Tuesday, October 13, 2009

Insurers to Senate: Health Legislation would add $1,700 a year to families

Late Sunday, the industry trade group America's Health Insurance Plans sent its member companies a new accounting firm study that projects the legislation would add $1,700 a year to the cost of family coverage in 2013, when most of the major provisions in the bill would be in effect.



Study: Premium increase
Premiums for a single person would go up by $600 more than would be the case without the legislation, the PriceWaterhouseCoopers analysis concluded. The study was commissioned by the insurance group.


"Several major provisions in the current legislative proposal will cause health care costs to increase far faster and higher than they would under the current system," Karen Ignagni, the top industry lobbyist in Washington, wrote in a memo to insurance company CEOs.


Baucus spokesman Mulhauser said the study is "seriously flawed" because it doesn't take into account provisions in the legislation that would lower the cost of coverage, such as tax credits to help people buy private insurance, protections for current policies and administrative savings from a revamped marketplace.


White House health care spokeswoman Linda Douglass concurred. "This is an insurance industry analysis that is designed to reach a conclusion which benefits the industry, and does not represent what the bill does," she said.


The Baucus plan faces a final vote in the Senate Finance Committee on Tuesday. It got a boost last week after the Congressional Budget Office estimated it would cover 94 percent of eligible Americans while reducing the federal deficit.



Costs for privately insured
But the PriceWaterhouseCoopers analysis attempted to get at a different issue — costs for privately insured individuals.


It concluded that a combination of factors in the bill — and decisions by lawmakers as they amended it — would raise costs.


The chief reason, said the report, is a decision by lawmakers to weaken proposed penalties for failing to get health insurance. The bill would require insurers to take all applicants, doing away with denials for pre-existing health problems. In return, all Americans would be required to carry coverage, either through an employer or a government program, or by buying it themselves.


But the CBO estimated that even with new federal subsidies, some 17 million Americans would still be unable to afford health insurance. Faced with that affordability problem, senators opted to ease the fines for going without coverage from the levels Baucus originally proposed. The industry says that will only let people postpone getting coverage until they get sick.

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