[Posted by Karl]
The Washington Post’s Ceci Connolly actually provides the revealing lede:
After months of collaboration on President Obama’s attempt to overhaul the nation’s health-care system, the insurance industry plans to strike out against the effort on Monday with a report warning that the typical family premium in 2019 could cost $4,000 more than projected. (Emphasis added.)
Connolly’s story buries the reason for this turn of events:
Early in his quest, Obama wooed industry leaders in the hopes of neutralizing many of the players who helped defeat a similar effort by President Bill Clinton. Yet as the process has moved from high-minded concepts to legislative details, the tension has mounted. Hospitals and doctors have increasingly grumbled that the administration is not keeping bargains it struck over how many Americans would be covered under reform and what payment changes would be made. (Emphasis added.)
To be fair, however, Connolly did a story Friday that gets closer to the heart of the matter:
The industry heavyweights President Obama neutralized through the summer are agitating that the health-care bills in Congress violate agreements they made with the White House, leave 25 million Americans uninsured and have the potential to increase medical costs.
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. The result, they predicted, would be ever-rising premiums for the people, businesses and governments that pay for medical care.
“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. “This legislation will fail the test of affordability for individuals.”
Connolly’s Friday piece also makes clear that the opposition to the Baucus vapor bill extends beyond health insurers to include the AMA and the Federation of American Hospitals.
The New Republic’s Jonathan Cohn predictably questions aspects the health insurers’ study, mostly its treatments of the subsidies (ultimately paid for by taxpayers) to help people buy insurance. However, the health insurers respond that those subsidies will not stop premiums from increasing:
The chief reason, said the report, is a decision by lawmakers to weaken proposed penalties for failing to get health insurance. The bill would require insurers to take all applicants, doing away with denials for pre-existing health problems. In return, all Americans would be required to carry coverage, either through an employer or a government program, or by buying it themselves.
But the CBO estimated that even with new federal subsidies, some 17 million Americans would still be unable to afford health insurance. Faced with that affordability problem, senators opted to ease the fines for going without coverage from the levels Baucus originally proposed. The industry says that will only let people postpone getting coverage until they get sick.
This may represent the unraveling of a Faustian bargain. The essential terms of the deal were that insurers woul be forced to accept everyone (“guaranteed issue”) and charge the same rates (“community rating”) — causing insurance premiums to skyrocket — but this would be offset by the individual mandate, which would force the young and healthy to fork new money over to the insurers. Without those mandates — and hefty fines to enforce them — the insurers will balk at the rest of ObamaCare.
At National Review, Benjamin Zycher explains why the political pressures to weaken the individual mandate, supposedly the quid pro quo for nonexclusion of insurance applicants with pre-existing conditions, are and will remain irresistible. And Zycher is right to mock the lobbyists for entering into the deal at the outset. Poll after poll — including the most recent one from Quinnipiac — shows the American people think ObamaCare will not live up to its promises.