The War Between The White House & The Health Insurance Industry
Monday, October 12, 2009SUSIE GHARIB: A public attack today on President Obama's health care reform plan by the nation's health insurance companies. Just one day before a key vote in the Senate, the insurance industry claims the sweeping overhaul will drastically raise premium prices for consumers. A new study commissioned by America's Health Insurance Plans, a lobby group, says the insurance premium for a family of four would be $1,700 a year more for coverage by the year 2013, much more than projected. By the year 2019, annual premiums would increase by $4,000 more. The White House blasted the report and Senator Max Baucus, chairman of the Senate Finance Committee which crafted the legislation, called it a hatchet job. Joining us now to talk more about that report and health care reform, Karen Ignagni, president and CEO of America's Health Insurance Plans. Miss Ignagni, welcome to NIGHTLY BUSINESS REPORT.
KAREN IGNAGNI, PRES. & CEO, AMERICA 'S HEALTH INSURANCE PLANS: Thank you very much Susie.
GHARIB: Well, you know, the health care reform debate as you know has been going on for months. Why did you wait until now to release these findings?
IGNAGNI: Well, there were new changes that were made just about two weeks ago or about a week ago in the Senate Finance Committee proposal that have made a major difference in whether or not it's workable and whether or not it is a affordable. And a number of policy leaders around the country have indicated what happened in the past in the states, that if we don't have everybody included in the pool, then what happens is that younger and healthier people are incentivized to leave the pool, forcing up in a dramatic way the cost for people who are sicker and older. So we want to avoid that. We're fully committed to insurance market reforms. We stand behind those, but we have said from the beginning the experience at the state level demonstrates that if you don't have the two together, everybody in with these market reforms, we're going to have serious unintended consequences. That's what Pricewaterhousecooper says.
GHARIB: All right. You are saying in your report that premiums would go up even faster than under the current system. Can you just give us a brief analysis of why that would be the case?
IGNAGNI: Well, you are doing several things in this legislation. One is that we're taking on the challenge of doing market reforms, comprehensively overhauling the way the insurance market works, which we need to do. We're committed to. Everyone will get coverage. Nobody will lose it. No discrimination for preexisting conditions. To get, to make that happen, to make that work we have to bring everyone in. In the Senate Finance Committee proposal, just over last week or so, there was a change that began to not have everybody participate. There would be a strong incentive for the young and healthier people as we have seen previously in the states to leave, therefore creating cost increases. In addition there are some financing mechanisms in the legislation because the Congress is not taking on bending the cost curve. That's been moved aside. They are really left with health care excise taxes, new taxes to actually try to finance the legislation which will only increase the cost of coverage as they have in the past in states that have moved in this direction. So what we are saying, we have remedies for each of these proposals and each of these issues that are challenges. And it can be addressed.
GHARIB: All right, now the Senate Finance Committee today had a conference call and they said no one is going to pay an excise tax on health costs, health programs and that everyone would have benefits below the threshold. Also consumer groups came out saying that over the last decade that premiums for employer-based insurance have gone up 93 percent over the last decade and with higher deductibles, higher co-pays and fewer benefits, so how do you respond to that?
IGNAGNI: I'm really glad you asked me that question. The reason the costs are up is because underlying health care costs are up. In our country, as most of your watchers know, that we pay 50 to 60 percent more for drugs, devices and every professional service than every other industrialized country. So that is why costs are going up. Congress is missing the opportunity and putting aside the goal of containing costs and what they are do is they are turning to other sales type taxes to actually fund health care reform.
GHARIB: Let me interrupt you because we just have 30 seconds left. What would you like to see happen at this point?
IGNAGNI: I think that it's very important for reform to pass, number one. Number two we have to get everybody in so that health insurance reforms will work so we don't repeat the mistakes of the past. And Congress ought to contain costs. They ought to challenge every stakeholder group to participate in that and actually bring costs down. If they don't, we will see the deleterious results and the forecasts that we are seeing today from Pricewaterhousecoopers.
GHARIB: We're going to have to unfortunately leave it there. Miss Ignagni thank you for come on the program to explain your point of view. We appreciate it. My guest tonight, Karen Ignagni, president and CEO of America's Health Insurance Plans.
