Insurers, other health businesses examine effect of reform bills

Oct 19 2009

Health care industry CEOs are analyzing their wins and losses in the bills being considered in Congress.

"The drug industry stands to gain in a health-care overhaul by getting tens of millions of newly insured customers, while insurance companies -- especially those that cater to the individual market -- look like they are in for a tougher time," The Wall Street Journal reports. Drug makers, pharmacies and hospitals all stand to benefit from the new customers because "[a]ll of them sometimes have to give away their services -- or lose business altogether -- because their customers don't have a way to pay under the current system. Insurance companies would get more customers, too, but not necessarily the ones they want. The Finance bill bars insurers from rejecting people because of pre-existing illness. And the committee weakened the requirement that all Americans carry coverage. Insurers also face the heaviest new taxes under the bill" (Adamy and Hitt, 10/19).

"The insurance industry and the Obama administration are increasingly at odds over key provisions in the [Finance] bill," USA Today reports. "Recent squabbles between the White House and the industry, which intensified over the weekend, underscore the potential pitfalls for Obama's broad plan to reshape health care. Insurers." During an appearance on ABC's "This Week" on Sunday, White House counselor David Axelrod said "[t]he insurance industry has decided now at the eleventh hour that they don't want to go along with this… We have a health care system now that functions very well for the insurance industry but not well for the customers." Karen Ignagni, president of America's Health Insurance Plans, says she stands by her commitment in March to end pre-existing condition rating and denials, but she also "said the Finance Committee bill doesn't go far enough toward requiring everyone to purchase health coverage" (Fritze, 10/19).

In a Q&A, The Los Angeles Times reports on how the antitrust exemption for health insurers affects consumers (Geiger and Oliphant, 10/19).

Meanwhile, some Democrats who favor a health system overhaul are nonetheless defending the medical device makers in their home states, The Washington Post reports. The companies "refused to offer direct financial concessions earlier this year to help pay for health-care reform, unlike drugmakers, hospitals and other health- care players." The move led the Senate Finance Committee "to approve a $40 billion fee on device makers over the next 10 years." But medical device company leaders "say they are not making unfair profits, and they are pushing back with an aggressive lobbying campaign featuring an unlikely alliance of liberals and conservatives, including lawmakers who have received generous campaign contributions from the industry and its employees. Their aim is to reduce or eliminate the tax" (Eggen and Connolly, 10/18).

Related KHN story: Proposed Tax Rattles Orthopedic Device Industry (Appleby, 10/14)