Insurance Industry Now Against Health Care Bill

because the Senate bill doesn't penalize enough.

The Senate Finance Committee is set to vote on its health care bill on Tuesday, just when the health insurance industry has (supposedly) turned against it...

One of the ostensible reasons for this new twist is that the industry now claims Senate legislation would increase premiums for the average household to "$17,200 a year by 2013 under the proposals compared with $15,500 without the reforms. Today’s average annual premium is $12,300". (10/12/09 Health insurance lobby attacks reforms, Financial Times)

I thought: Something doesn't add up here. An industry lobby who has spent $100 million in ad campaigns in support of the government's health care "reform" is now against it? ... So I dug around and found this article.

Insurers Fight Bid to Ease Penalties in Health Bill
(10/6/09 Wall Street Journal)

"WASHINGTON -- Hospitals and insurance companies are pushing back against changes to the latest Senate health-care bill that ease the penalties for Americans who don't carry health insurance.

"The Senate Finance Committee could vote late this week on a sweeping bill designed to expand health-insurance coverage. Senators refining the legislation last week narrowed the scope of a new requirement that all Americans carry health insurance out of concern it penalized people who can't afford to buy it.

"The changes mean the new mandate would apply to two million fewer people, largely those with lower incomes.

"Hospitals say that leaves too few people covered under the bill -- a shortfall that could undermine a cost-cutting pledge by the industry. In July, the hospital industry agreed to swallow $155 billion in government payment cuts over the next decade to help fund expanded coverage of the uninsured. Uninsured patients cost hospitals money when institutions provide treatment that isn't fully paid for.

"Chip Kahn, president of the Federation of American Hospitals, said the deal was based on lawmakers passing a bill that would leave 94% to 95% of Americans with health insurance. "It's something the agreement depends on," said Mr. Kahn, who helped strike the deal. He said he hoped the coverage levels will get closer to this target as the final bill comes together."

Mr. Kahn is crying foul, and saying to the White House and Congressional leaders "We thought we had a deal".

So there was a deal after all. And the deal was that the government would punish Americans without health insurance severely enough so that it would be cheaper to buy insurance than to pay the penalty.

Now the industry has turned against the Senate plan because the penality is not big enough for their liking:

"Alissa Fox, a senior vice president at the BlueCross BlueShield Association, which represents 39 independent insurers nationwide, estimated that the latest proposal's top penalties for not carrying insurance, which peak at $1,900 a year for families, represented only about 15% of the average health-insurance premium."

""It's essentially creating a marketplace where people can wait to buy coverage until they get sick," Ms. Fox said."

Instead of buying $12,000 health insurance for the family, you pay the penalty of $1,900 per year until you get sick. Over $10,000 savings per year for cash-strapped families going through the worst recession since the Great Depression. They could use that penalty money and more, if the government weren't so keen on taking everything that's left.

What a perverse, immoral system we have.

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