Insurers escalate criticism of health overhaul

The insurance industry sharply escalated its criticism of the Senate health care bill Sunday, charging that the legislation
would shift costs to privately insured people, raising the price of a typical policy by hundreds — if not thousands
— of dollars annually.

A spokesman for Sen. Max Baucus, D-Mont., whose 10-year, $829 billion overhaul plan
faces a final committee vote Tuesday, questioned the credibility of the late-innings cost estimate. "It’s a health insurance
company hatchet job, plain and simple," said Scott Mulhauser.

Until recently, the health insurance industry
has been working behind the scenes to shape legislation, while publicly endorsing President Barack Obama’s goal of affordable
coverage for all Americans. The fragile alliance is growing strained as legislation advances toward floor votes in the House
and Senate.

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. Angela Braly, CEO of Indianapolis-based health insurance giant
WellPoint Inc., is on the board of directors of AHIP.

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.

The study projected that in 2019, family premiums could
be $4,000 higher and individual premiums could be $1,500 higher.

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.

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.

Other factors leading to higher costs
include a new tax on high-cost health insurance plans, cuts in Medicare payments to hospitals and doctors, and a series of
new taxes on insurers and other health care industries, the report said.

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

Insurers played a major role in defeating
then-President Bill Clinton’s health care plan in the 1990s. Sunday, the industry stopped short of signaling all-out opposition.
"We will continue to work with policymakers in support of workable bipartisan reform," Ignagni said in her memo.