Almost on the eve of voting on the Baucus bill, the White House has lost a powerful ally: the insurance companies. The Pittsburgh Post-Gazette reports:
After months of collaboration on President Barack Obama’s attempt to overhaul the nation’s health care system, the insurance industry plans to strike out today against the effort with a report warning that the typical family premium could rise over the next decade by $4,000 more than projected.
The critique, coming one day before a critical Senate committee vote on the legislation, sparked a sharp response from the Obama administration. It also signaled an end to the fragile detente between two central players in this year’s health-reform drama.
Industry officials said they intend to circulate the report prepared by PriceWaterhouseCoopers on Capitol Hill and promote it in new advertisements. That could complicate Democratic hopes for action on the legislation this week.
Cost to average family: $20,700 over a decade.
Administration official Nancy-Ann DeParle, who as director of the White House Office of Health Reform spent the summer courting the insurers, had a pretty weak response: “Those guys specialize in tax shelters. Clearly this is not their area of expertise.”
Faced with the perfidious insurers, the Senate Finance Committee has put out rebuttal points. Here is one: “The majority of people obtaining insurance (85 percent) would be eligible for subsidies, so they would not feel any premium increase.”
Finders fee to Tevi Troy, who comments:
Note that the rebuttal point doesn’t deny that there would be increases, only that 85 percent of folks getting insurance would not feel any increases, because they would get taxpayer subsidies. There are two main problems with this. First, somebody is paying for those subsidies, namely the American taxpayer, so I suspect we would all feel it if costs increased as much as the PWC study indicates. Second, trying to prevent people from feeling actual health-cost increases is one of the reasons that American health-care costs so much in the first place. The huge increase in third party payment over the last four decades, from both government and private insurers, has coincided with a quadrupling of health-care costs, and the proposed mandate plus subsidy approach will only add to that numbness.
The Obama administration had better hurry up! Every day Democratic proposals look worse than the day before.