Health Industry Pushes Back Against New Fees for Health Reform

Posted July 15, 2009 at 12:37pm

In a pre-emptive strike, the health insurance industry is lashing out against a group of Senate Finance Committee Democrats eyeing financial concessions from insurance companies to help pay for a massive overhaul of the nation’s health care system.Democratic Sens. Bob Menendez (N.J.), Charles Schumer (N.Y.) and Debbie Stabenow (Mich.) are scheduled this afternoon to endorse a proposal calling for insurance companies to pay “new fees— to help “defray the cost of health care reform.— An insurance industry insider called the move unhelpful to a negotiating process aimed at keeping the major industry players at the table.“This makes it more difficult as the process goes on,— this insider said.Senate Finance Chairman Max Baucus (D-Mont.), mindful of the public pressure from industry groups that helped derail the effort to reform health care in 1993, has managed to keep most of the players at the negotiating table — and from spending millions of dollars on ads opposing an overhaul — by working with them to spread the pain around. Baucus has also threatened to cut them out of the negotiations if they criticize the process while talks continue.The industry insider said health insurance companies are being unfairly targeted by the fee proposal and suggested it could leave the industry wondering what it has to gain by continuing to negotiate.This individual also disputed the contention of the three Democrats that insurance companies are earning excessive profits, particularly compared with the pharmaceutical and hospital industries.The Senate Democrats’ press release suggests that insurance companies have resisted embracing voluntary cost-cutting measures similar to those agreed to by the hospital and pharmaceutical industries. “Schumer, Menendez and Stabenow will say the proposed fee would help ensure that no health care benefits would need to be taxed to cover the costs— of health care reform, the Schumer press release said.The insurance industry insider countered that this proposal makes working with lawmakers to cut costs “more difficult.—