THE WHITE House and the health insurance industry yesterday descended into open conflict on the eve of a critical Senate vote that could determine US president Barack Obama’s healthcare reform plans.
Supporters of Mr Obama accused the healthcare insurance industry of “sabotage” after it issued a study by PricewaterhouseCoopers arguing that premiums would rise much faster under proposed reforms than they would have otherwise.
The 26-page report marked an abrupt end to the unlikely alliance between Mr Obama and America’s Health Insurance Plans (AHIP) – the main industry lobby group, which has spent about $100 million (€67.7 million) in advertising in favour of the reforms.
The report estimates that premiums for the average household would rise to $17,200 a year by 2013 under the proposed reforms as against $15,500 without the reforms. Today’s average annual premium is $12,300.
“This is a transparent attempt by the health insurance industry to sabotage reform,” said Richard Kirsch, head of Health Care for America Now, the largest group advocating reform. “Of course they’re coming out with guns blazing at the 11th hour. They’re out to protect their money and their power, and they’ll go to any lengths – including circulating fake information – to stop real change.”
A spokesman for Max Baucus, chairman of the Senate finance committee, which is to vote today on its $829 billion 10-year healthcare reform plan, described the report as a “hatchet job, pure and simple”.
The report identifies elements of the “Baucus plan” that would raise costs for average policyholders. These include steps reducing the number of Americans forced to take up health insurance by lowering the fine levied on individuals who declined to take out a policy.
The report highlights proposed taxes on the so-called “Cadillac plans” – the more expensive health insurance plans, amounting to more than $8,000 a year for individuals and $21,000 a year for families. It also singles out the more than $400 billion in cuts to Medicare, the programme for seniors, that would be used to help pay for subsidies to expand US insurance.
The rancorous split between the White House and the health insurance lobby could make it far tougher for Mr Obama to push through healthcare reform.
In 1993 AHIP played a key role in sinking the Clinton administration’s healthcare reforms when it sponsored the “Harry and Louise” advertisements that persuaded many Americans that reform would undermine their existing coverage.
However, many liberal supporters of Mr Obama alleged that the White House paid too high a price for the initial support of the health insurance industry, most notably by signalling flexibility over the inclusion of a “public option”, or government insurance plan, which was anyway jettisoned under the Baucus plan.
Today’s vote on the 23-member committee will be a key test of whether Mr Obama can keep conservative Democrats onside. – (Copyright The Financial Times Limited 2009)