Insurers Oath to Fight Baucus Bill Drugmakers, Hospitals Back
The $829 billion proposal, written by Montana Democrat Max Baucus, now must be reconciled with four competing House and Senate versions, all of which include a government-run medical plan. The insurance industrys criticism of the Baucus bill centers on reduced penalties on individuals who fail to get insurance, and taxes on so-called Cadillac health policies.
The bill extends coverage to more than 30 million uninsured Americans, funded partly by $121 billion in taxes on drug manufacturers, device makers and insurers. The health plans said they wont back the legislation because it lets people buy insurance only when they need it, raising the costs for those who stay covered.
“What they came to realize is there are lots of ways they can get hurt without a public plan,” said John Sullivan, director of research at the health-care investment bank Leerink Swann & Co., in a telephone interview. “One way is to have health plans full of sick people.”
The National Coalition for Health Care, a Washington-based consumer group that includes the AFL-CIO labor federation, also attacked the Baucus measure, saying it failed to deal with rising medical costs in the private sector. Unions say premiums for their members will rise as the result of the tax on Cadillac plans, which offer generous benefits at low cost to customers.
Deeply Concerned
“We remain deeply concerned about the long-term sustainability of what this plan creates,” said Ralph Neas, the coalitions chief executive officer, in a telephone interview.
The legislation would prevent insurers from denying coverage for preexisting medical conditions or dropping customers who get sick.
While Americas Health Insurance Plans, the Washington- based trade group, voiced support for those changes, it said other measures would make insurance less affordable. The Finance Committee also voted Oct. 2 to cut penalties and expand hardship exemptions for those who dont have coverage.
The Baucus proposal “imposes hundreds of billions of dollars in new health-care taxes and provides an incentive for people to wait until they are sick to purchase coverage,” the insurance group said in a statement. The organization represents UnitedHealth Group Inc., based in Minnetonka, Minnesota, and Indianapolis-based WellPoint Inc., the two largest health insurers, along with smaller providers.
Insurers Balk
“We cannot support this legislation in its current structure,” said Robert Zirkelbach, the groups spokesman, in an e-mail.
Democrats want Snowes vote so they call the bill bipartisan, Perry said in a note to clients yesterday. “As long as Snowe maintains her leverage, the bill is unlikely to move to the left,” he wrote. “Were unlikely to see a government-run public option.”
The drug industry said the legislation should be the blueprint for negotiations.
“We have no second thoughts” about backing the measure, said Ken Johnson, senior vice president of the Pharmaceutical Research and Manufacturers of America, the industry trade group, based in Washington. “We continue to be very supportive of the effort.”
Drug Deal
Drugmakers including New York-based Pfizer Inc. agreed to forgo $80 billion in revenue over the next 10 years as part of an agreement with Baucus to finance the overhaul. The deal includes lowering costs for some brand-name drugs that may lead to more sales to people on Medicare, the U.S. governments insurance plan for the elderly. Democrats in the House have said theyre not constrained by the deal and may seek more concessions.
“We are reaching out to House leaders to work toward a compromise, but the ball is in their court,” Johnson said by telephone.
The Advanced Medical Technology Association, the Washington trade group for device makers including Johnson & Johnson and Medtronic Inc., commended the finance panels “historic vote” even as it argued against the $39 billion tax over 10 years its members would face.