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.

Anthem Blue Cross and Blue Shield of Maine, the state’s largest private insurer, is suing the state after Maine’s Superintendent of Insurance denied Anthem a rate increase that would have required Maine residents to pay an “additional $12 million in annual premiums for the same level of benefits.” Under Anthem’s proposed increases, the average policyholder would have had to spend “more than $13,000 in premium and deductibles, prior to becoming eligible to receive any health benefits under the policy.”

After reviewing Anthem’s annual rate increases for policies sold within the individual health insurance market, Maine rejected the company’s proposed rate increase of 18.9%, but allowed the company to “break-even” in its individual market division and increase “rates by just 10.9%.” According to court documents obtained by the Wonk Room, Anthem, a subsidiary of Wellpoint Inc., argued that beyond simply ‘breaking-even’, the government must guarantee the company a 3% profit:

A 0% risk and profit charge, by definition, builds in no cushion for any of the risk that Anthem BCBS takes on by selling Individual Insurance Products in Maine. In addition, with a 0% risk and profit charge under the Superintendent’s approved rates, Anthem BCBS will not be able to provide any contribution to the surplus of the Company…Anthem BCBS — a for-profit Company — cannot be required to operate its highly risky Individual Insurance Products essentially as a non-profit company that must offset losses generated by the Individual Insurance Products through its group insurance business in Maine.

There is no requirement “that the Superintendent must affirmatively provide for a profit and risk margin in rates at all times and under all circumstances,” the state concluded in its brief. “Anthem repeatedly asserts throughout its brief, as if to make true, that for individual insurance rates to be ‘adequate’…they must cover all expenses incurred by the carrier … plus affirmatively provide for a reasonable rate of return that results in a contribution to the surplus of the Company.” “There is simply no requirement” that “the Superintendent must affirmatively provide for a profit and risk margin in rates at all times and under all circumstances.”

Indeed, considering the company’s financial strength and profitability, the “ample evidence” of “extreme financial hardship of subscribers,” and the company’s dominance of the market place (Anthem controls approximately 78% of the market in Maine), the state chose to shield its residents from subsidizing the insurers’ profits. After all, individual plans represent only “about 6.5%” of Anthem’s total revenue from all operations and “for the nine years that Anthem has been in operation in Maine, the pre-tax operating gain — or profit — from its individual line of insurance in the State totaled approximately $17.4 million.” For the year that ended December 31, 2007, Anthem’s total revenue from all operations for the year, “was over $1 billion, and its net income…was over $100 million.”

In its brief, Anthem argued that the Superintendent’s “reliance on the comments of policyholders is improper.” “None of the witnesses who made sworn or unsworn statements professed to have an actuarial background and/or familiarity with the financial and actuarial analysis reflected in Anthem’s BCBS’s rate filing to determine whether the rates were designed to cover the costs of the products plus allow for a reasonable rate of return,” the company concluded.

Read the briefs here and here.

This morning, Rep. Anthony Weiner (D-NY) and health care provocateur Betsy McCaughey took their health care debate to Dylan Ratigan’s ‘Morning Meeting.’ In a heated exchange that lasted almost 15 minutes, the two sparred over Medicare cuts, the public option, and health care spending. Weiner insisted that a robust public plan could restore competition to concentrated health care markets and reduce health care costs by an estimated $150 billion. McCaughey, the architect of the false “death panels” myth, continued her scare-mongering campaign against seniors: “The elephant in the room here is that all these bills are devastating care for seniors and the Baucus bill is the deadliest of all!”

Throughout the interview, McCaughey verbally attacked Ratigan and Weiner, complaining that she was being shut out of the debate. “Anthony, you are ignorant about health insurance,” she said, before insisting that “this will go down in history as one of the most browbeating interviews in television history.” “I hope that it does,” Ratigan replied. “And maybe you’ll learn at that point then to answer questions as opposed to go on television and cast accusations.” Watch a compilation:

After repeatedly refusing to explain how she would reduce health care spending, McCaughey proposed “inching up the eligibility age [for Medicare] one month a year until 2043 when the eligibility age reaches 70.” That could “put Medicare on a firm footing without cutting care for Medicare recipients.”

“That was a solid answer to your question,” Weiner exclaimed facetiously. “Take away 100% of Medicare for people 65 to 70.” According to the Congressional Budget Office, which McCaughey credited with the idea, eliminating “younger beneficiaries” from the Medicare program would do little to control costs. “Outlays for Medicare would [still] rise to 7.7 percent of GDP by 2050,” the CBO concluded.

Weiner pounced on McCaughey’s solution, which could cut as many as 11.3 million seniors from Medicare. “You want to gut Medicare,” Weiner told McCaughey. “That is exactly right. Now, I’m the one you’re accused of scaring seniors? You just said on this show you wanted to cut Medicare for everyone 65 to 70, isn’t that right?” “I will get it at 70 under the CBO proposal…and you will too.”

Gov. Bobby Jindal (R-LA) reprised his uncanny talent for the clunky retort yesterday and declared that the health care debate was “over.” “Believe the polls, the town halls, the voters,” Jindal wrote in an editorial in the Washington Post. Americans don’t want a ‘government takeover of health care’ — his term for the Democratic plan to give Americans the choice of public option, which 77 percent of Americans supported in August. “The people do not want Republicans to offer their own thousand-page plan to overhaul health care” either. “[A]nd that is not what the nation needs.” It’s Jindal’s “10 ideas to increase the affordability and quality of health care” that “the people” desire.

But Max Baucus has beat Jindal to the punch. As Professor Timothy Stoltzfus Jost points out, many of these are already part of the Senate Finance Committee’s reform bill, which Jindal mistook for “$900 billion in new spending”:

First he calls for purchasing pools to allow individuals and small businesses to get better deals on health insurance—that is precisely what the exchanges are, which have been in the bill since the beginning. Second, portability. Allowing individuals and small groups to purchase through the exchanges with affordability subsidies allows people to continue to be insured when the leave their jobs without undermining our employment-based insurance system. Requiring coverage for pre-existing conditions? Has Jindal read any of the legislation, or listened to the news about it for the past 6 months?

Jindal insists that after nine months of bipartisan negotiations in the Senate Finance Committee, six of which included very intense and serious talks within the bipartisan Gang of Six, Democrats must “get serious about bipartisan solutions.” “Republicans have to join the battle of ideas.”

But Republicans have long moved the goal posts on reform. Despite Baucus’ many concessions, the Republican party still insists that his budget-neutral proposal “simply leads to more government, more spending and more taxes” and “spends too much.”

Jindal wrote that the health care reform was “over,” but for many Republicans, it never really began.