Some industry groups see boon in health bill

Mar 23 2010

The New York Times reports that the 32 million additional Americans who would be covered by health insurance by 2019 "would mean millions more Americans buying private health insurance and better able to pay for their hospital stays, doctors' visits, prescription drugs and medical devices. And some analysts said as the vote neared that the final legislation was shaping up as much kinder to the industry than many initially feared. Hospitals and drug makers, which supported the final legislation, would be clear beneficiaries, analysts say, even if the outlook for insurers was less certain. … There is no question that insurers would face the most strikingly different business environment, with drastic changes in the way insurance is sold to individuals and small businesses, one of the industry's most profitable areas. There would also be much heavier regulation" (Abelson, 3/21).

The Wall Street Journal: "Significant new opportunities exist for health insurers that run Medicaid plans and sell individual insurance products. Still, the industry says it is not happy with the final product because it doesn't solve the problem of rising health-care costs. Insurers had wanted more substantive changes in the way hospitals and doctors are paid, tying reimbursement to quality rather than volume. In the bill, such payment changes are primarily pilot programs" (Wang, 3/22).

The Los Angeles Times: "Giant health insurers could see revenue jump under Washington's new health overhaul that will require millions of additional customers to sign up for coverage in the coming years. But large insurers and Wall Street analysts say the prospect of a revenue bonanza may be tempered by the escalating costs of medical care and by provisions of new legislation that could eat into profits… Insurance industry experts say there is no way to fully gauge the effect because of its extended time frame. Four years from now, they say, Congress and the White House could have new occupants who may try again to reshape the healthcare landscape" (Helfand, 3/22). 

In a separate story, The Wall Street Journal reports on how large businesses would be affected. "The legislation hits companies in myriad ways, from stricter coverage rules to new taxes, which could change how they offer health care to employees. Yet, many larger businesses worry the measure will do relatively little to hold down their overall health-care costs, once a primary goal of the legislation, and could even force them up. Some big retailers could decide to cut back on the number of workers they hire and cover, business advocates said. Large corporations might decide within days to end coverage for their retirees' drug costs, because of a provision that takes away an existing federal subsidy. Longer-term, the legislation creates new competitive advantages for small employers over their larger rivals, some experts say" (McKinnon and King, 3/22).

The Associated Press reports on changes in a reconciliation package, cleared by the House last night but still under consideration in the Senate. "Tucked into President Barack Obama's health care bill are several 11th-hour changes that help major insurance companies and doctor-owned hospitals. Among the beneficiaries, according to lobbyists and congressional aides, are Kaiser Permanente, the giant California-based insurance company; Geisinger Health Plan based in Pennsylvania; and doctor-owned health facilities in about a dozen states, including Ohio, Pennsylvania and Tennessee" (Fram, 3/21).