Yesterday, Rep. Eric Cantor (R-VA) responded to White House requests for the GOP to post a comprehensive health care bill online by explaining that Republicans had already offered and voted on a comprehensive alternative on the House floor. “Our House bill has been scored by the CBO and will bring down insurance premiums. That’s what the American people want right now while we’re in economic times of unprecedented unemployment,” he said. Calling the GOP bill “a better way,” Cantor characterized the President’s bill “is a nonstarter” that “the American people have resoundingly rejected.”

Republicans have yet to coalesce around a single health care proposal or commit to offering a viable alternative at tomorrow’s bipartisan health care summit. But since the GOP is demanding that Democrats scrap their proposal and adopt the GOP’s solutions, comparing the two bills may be instructive. As it turns out, the GOP alternative would do little to lower health care spending or expand access to affordable coverage:

	President’s Bill	GOP’s House Plan
Insured	30 million	3 million
Cost of Bill	$950B/10yrs	$61B/10yrs
Access	Healthier uninsured will be guaranteed coverage from a regulated exchange. Sicker uninsured will be guaranteed coverage from a regulated exchange. Lower-income Americans can enroll in their state’s Medicaid program. Americans with employer-based coverage will keep the coverage they now have.	Healthier uninsured could find affordable coverage in the individual market. Sicker uninsured will be denied individual coverage. Could find coverage in high risk pools but that’s often inadequate. Lower-income Americans who aren’t offered affordable coverage will be uninsured or underinsured. Americans with employer-based coverage will keep the coverage they now have.
Regulations	Insurers can’t deny coverage because of pre-existing conditions or rescind coverage. Insurers can’t apply lifetime or annual limits to coverage. Insurers will have to offer comprehensive benefit packages that provide adequate coverage to sicker Americans.	Insurers can deny coverage because of preexisting conditions but they won’t be able to rescind coverage. Insurers can’t impose “arbitrary” lifetime limits and annual limits on coverage. Insurers don’t have to offer comprehensive benefit packages that provide adequate coverage to sicker Americans.
Premiums	CBO concluded that most Americans would pay less or the same for insurance. The majority of Americans who purchase coverage through the exchanges would pay premiums that are “56 percent to 59 percent lower, on average than the nongroup premiums charged under current law.”* Families purchasing coverage in the small business market could save up to $100 annually.* Families purchasing coverage in the large-group market could save up to $200 annually.*	CBO concluded that healthier Americans would pay less for insurance. CBO concluded that the bill would slightly reduce premiums for healthier Americans who purchase coverage in the individual or small group market but “would tend to increase the premiums paid by less healthy enrollees.”
Medicare	The bill eliminates some waste and fraud in the Medicare system. The bill gets rid of the special subsidy to private insurers participating in Medicare Advantage. The bill extends the life of the Medicare trust fund by 9 years.* Closes the doughnut hole that affected 3.4 million seniors enrolled in Medicare Part D in 2008.	The bill eliminates some waste and fraud in the Medicare system. The bill gets rid of the special subsidy to private insurers participating in Medicare Advantage. The bill extends the life of the Medicare trust fund by 0 years. Keeps the doughnut hole open.
Small Businesses	Small employers can take advantage of large risk pools by purchasing coverage through the bill’s state-based exchanges. Small employers would receive a tax credit to help them provide coverage to their employees.	Small employers can come together and purchase coverage in associations. Association health care plans have sole discretion in selecting specific items and services that can be included as benefits. Not required to provide a standard package of benefits. Can craft skimpy policies that attract healthier applicants. Small employers would not receive a tax credit to help them provide coverage to their employees.
Expenditures	The most conservative government estimates conclude that the bill would reduce national health care expenditures by at least 0.3% by 2019.*	Does not reduce national health spending. Establishes state innovation program grants to reward states for lowering the cost of their premiums.

*Using CBO estimates for Senate health care bill.

Today, during a hearing before the House Energy and Commerce Health Subcommittee, Reps. Bart Stupak (D-MI) and Henry Waxman (D-CA) questioned WellPoint CEO Angela Braly about the company’s proposed rate increases in California’s individual health insurance market. The congressmen read from a series of inter-company emails which revealed that WellPoint was rising premiums to increase its profits and padding proposed increases to allow room for negotiations with regulators:

- “The average increase is 23 percent and is intended to return California to a target profits of 7 percent, versus 5 percent this year.” [WellPoint email, October 7, 2009]

- “We’re asking for premiums that would put us $40 million favorable…if we get the increases on time, we will see an opt gain upside of $30 million downgrades and rate cap.” [WellPoint email, November 2, 2009]

- “[W]e needed to reach agreement on filing strategy quickly — specifically in the area of do we file wth a cushion allowed for negotiations.” [WellPoint email, 10/24/2009]

Watch a compilation:

Waxman also unveiled a slide shown at a meeting of the companies’ shareholders which showed that the company had asked for a rate increase of 25 to 26% in 2010 “but the assumed rate increase is just 20%.” This seems to say that you’re asking for a 25% percent increase but expected to see that lowered to 20% through negotiations.” “You are raising your rates far above what’s necessary. You’re trying to squeeze every dollar of profit you can out of policy holders in California and across the nation at a time when families are struggling to pay their bills, you’re trying to charge them inflated rates that pad your profits and support the salaries and the trips and the retreats and everything else,” Waxman said.

WellPoint admitted that it set its increases to keep up with medical costs and maintain a 2% profit. The company justified the increases in California by arguing that it was making up for lost profits in the individual market– a point somewhat belied by the fact that WellPoint has also increased premiums in at least 11 other states. “We are talking about profit increases in absolute dollars but again, when you look at the profit margin that is build into the rates for 2010 it’s less than a 22% profit margin,” chief Corporate Actuary Cindy Miller explained. “A 25% rate increase became necessary…to achieve a profit margin of less than 2% on an after tax basis.”

“$2.8 billion that was your profit in 2009, which is a year that everyone would consider was a horrible year economically in this country…what I’m concerned about is that our hard working Americans are asking to increase their premiums to the wealth of WellPoint’s investors,” Stupak observed. “I don’t mind you making a profit but at the end of the year, 2009 a horrible year, you still made 2 point something billion dollars, and that’s not enough,” Stupak asked, noting that WellPoint’s high profit margin is the reason “many of us believe in a public option.”

Roll Call and the Washington Post are reporting that Republicans are planning to present a “united front” at tomorrow’s bipartisan health care summit, settling on a two-prong strategy designed to avoid the embarrassment of the Republican retreat. “Republicans are preparing to use Thursday’s White House health-care summit to sell their own ideas for using the private marketplace to expand coverage and reduce costs,” the Washington post reports. “The Republican summit strategy is twofold: to portray the Obama plan as radical and ruinously expensive, while reassuring a potential television audience of millions that the GOP takes the health-care crisis seriously and is prepared to address it head on.” Put simply, the Republicans will say that the health care bill will eat your first born, but their incremental solutions will cause gold to fall from the skies.

Considering this strategy, many are predicting that the summit will turn into a very long photo opportunity, but lawmakers do have an opportunity to reach a consensus on some provisions. The Senate health care bill — which is the basis for President Obama’s proposal — already includes numerous Republican ideas and if the GOP was truly interested in passing legislation they could find ways to improve the existing provisions.

Here are 5 areas where Democrats and Republicans can reach bipartisan agreement:

1. Tort reform: While the Senate bill authorizes demonstration projects, Republicans continue to insist that caps are the only way to eliminate junk lawsuits. But given Obama’s openness to adopting more malpractice reforms, lawmakers can explore other solutions like ‘Sorry-Works’ programs or special health care courts.

2. Selling policies across state lines: Under the existing legislation, states can form compacts within which insures then sell their policies across state lines. The Democrats plan establishes a floor of regulation that prohibits insurers from selling insurance from the least regulated location (i.e. like the Northern Mariana Islands in the Republican proposal) and cherry pick the healthiest individuals. Both parties can find a way to tweak the compact provision (maybe change the way the ‘primary state’ is established) and form a consensus.

3. Small business tax credits: The Senate bill and the President’s proposal offer tax credits to small businesses that continue to offer health care coverage. Since Republicans consistantly claim that they stand behind ‘the engines of our economy,’ they can certainly find a compromise. The bill already exempts small businesses from the mandate but lawmakers can expand small business participation in the exchange or allow small business tax credits for those purchasing insurance outside the state insurance exchange. (Republicans proposed both of these ideas as amendments to the Senate Finance Committee’s health bill.)

4. Wellness and prevention provisions: Republicans have long advocated job-wellness programs that give employers greater flexibility to financially reward employees who seek to achieve or maintain good health and the Senate bill already includes these provisions. But if necessary, lawmakers can increase the premium discount that employers can use to reward employees for participating in wellness programs. (The House bill allows employers to offer higher discounts.)

5. Delivery system reforms: Both parties agree that the current fee-for-service reimbursement system encourages quantity, not quality care. The Senate bill already includes reforms like bundled payments and accountable care organizations, but lawmakers can work to expand and strengthen those demonstration projects.

If Democrats move to pass health care reform after tomorrow’s summit, their newfound momentum can be at least partly attributed to WellPoint’s decision to drastically increase premiums in California’s individual health insurance market. The rate increases highlighted the broken health care system and pressured lawmakers to drastically reform the individual health insurance market. The administration’s strong response also enunciated the differences in lawmakers’ approach to reform and may have pushed the President to add stronger cost control provisions into his health care blue-print.

WellPoint’s hikes created a political opportunity for reform, but California policy holders aren’t the only ones experiencing drastic rate increases. A new survey from the Center for American Progress Action Fund has found that “double-digit hikes have been implemented or are pending in at least 11 other states among the 14 where WellPoint’s Blue Cross Blue Shield companies are active: California, Colorado, Connecticut, Georgia, Indiana, Maine, Nevada, New Hampshire, New York, Virginia, and Wisconsin.” Below is a sample:

- California: Average rates are expected to increase 25 percent in 2010, with increases as high as 39 percent for some policyholders.

- Colorado: Average rates are expected to increase 19.9 percent in 2010, with increases of up to 24.5 percent for some policyholders.

- Indiana: Rates are expected to increase 21 percent in 2010.

- Maine: Anthem Blue Cross and Blue Shield requested a 23 percent increase for 2010 after five straight years of double-digit increases for individual policyholders. Anthem is suing the Maine Insurance Commissioner for rejecting its request last year for an 18.5 percent rate hike and allowing a 10.9 percent increase.

- Ohio: Average individual rates are expected to decline 40 percent in 2010 due to a new state law that went into effect in 2010.

Hikes are the kind of thing that bring lofty political rhetoric about the need for reform into reality for millions of Americans. More importantly, they could convince those who already have coverage to pressure their lawmakers on reform. This morning, House members will have an opportunity to question WellPoint CEO Angela Braly about the rate hikes when she appears before the Energy and Commerce Committee. But let’s hope they use this report to do more than just talk.