AP:Obama takes on insurers over gov't plan

[JMS]

Following what's going on down on the hill, I was pretty sure meaningful healthcare reform was dead last week. The industries just own too many politicians on both sides of the isle to be threatenned by mere reality. It was looking like the "Healthcare reform" effort would just turn into more subsedies for the profiteers while shifting burden from the employer to the individual for insurance coverage. Basic disaster.... Now it seems Mr. Obama has thrown down the gauntlet, and is inserting himself into the debate. Maybe there is still some hope..

http://www.google.com/hostednews/ap/article/ALeqM5jlMpJGn28kqCcgU-aGcYE_ZHW-ywD990IFLO0

Obama takes on insurers over gov't plan

By RICARDO ALONSO-ZALDIVAR and ERICA WERNER – 32 minutes ago

WASHINGTON (AP) — President Barack Obama on Tuesday squared off with the insurance lobby over industry charges that a government health plan he backs would dismantle the employer coverage Americans have relied on for a half century and overtake the system.

The harsh exchange came after months of polite White House photo-ops at which the administration and insurers emphasized their search for common ground. It happened just when Congress seems to be floundering in its attempt to move sweeping legislation embodying Obama's top domestic priority, although leading lawmakers say they remain confident.

"If private insurers say that the marketplace provides the best quality health care ... then why is it that the government, which they say can't run anything, suddenly is going to drive them out of business?" Obama said in response to a question at a White House news conference.

"That's not logical," he scoffed, responding to an industry warning that government competition would undermine the employer coverage.

At issue is whether to set up a government-sponsored health insurance plan that would compete with private companies. Individuals and small businesses would get to pick either the public plan or a private one through a new kind of insurance purchasing pool called an exchange. Eventually, the exchanges could be opened to large companies as well.

"The public plan, I think, is an important tool to discipline insurance companies," Obama said.

That's not what the industry thinks.

In a letter to senators released Tuesday, the two largest industry groups warned in stark terms that a government plan would take over the system.

America's Health Insurance Plans and the Blue Cross Blue Shield Association also said they don't believe it's possible to design a government plan that can compete fairly with private companies in a revamped health care market. That particular statement seemed to be aimed at lawmakers of both parties who continue to seek a compromise on the contentious issue.

"We do not believe that it is possible to create a government plan that could operate on a level playing field," said the insurers' letter, signed by AHIP head Karen Ignagni and Scott Serota, the Blue Cross CEO. " Regardless of how it is initially structured, a government plan would use its built-in advantages to take over the health insurance market."

The industry suggested a government plan would run counter to Obama's promise that Americans can keep the coverage they have.

"A government-run plan no matter how it is initially structured would dismantle employer-based coverage, significantly increase costs for those who remain in private coverage, and add additional liabilities to the federal budget," said the letter.

Nonetheless, recent media polls have found strong public support for the idea. That has emboldened liberals, who are arguing that Democrats shouldn't compromise on a government plan. But moderate Democrats in the Senate are trying to get Republican support for the idea of nonprofit co-ops as an alternative.

Without a compromise, there probably won't be any significant Republican backing for Obama's plan to slow increases in health care costs and expand coverage to the nearly 50 million uninsured.

Obama said he understood the legitimate concerns of insurers that private plans wouldn't be able to compete with a taxpayer-subsidized one "with the government just printing money." The proposals lawmakers are debating would provide government money for start-up costs, but then require the government plan to be financed through premiums.

Insurers say the government can protect consumers through stiffer regulation.

"If we have comprehensive reform of market rules, then it would not be necessary to have any form of public plan, including co-ops," said Robert Zirkelbach, a spokesman for the industry.

On Capitol Hill, House Democrats pushed forward with a partisan health care bill. Meanwhile, key Senate Democrats were still laboring to achieve an elusive bipartisan compromise. Cost estimates of $1 trillion-plus sent the Senate Finance Committee back to the drawing board.

Another panel, the Health, Education, Labor and Pensions committee got bogged down in delays and partisan strife, and jettisoned an end-of-week deadline for passing its bill.

A sweeping bill unveiled in the Democratic-controlled House last week is being weighed in hearings that got under way Tuesday. The draft legislation, written without Republican help, would require all Americans to purchase health insurance and would put new requirements on employers, too.

There was little sympathy for insurance companies from majority House Democrats as they convened their first hearings on a bill that would require insurance for all and include a public plan.

"In today's system, insurance company bureaucrats hold all the power," said Education and Labor Committee Chairman George Miller, D-Calif. "They can deny coverage or delay treatment based on a pre-existing condition."

A public insurance option would "keep insurance companies honest," Miller said.Obama's goal for signing a bill in October appears in doubt.

But Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said Tuesday he is still optimistic that a bipartisan deal can be reached.

"We're a lot closer," said Baucus after a meeting with a small group of senators from both parties that has been dubbed 'the coalition of the willing.' "We'll make it.

Of the five House and Senate committees working on health care, Finance is the only one that appears to have a chance at a bipartisan agreement.

[Larry]

"If private insurers say that the marketplace provides the best quality health care ... then why is it that the government, which they say can't run anything, suddenly is going to drive them out of business?" Obama said in response to a question at a White House news conference.

"That's not logical,"

It's a valid point.

OTOH, for a possible response, I'd point to Medicare.

Both of my parents had really good health care when they retired, from their previous employment. (Dad from the Federal Government, Mom from the Virgin Teachers Association.)

And both of them ended the day they turned 65. Reason? "Well, they qualify for Medicare, now".

Say I'm in charge of the benefits for, say, the Nebraska School employees.

If the government institutes a health care system for people who don't have insurance, then why should I pay for insurance for them?

I don't think anybody says that Medicare is really great health insurance. But if it's free to anybody who doesn't have coverage, then why should anybody pay for coverage?

[sjinhan]

If the government institutes a health care system for people who don't have insurance, then why should I pay for insurance for them?

I don't think anybody says that Medicare is really great health insurance. But if it's free to anybody who doesn't have coverage, then why should anybody pay for coverage?

because like you said its not the best coverage... I am little torn about this topic because I do think that the some of the service quality from hospital will go down but you would think they will be options that develop over time where you one can have an option to pay premium for the better service and quality for healthcare...

the problem with current system is that too many are stuck basically without any alternative that will provide them with cheap medical attention...

[ACW]

I can answer that: gov't can use mandates and price controls and such to drive them out of business.

[PeterMP]

Because it isn't at all clear the government will "play" honestly and not use existing government infrastructure.

Where are their offices going to be?

Are they going to pay rent, property taxes, etc. or are they just going into existing federal buildings?

[Burgold]

I think the problem with Medicare is not Medicare. It's us and them. I think when the system started it was a darn good system. A great car that provided a damn fine ride for the most part. The problem is, with any great car, you have to do maintenance, swap out parts, and get rid of the stuff that just ain't working.

I think we've failed Medicare by not constantly adjusting, replacing, and taking good care of it. The car still runs, but it was designed for a different era. Short lifespans, fewer people, etc. It's still not a bad system, but it needs a lot of work, but the only thing we've done for it is gas 'er up and give it a paint job to hide the rust.

The idea behind Medicare was/is sound and it actually has worked pretty well for a number of decades, but nothing is meant to be static, and we've neglected the battery, the engine, and even the tires for at least thirty years. Is it any wonder that it's struggling. Don't blame the car. Blame us.

[jbooma]

For those who are interested in this huge debate remember it wasn't the insurance companies that told Obama no, it was the AMA or if you don't know the American Medical Association, basically the drs.

We can not talk about TRUE health care reform till they overhaul medicare, and that is not going to happen.

Being in the middle of all of this it is very fascinating to see exactly what is happening. What is interesting is a lot of the news sites have not beaten up Obama for not reverting to healthreform in a similar manner the republicans have been saying for years.

There will never be true univeral healthcare in the US, now there might be a system that looks like it but won't be when you look at the true plans in the world. Which is the best for this country and the way the infrastructure is in place to handle the growing needs.

[Larry]

For those who are interested in this huge debate remember it wasn't the insurance companies that told Obama no, it was the AMA or if you don't know the American Medical Association, basically the drs.

You certain of that?

I've seen threads in here, claiming that. And it seemed that the stories were based on selectively editing Obama's speech before the AMA, and their response to it.

Supposedly, the way things really happened was that the audience liked his proposals for health care, they didn't like his announcement that no, he wasn't going to make it illegal to file a malpractice lawsuit.

(I, obviously, wasn't there. I just remember 3-4 threads where that's the way the thread went.)