Insurance Industry Leads Late Assault On Health Care Reform

The insurance industry came off the bench too late in the game to block Senate Finance Committee approval Tuesday of a health care overhaul bill, but its failed eleventh-hour assault was a harbinger of attacks to come from once-dormant interest groups as Democratic leadersbegin assembling a final package of reforms.

An array of lobbies with financial stakes in the remake of the health care system - including labor unions, pharmaceutical companies and the health insurance industry - are preparing to torpedo specific provisions in the plans, though each group says it generally supports President Obama's effort.

The unions are running full-page newspaper ads Wednesday criticizing the bill for forgoing a government-run insurance option and taxinghigh-end, or Cadillac, health insurance plans.

Drugmakers are angling to head off proposals for expanded price fixing of medicine and medical services.

America's Health Insurance Plans (AHIP), the industry's lobby, fired the first shot in what is expected to be an extensive campaign with a report released on the eve of the Finance Committee vote that showed new taxes in the legislation would result in higher premiums for all consumers - as much as $4,000 higher over the next decade.

Senate Democrats and other overhaul supporters quickly moved to discredit the report, which was prepared by PricewaterhouseCoopers, trying to beat back the lobby that in 1993 helped derail President Clinton's health care overhaul with Harry and Louise TV ads.

The administration slammed the report for ignoring the bill's cost-saving measures and by demonizing the insurance industry, a strategyinitiated by liberal activist groups and top Democrats last month while the insurers mostly stayed on the sidelines.

It is astounding that an industry which has made so many billions off the backs of hardworking American families would lecture anyone on health care costs, said Senate Majority Leader Harry Reid, Nevada Democrat. The American people won't be bullied into inaction by rhetoric and scare tactics that simply fall flat.

AHIP also started airing a TV ad Monday in several key states thatwarns seniors that cuts to the Medicare Advantage program will result in fewer benefits for them. Is it right to ask 10 million seniors on Medicare Advantage for more than their fair share? the ad asks.

The ad buy, which reportedly cost at least $1 million, reflects the high stakes in the health care overhaul. Millions more in ads are expected from the insurers as well as a deluge of phone calls and e-mails from citizens in a grass-roots network long established by the health insurance lobby.

The committee approval of the bill, with support from Sen. OlympiaJ. Snowe, Maine Republican, was followed by a drop in prices of health insurance stocks. The Standard & Poor's index of health insurance stocks declined 2.4 percent.

While the insurance lobby went after what it called weak coverage requirement and new taxes, including a tax on high-end health care plans, other industries are getting ready to attack measures that impact their bottom lines.

The Pharmaceutical Research and Manufacturers of America (PhRMA) succeeded in keeping out of the bill a measure that would extend Medicare rebate rates, which the lobby calls price fixing, to patients with dual coverage under Medicare and Medicaid.

PhRMA officials say they are now applying heavy lobbying pressure on key senators to keep it out of the final package and are considering print, radio and TV ads to hammer home the message, including studies that show the price fixing would drive up premiums as much as 50 percent for seniors and cost as many as 100,000 job cuts by drugmakers.

You can take it to the bank that there will be an amendment on Senate floor to pass it again, and we are going to have to fight it and we will fight it tooth and nail, said Ken Johnson, PhRMA senior vice president for communication.

The measure, offered in committee by Sen. Bill Nelson, Florida Democrat, would have effectively undone a deal that the White House struck with the pharmaceutical industry to give $80 billion in rebates over 10 years in exchange for protection from further mandates that cutdrug profits.

A coalition of about 30 labor unions, which have been a major supporter of Mr. Obama's health care reforms, will run a full-page newspaper ad Wednesday critical of the Senate Finance Committee bill.

The unions, including the AFL-CIO and the American Federation of State, County and Municipal Employees (AFSCME), reject the bill because it taxes Cadillac health care plans, does not create a government-run insurance option and fails to force employers to insure workers.

The Senate Finance Committee bill remains deeply flawed, AFSCME President Gerald W. McEntee said in a statement. At a time when family budgets are already under enormous pressure, the bill does not ensurethat coverage will be affordable for average families. Moreover, it would finance health care reform with a tax on family health care plans.

In a Rose Garden address after the committee vote, Mr. Obama said there would be more wrangling over details of the health care overhaul as the two Senate bills and three House bills are melded into one final package.

Now, this bill is not perfect, and we have a lot of difficult workahead of us, the president said.