Health Insurance Lobby Worried About Direct Costs Of Reform

by Julianne LaJeunesse- University of New Mexico

Officials from various health care groups agreed on Monday that controlling costs and tackling health coverage for Americans with pre-existing medical conditions is going to require the masses. The issues were debated at a forum hosted by House Health Care Caucus Chairman U.S. Rep. Michael Burgess (R-Texas), who said that the the goal of the discussion was to figure out “how to affect [healthcare reform] without interfering with people’s freedoms and their rights in the process.”

President and CEO of America’s Health Insurance Plans Karen Ignagni started off by saying that “we as a community support reform.” Ignagni, whose organization represents over 1,300 companies that sell health insurance, added that her industry would like to guarantee coverage to all Americans, would like to end pre-existing condition limitations and exclusions, end gender differentiation, and no longer require health status ratings.

However, she argued that without both young and elderly Americans in the insurance pool, reform will make the system worse, citing unsuccessful examples of state mandated insurance as the basis for AHIP’s conclusion. She suggested that in addition to looking at mandated insurance, Congress should also address budget and fairness questions within reform.

“To what extent should people, who have no choice but to be in the pool, subsidize folks that decide to wait until they absolutely need coverage to get in?” asked Ignagni. “That’s a societal question, it’s a fairness question… and it’s a very important question… [and] the third issue is the budgetary imperative.”

Former Congressional Budget Office Director Doug Holtz-Eakin also raised fiscal questions about the Senate and House bills, saying neither will bend the health care cost curve.

“The entitlement that’s set up in the House program grows at 8 percent a year as far as the eye can see… faster than this economy will grow, faster than tax revenues will grow and thus is a fiscal risk in addition to not being a step forward in health care reform,” Holtz-Eakin said. “Oddly enough, the Senate bill, that was delivered by the Senate Finance Committee, also has an entitlement that grows at 8 percent per year…and thus fail[s] the fundamental test of lowering the growth rate of health care costs.”

Holtz-Eakin said that the health insurance industry could achieve a better business model if it adopted intervention practices such as prevention and early disease detection, which he said “would pay off over a life cycle.” He added that a business model that does so would reward quality.

On the issue of costs, Janet Trautwein, CEO of the National Association of Health Underwriters, was less open to removing pre-existing conditions without a more diverse pool of insured people.

“People with those pre-existing conditions use more health care…if we have only sick people in the pool, then we have defeated our purpose of affordability. And that is why we have a problem with the way in which pre-existing conditions may be removed from policies today.”

Former CBO Director: Public Option Won't Help Health Care

By Leah Valencia, University of New Mexico- Talk Radio News Service

Former Congressional Budget Office Director and George W. Bush economic adviser Doug Holtz-Eakin said Monday that a public option will not solve the fundamental problems in the U.S. health care system, warning lawmakers that it would ultimately present the same problems as Medicare.

“Public plans are not going to be able to negotiate any more effectively with every local hospital and doctor in a geographic area than private insurers,” Holtz-Eakin said during a conference call hosted by the Galen Institute. “Indeed they might negotiate worse.”

Holtz-Eakin said that the options for a public plan had a remarkable resemblance to Medicare, and if it were to reimburse on the basis of Medicare payment rates, it would only add to the problem.

“Medicare payment policies are one of the problems with the American health care system,” he said. “It is not something we want to spread more broadly throughout the system, it is something we want to move away from.”

Holtz-Eakin noted that the other widely discussed option to run a public plan like a private insurance company would not increase competition because it would be too difficult for the government to politically cut out select hospitals.

“That leads us right to the solution 'let’s have more competition in the insurance market and that has nothing to do with a public option',” he said. “It is something we do not need in the debate. We need real reform.”

Will Social Security suffer under an Obama-Biden administration?

The McCain-Palin campaign says the Obama-Biden campaign’s tax plan will have a downward effect on Social Security solvency by giving Americans credit for their payroll tax liability. The campaign’s Senior Policy Adviser Doug Holtz-Eakin said the Obama campaign plans to relieve Americans of payroll taxes, and by doing would “rob Social Security indirectly,” because payroll taxes finance social security, as well as medicare.

Former U.S. Senator Dan Coats (R-Ind.) said, “The rhetoric and record of Barack Obama clearly supports higher taxes and more spending...At a time of financial crisis that we’re all going through right now, the idea of raising taxes is counter to what virtually every economist who has ever written, or studied, or analyzed the situation would recommend. You don’t raise taxes in a fiscal downturn”. Holtz-Eakin explained that the impact of raising taxes hurts small businesses first, who generate “80 to 90 percent of new jobs in America.”

Former Senator Coats added that another one of the main differences between the McCain-Palin campaign and the Obama-Biden campaign is that McCain supports the use of coal in the mid-west, where Coats says there are abundant coal resources and new clean coal technologies.

McCain campaign tries to "straight talk" their health care policy

The McCain/Palin campaign's Senior Policy Adviser, Doug Holtz-Eakin, eagerly dismissed "misconceptions made by the Obama campaign about McCain's health care policy" in a teleconference today. The McCain campaign denied that McCain would tax health care benefits for the first time. Holtz-Eakin said "McCain's tax code will equally subsidize private health insurance." The Obama campaign supposedly accused McCains health care policy because Americans with pre-existing
medical conditions would not receive coverage. Holtz-Eakin said "McCain'ss guaranteed access plan for every state would implement fines on companies that deny care inappropriately."

The McCain campaign said the Obama campaign created a false perception of a $882 billion cut to
medicare, phrasing it as a 'cut to necessary care, but Holtz-Eakin said that "there will be no cuts to health care, especially Medicare." He also noted that the same health care benefits will grow more slowly.

Holtz-Eakin ended the conference by saying that Obama's plan is an expansion of big government and is on the path towards "risky sub-prime health care".

McCain-Palin campaign attacks Obama's tax proposals

"The reality is not that Barack Obama has a tax-cut, or even a plan to make jobs. The reality is that he has a plan that is riddled with bad incentives, full of targeted handouts, and fundamentally based on redistribution of wealth, and stands in sharp contrast to John McCain's approach." This was stated by Doug Holtz-Eakin, Senior Policy Adviser for the McCain-Palin campaign, in response to Senator Barack Obama's (D-IIll.) tax reform plan. Nancy Pfotenhauer, Senior Policy Adviser for the McCain-Palin campaign, said Obama's tax plan "punishes achievement".

The campaign advisers claim Obama's tax reforms amount to "sending checks to individuals, many of whom may not be working, and who certainly do not have a tax liability". They added that Obama's tax cuts for job creation in American businesses are "too little too late", and too small to offset the supposed damages his own policies would do. Pfotenhauer said, "if this is his prescription for our economy, at a time when we're already ailing, I cannot think of any kind of medicine that could be worse".

"Barack Obama's overall economic policy can be characterized as the Europeanization of the american economy, because it is effectively a high tax, high spending protectionist approach," Pfotenhauer said, "and it doesn't work. All you need to do is look at the economies in say Germany or France, where you have, even in our tough economic time, unemployment rates that are significantly higher, growth rates that are significantly lower, and a quality of life or living that is about a third lower than in the United States." Holtz-Eakin and Pfotenhauer were participating in a conference call on Obama's tax plan, which according to the McCain advisers, includes approximately a trillion dollars of new spending and increased tax credits for Americans that do not pay income taxes.