Americans would be covered by an overhaul and what payment changes would be made.

"The report makes clear that several major provisions in the current legislative proposal will cause healthcare costs to increase far faster and higher than they would under the current system," Karen Ignagni, chief executive of America's Health Insurance Plans, 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."

At the heart of the argument is whether the finance committee bill does enough to draw young, healthy people into the insurance pool. Industry analysts predict that by postponing and reducing penalties on those who fail to buy health insurance, it would attract less-healthy patients who would drive up costs, The Los Angeles Times reports.