The White House Monday blasted a report from the health insurance industry that said Senate healthcare legislation would lead to increases in annual insurance premiums of as much as $4,000 by 2019.
The report for the industry trade group America's Health Insurance Plans represented a shot across the bow at Democratic plans to overhaul the $2.5 trillion healthcare system as President Barack Obama has been gaining momentum on the issue.
A top goal of Obama in seeking to revamp healthcare is to rein in costs that have soared in recent decades. The report, prepared by consultants PricewaterhouseCoopers and posted on the industry group's website over the weekend, said costs would increase for Americans rather than decline.
Health reform could have a significant impact on the cost of private health insurance coverage, the report concluded.
The Obama White House had sought to work with the industry but the report was a clear indication that this strategy was no longer operative.
This is a self-serving analysis from the insurance industry, one of the major opponents of health insurance reform, White House spokesman Reid Cherlin said.
The release of the report comes as the Senate Finance Committee plans to vote Tuesday on its healthcare plan after budget analysts gave the bill a rosy report card, estimating it would meet Obama's goal of reducing the budget deficit over 10 years.
Cherlin said the insurance group's report was timed to coincide with the Finance Committee's vote.
It comes on the eve of a vote that will reduce the industry's profits. It is hard to take it seriously, he said.
He said the analysis completely ignores critical policies will lower costs for those that have insurance, expand coverage and provide affordable health insurance options to millions of Americans who are priced out of today's health insurance market or are locked out by unfair insurance company practices.
The industry group's report identifies four key factors it says will drive up the cost of health insurance premiums, including a weak mandate that could result in many young people opting not to buy insurance.
A weak mandate coupled with measures preventing insurers from barring people with pre-existing conditions will help drive up costs, as will other factors like taxes on high-cost healthcare plans and new taxes on some healthcare sectors, the report said.
A family of four under current law could expect to pay $15,500 by 2013, but that would rise to $17,200 if the new measures were adopted, the report found. The cost would be $21,900 by 2019 under the current system or $25,900 if the changes are implemented, it said.
Efforts to increase coverage and promote quality could lead to a more efficient healthcare sector, but they could also lead to increased growth in costs if implemented without a full appreciation of the downstream impact on cost of health insurance coverage, the report said.
The non-partisan Congressional Budget Office last week put the cost at $829 billion, below Obama's $900 billion goal.
Senate Republican leader Mitch McConnell said the industry group's report should not be ignored.
Higher premiums, higher taxes, and more government -- that's not reform. But that's precisely what the American people, the Congressional Budget Office and now outside experts have identified with this $1 trillion experiment that cuts Medicare, raises taxes and premiums, and threatens the health care options that millions of Americans enjoy.
(Additional reporting by Donna Smith; Editing by Eric Walsh)