KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Health Industries: Changes Could Kill Health Reform Bill

Insurers and pharmaceutical manufacturers are concerned that changes in a Senate bill could derail efforts - and their agreement - to overhaul the nation's health care system.

The Washington Post: "Industry leaders, who have held their tongues for months, spoke in increasingly dire tones Thursday about the impact of the Democratic proposals, raising the specter of an eleventh-hour lobbying campaign to defeat Obama's centerpiece domestic policy goal. Many lobbyists and independent analysts underlined what they called major flaws in the Finance Committee's bill, saying it probably would draw the sickest, most expensive patients into the health coverage system without balancing the insurance risk with more young, healthy people." Industry says that lawmakers must live up to their end of the bargain to make most Americans - 97 percent - take health insurance in order for hospitals and industry to take $155 billion less in Medicare payments over a decade.

"'The consequences of this would be an upward spiral; rate shock to everyone who stays in,' said Karen Ignagni, president of the industry group America's Health Insurance Plans" The American Medical Association is concerned because $200 billion in promised higher Medicare payments isn't in the Senate Finance Bill (Connolly, 10/9).

NPR: "The bill would require that everyone have insurance - a so-called "individual mandate." But there was only enough money to help the poor and lower-middle-class - who don't already have insurance - pay for it. … 'You need everybody in the insurance pool to make sure that premiums are affordable. And lowering the penalty will mean that people will find it more advantageous to pay a very small penalty than to buy insurance,' says Alyssa Fox, a senior vice president with the Blue Cross and Blue Shield Association." Industry worries that young people won't have the incentive to buy into the system and will drive premiums for everyone up (Rovner, 10/9).

Managed-care stocks "sliding significantly lower Thursday and hospital shares climbing as an analysis of the Senate Finance Committee's health-reform bill increased chances that the measure, which one analyst called 'onerous' for health insurers, will advance, The Wall Street Journal/Dow Jones Newswires reported. "Contributing to the managed-care sell-off, apparently, were House Speaker Nancy Pelosi's comments expressing interest in exploring a windfall-profit tax on insurers to fund an expansion of health coverage."

WellPoint Inc. (WLP), the largest managed-care company by membership, closed down 6.2%, or $2.94, at $44.72. UnitedHealth Group Inc. (UNH), the largest by revenue, Aetna Inc. (AET), Humana Inc. (HUM) and Cigna Corp. (CI) traded down by approximately 3.6% to more than 5%. Hospital operators, expected to receive a boost from expansion of health coverage to more patients, saw stocks rise" (Wisenberg Brin, 10/8).

Politico: "'We remained convinced that the Senate Finance Committee bill will serve as the blue print for comprehensive health care reform. At the same time, we will continue to reach out to House leaders to try and find some middle ground,' said PhRMA senior vice president Ken Johnson. … Reform, Johnson argued, will not bring an influx of new customers to the market because most of the uninsured are younger than 35 and relatively healthy. The newly insured, who used to pay full retail for their prescriptions, will now benefit from negotiated drug prices." (Frates, 10/8). 

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