White House, Supporters Pile On Health Insurance Industry Over Critical Report

The White House and congressional Democrats, along with prominent supporters of their health care reform plans, fired back Monday at the insurance industry for issuing a study that claims the reform bill working its way toward a key vote Tuesday will raise the cost of individual coverage by hundreds of dollars a year.

Linda Douglass, spokeswoman with the Office of Health Reform, said in a statement that the timing of the study, released just hours before the Senate Finance Committee is set to vote on its bill, raises questions about its legitimacy.

"This is a self-serving analysis from the insurance industry, one of the major opponents of health insurance reform," she said. "It comes on the eve of a vote that will reduce the industry's profits. It is hard to take it seriously."

Advocacy groups and officials banded together to try to keep the potentially damaging analysis from gaining traction.

"I really don't think it's worth the paper it's written on," AARP Executive Vice President John Rother told reporters Monday. "If anyone believes it, that's a problem."

A statement from Families USA, a group that supports health care reform, called the "scare tactics" from the industry "deplorable."

But America's Health Insurance Plans, the industry group that sent its member companies the new study late Sunday, stood by the findings.

Spokesman Robert Zirkelbach rejected the suggestion that the study was timed for maximum impact, saying it responded to changes made to the bill over the last few weeks and was only finalized over the weekend. He said AHIP still supports health care reform, but wants to see additional changes made, either in the Finance Committee or later in the process.

"This data is an important part of the health care reform discussion. American people want to know how these provisions are going to impact the cost of health care coverage," he said.

The accounting firm study projects the legislation would add $1,700 a year to the cost of family coverage in 2013, when most of the major provisions in the bill would be in effect.

Premiums for a single person would go up by $600 more than would be the case without the legislation, the PricewaterhouseCoopers analysis concluded in the study commissioned by the insurance group.

"Several major provisions in the current legislative proposal will cause health care costs to increase far faster and higher than they would under the current system," Karen Ignagni, the top industry lobbyist in Washington, wrote in a memo to insurance company CEOs.

The study projected that in 2019, family premiums could be $4,000 higher and individual premiums could be $1,500 higher.

Sen. John Barrasso, R-Wyo., told FOX News that the warnings seem accurate.

"This tells me exactly what I've heard all around town hall meetings through the summer," he said. "People all around America say, 'Hey my own insurance is going to end up costing more if this health care plan goes through.'"

But Democrats moved swiftly to dismiss the study. The Senate Finance Committee is the last of five panels to consider health care reform legislation before the bills move to the floors of the House and Senate. The bill got a boost last week when the Congressional Budget Office estimated it would cover 94 percent of eligible Americans while reducing the federal deficit.

"It's a health insurance company hatchet job, plain and simple," said Scott Mulhauser, spokesman for Sen. Max Baucus, D-Mont., whose 10-year, $829 billion overhaul plan faces the committee vote.

Mulhauser said the study is "seriously flawed" because it doesn't take into account provisions in the legislation that would lower the cost of coverage, such as tax credits to help people buy private insurance, protections for current policies and administrative savings from a revamped marketplace.

But Zirkelbach said the tax credits don't change the presumption that premiums will go up.

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.

Though the Finance Committee bill is the only proposal that does not contain a government-run health insurance plan, which AHIP opposes, Zirkelbach said the weakened penalties for not getting coverage still create a big cost problem.

He said it's not too late to strengthen those penalties again and make other changes to lower costs.

Other factors leading to higher costs include a new tax on high-cost health insurance plans, cuts in Medicare payments to hospitals and doctors, and a series of new taxes on insurers and other health care industries, the report said.

"Health reform could have a significant impact on the cost of private health insurance coverage," it concluded.

Insurers played a major role in defeating then-President Bill Clinton's health care plan in the 1990s. Sunday, the industry stopped short of signaling all-out opposition. "We will continue to work with policymakers in support of workable bipartisan reform," Ignagni said in her memo.

Foxnews.com's Judson Berger and Fox News' Mike Emanuel and The Associated Press contributed to this report.