Insurers Press GOP on Its Health-Care Agenda

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HEALTH INDUSTRY NOVEMBER 3, 2010
Insurers Press GOP on Its Health-Care Agenda
Industry Wants Key Elements of Obama Administration's Overhaul Reversed, but Fears the Removal of Coverage Mandate
JANET ADAMY and JONATHAN WEISMAN

Health-industry groups are pressing to roll back key provisions in the Obama administration's health-care overhaul if Republicans recapture the House, but they're also worried that the party could go too far.

If they win the House, Republicans have promised that one of their first votes will be to repeal the health-care law passed in March. That would ultimately be stopped by the White House, or first by the Senate if Democrats retain control of it.

But Republicans will have the power to block appropriations funding for the least popular parts of the overhaul. And health-industry groups, which aligned themselves with Democrats to pass the overhaul, are now reaching out to Republicans to help shape the GOP's health-care agenda.

Insurers want to reverse tax increases and loosen restrictions on insurance premiums, and several groups hope to tack on medical malpractice protections.

At the same time, the health-care industry is concerned that Republicans want to remove the requirement that most Americans carry health insurance—a provision that rewards health-care providers with millions of new customers.

"Obviously you need good relations with the people who are crafting policy, because when they're crafting policy, they're shooting with real bullets," said Chip Kahn, president of the Federation of American Hospitals, which represents for-profit hospitals.

The insurance industry is working to persuade the next Congress to roll back a roughly $70 billion tax on insurance companies that takes effect in 2014, saying it will disproportionately hit small businesses that insure their workers. It also wants lawmakers to allow insurers to widen the rating bands that dictate how much more insurers can charge older customers.

Insurers also want to tackle the growth of health costs by enacting a new measure to give robust protections against medical malpractice lawsuits to doctors who follow certain "best practice" guidelines, said Karen Ignagni, the insurance industry's top lobbyist.

"We always reach out to both sides of the political aisle and we'll continue doing that because we have had concerns," said Ms. Ignagni, president of America's Health Insurance Plans. She said her group would be most focused on parts of the bill that it believes fail to lower the growth of health costs.

Drug makers want to eliminate a part of the law creating an independent committee to recommend cuts reducing the per-capita rate of growth in Medicare spending, known as the Independent Payment Advisory Board. Such a panel could lead to cuts in federal spending on prescriptions, which would hurt pharmaceutical companies.

"It will come down to specific policies," said Wes Metheny, senior vice president of the Pharmaceutical Research and Manufacturers of America, the drug industry's main lobby. "We were very supportive of health-care reform last year and there are some good things we think need to stay in place."

Republicans have been highly critical of the law's requirement that nearly all Americans carry insurance or pay a penalty. Some industry groups, which fought fiercely for such a mandate, say they are now looking for other ways of ensuring that healthy customers are funneled into insurance pools should that provision get dismantled.

"If there's a way to make sure that the primary goal" is met of ensuring access to affordable coverage, "we're open to lots of different ideas," Mr. Metheny said.

Health-care lobbyists say ideas under consideration include imposing higher rates for people who don't buy insurance in the law's early years and automatically enrolling people who are eligible for coverage subsidies. An administration official said Democrats initially looked at auto-enrollment and concluded it had drawbacks.

Most health-industry groups—including Ms. Ignagni's insurance group, which criticized the final law—say they're not ready to take a position on the Republicans' repeal effort.

Some of the architects of the health law say they fear a repeal less than inadequate funding for putting the law into effect. Two officials said underfunding could cripple efforts to set up federally regulated exchanges where individuals and small businesses can shop for insurance.

At the same time, the federal government will still have to enforce parts of the law that force insurers to cover people with pre-existing medical conditions and curb caps on coverage. Insurance companies fear that if they face new mandates but the law fails to bring millions of healthy uninsured Americans into the system, they could wind up with a relatively unhealthy customer base.

"It's absolutely the worst possible outcome," one former White House official said.

Write to Janet Adamy at janet.adamy@wsj.com and Jonathan Weisman at jonathan.weisman@wsj.com