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Health Insurers Emerge as Major Foes of Healthcare Reform

Posted Oct 20 2009 10:04pm

Both Big Pharma and the hospital industry stand to profit greatly from healthcare reform. New customers for drugs and services will undoubtedly emerge from this legislation. So who will be getting the short end of the stick? It turns out that this may be the health insurance companies that will now face unwanted competition, perhaps in the form of a public insurance option. They may also be forced to insure some customers whom they would have rejected in the past, thus reducing their profits. Did someone say competition? That's unfair! This is America. Here are some of the details from a recent article in the Washington Post (see: Health Insurers Emerge as Obama's Top Foe in Reform Effort ):

For months, President Obama and his administration waged their fight for a health-care overhaul without a clear opponent, even courting the industry executives and interest groups that helped kill reform efforts 15 years ago. But attacks on the leading Democratic reform plan this week by the insurance lobby left little doubt that two of the most powerful institutions involved in the debate -- the White House and the nation's insurance companies -- have abandoned any real hope of forging a compromise. What was a tenuous truce has turned quickly into an all-out battle, with both sides ratcheting up the hostilities...." The insurance industry has decided to lead the charge against health reform, and everyone recognizes their motives: profits," said White House deputy communications director Dan Pfeiffer."We are going to make sure they can't sink this effort at the last minute."...The insurers, however, showed no sign of being chastened. America's Health Insurance Plans, an industry trade group, opened a fresh line of attack with a multistate advertising campaign warning that senior citizens enrolled in private Medicare plans could lose benefits under the legislation...."We want to begin to build an awareness of the potential implications to seniors," said AHIP President Karen Ignagni. She declined to say how much money would be spent on the commercials airing in six states, but one advertising analyst said the industry has enough cash to pose a serious threat.... The insurance sector and health maintenance organizations spent more than $116 million on lobbying in the first six months of this year, according to an analysis by the nonpartisan Center for Responsive Politics.

So stay tuned to see who triumphs in this quest for meaningful reform of our healthcare system. To add some spice to the conversation, we now have an estimate of the amount of money being spent on political lobbying by the health insurance and HMO organizations during the first six months of this year -- $116 million dollars. I really have no idea what the final product from Congress will look like but continue to hope for the best. In a previous note, I was very pessimistic about any sort of change (see: American Attitude toward Reform Through the Eyes of David Brooks ). Here a quote from it:

I would personally like to see some fundamental changes in our healthcare system, particularly modifications of the current fee-for-service approach that rewards unnecessary and inappropriate procedures. Such an approach is wasteful and can also harm patients. I now don't believe that such a change is going to happen. There's just too much money flowing into lobbying efforts from special interest groups representing insurance companies, big pharma, hospitals, and physicians to maintain the status quo.
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