Thursday, November 12, 2009

Powerful health care groups offer optimism on overhaul

health insurance

WASHINGTON - Two leading health care interest groups, representing insurers and big business, struck a more conciliatory, even optimistic tone on the health care overhaul yesterday, emphasizing their support of the overall goal of increasing coverage and containing costs even as they warned that the wrong bill could cause great harm.

Both groups are powerful players in the health care debate on Capitol Hill, where the House passed its version of a sweeping health care overhaul on Saturday and the Senate is likely to begin debate on a similar proposal in the coming weeks.

The Business Roundtable, an association of executives of top US companies, said the changes under consideration could reduce the average premium by as much as $3,000 per employee by 2019. But the business group warned that cost-cutting efforts will be critical to the success of any final bill and that lawmakers should implement aggressive cost-containment measures - such as paying doctors for quality and efficiency, not just for volume of treatments provided - faster and more broadly.

“Making the right choices as the final health care bill gets crafted is essential, and we are committed to working with Congress and the administration toward a bill we can support,’’ said Antonio M. Perez, chairman of the roundtable’s Consumer Health and Retirement Initiative and chairman and chief executive officer of Eastman Kodak Co.

While it was not a full endorsement, the White House was clearly heartened by the business group’s report, particularly since other business organizations such as the US Chamber of Commerce have been airing commercials opposing aspects of the health care plan.

In a statement, President Obama, who was traveling to Asia yesterday, said the report “underscores what experts and business people have told us all along - comprehensive health insurance reform is one of the most important investments we can make in American competitiveness.’’

The head of the insurance industry lobby also sounded much more conciliatory yesterday than she did last month, when the industry issued a report warning that premiums could skyrocket under one Senate committee’s proposal. Despite the industry’s warnings that a government-backed insurance option could sink private insurers, the House included a public option in its bill and Harry Reid, the Senate minority leader, has proposed putting a modified version in the Senate bill.

Karen Ignagni, chief executive officer of America’s Health Insurance Plans, emphasized that the industry still strongly believes the effort is important.

“We think now is the time to do it,’’ she said.

She noted that the nonpartisan Congressional Budget Office projects health care costs will increase by 6.2 percent a year on average over the next decade, which is almost certainly likely to be faster than the growth of the overall economy.

“We strongly support health reform and we think the country needs to move in that direction,’’ she said. “The reason for that is the current system cannot be sustained the way it is.’’

Still, Ignagni warned that the bill the House passed could thrust too much of the cost of health care onto the shoulders of younger people, because it lets insurers charge only older people - who typically incur much higher medical bills and whose incomes are generally higher - twice as much as younger people. A Senate bill would let insurers charge the older set as much as five times as much as the young.

But Ignagni said her group had devised a way to fix this problem. The federal government could save money and make premiums more affordable across the board, she said, by setting the ratio at around 5 to 1 and giving older people extra subsidies to help them afford their premiums.

Insurers say that setting the ratio closer to the House’s proposal would also cost more for two reasons: More younger people would qualify for federal premium subsidies, and fewer younger people would buy insurance if premiums were too high, which would result in a risk pool that is older and sicker.

Ignagni echoed the business group’s assertion that cost-containment efforts should be spread more broadly across the entire health care system, not just confined to a few small experimental projects within Medicare.