Private Insurers Protest against Government-Run Insurance Plan

As House Democrats presented their health care legislation than the insurance industry gave it a thumbs-down.

Karen Ignagni, president and chief executive of America’s Health Insurance Plans, which represents many of the nation’s insurance companies, warned in a statement issued on Thursday that the House bill would increase costs for consumers and employers and disrupt the current health care system.

She also painted a dire picture of the consequences of a government-run insurance plan, or public option, which is designed to compete with private insurers. She said it would “bankrupt hospitals, dismantle employer coverage, exacerbate cost-shifting from Medicare and Medicaid, and ultimately increase the federal deficit,” The New York Times reports.

Reuters quoted John M. Berry, a guest columnist for the Washington Post, as saying, "Health insurance companies are aggressively raising premiums at the same time they are fighting to stop the creation of public non-profit funds that would give them serious competition.

This foolish effort to pad profits before any healthcare overhaul gets passed ought to backfire. The so-called public option was already gathering support despite claims by conservatives that it would lead to a government takeover of health care.

Small businesses face an average premium increase of 15 percent for 2010, according to The New York Times. Separately, the Centers for Medicare & Medicaid Services, which run Medicare, said that premiums for Medicare Advantage plans -- those are private plans for people also enrolled in regular Medicare -- are going up 25 percent.

With costs rising like this, it is remarkable how many supporters the insurers have in Congress. Even the best of the companies are a pain to deal with," Reuters reports.

It was also reported, Thursday, House Democrats unveiled their version of health care reform, combining several competing bills into one massive piece of legislation that the full House could vote on as early as next week.

With a price tag of $894 billion over 10 years, it's designed to expand coverage to an additional 36 million people. The bill includes a government-run insurance option for the uninsured, an "exchange" designed to make shopping for a health plan easier, an expansion of Medicaid an end to insurance companies' exemption from anti-trust laws and an employer mandate for businesses with payrolls of more than $500,000.

Speaking to small business owners Thursday, President Obama said that he wants to make clear that "if you're happy with the insurance plan you have right now … Nobody will make you change it."

Private insurers say that's a promise that the president can't keep, Forbes reports.

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