Health insurers and hospitals are concerned that the weaker mandate to buy insurance in the Senate Finance bill could result in fewer new customers, the Wall Street Journal reports. After initially embracing the Baucus proposal and agreeing to new regulations with “the expectation that millions of new customers would be brought into the health-care system,” the health industry is now arguing that the bill’s softer mandate penalties may lead to higher premiums and increased costs:
– Karen Ignagni, President and CEO of AHIP: “People will drop coverage and those who stay in would see rate shock,” Karen Ignagni, president of America’s Health Insurance Plans, the insurance industry trade group, said in an interview Monday.
– Alissa Fox, Lobbyist for Blue Cross/Blue Shied: “It might seem like they are solving the problem, but what happens is premiums for everyone are going to get more expensive in the new market.” “It only works when everyone is in the pool.”
Under the Senate Finance Committee’s bill, which leaves more than 25 million Americans without health care coverage, the maximum penalty for a family that does not purchase coverage “would start at $200 in 2014 and rise to $800 in 2017“; people who have to pay more than 8 percent of their adjusted gross income for the cheapest available insurance plan “would not be required to purchase it.” As Sens. Chuck Schumer (D-NY) and Olympia Snowe (R-ME) explained during mark-up, the government cannot not require Americans to purchase unaffordable or inadequate coverage. “We should make insurance more affordable by increasing the subsidies,” Schumer said. “That was not fiscally possible to stay within the constrains that we have in this committee. Hopefully we can move them, make them better as we move forward in the process.”
To be clear, the difficulty in expanding affordability measures transcends mere “fiscal” constraints. The health insurance industry’s millions of dollars and millions of lobbyists have convinced a large block of lawmakers to oppose a public option that could lower premiums by 10 percent, save the government some $150 billion over 10 years, and lower the cost of the overall bill (by reducing subsidies). Over the last decade, private insurers have stomped out any meaningful competition and have stopped negotiating with providers on behalf of their beneficiaries. They’ve monopolized the health care markets and allowed premiums to increase some 119% in the last ten years.
As Daily Kos’ mcjoan points out, “Insurance companies could maybe not pay their CEOs tens of millions of dollars every year and actually, maybe, put those combined millions and millions of dollars into, oh, I don’t, providing coverage? Or they could cut a lot of staff hours and have them work more efficiently by not having them spend all that time doing research to figure out how to deny claims.” The opportunities for introspection are endless. Unfortunately, from the insurers’ perspective, it’s far easier (and cheaper) to pressure the government to force Americans into private coverage than to sacrifice profits on behalf of affordability.