U.S. health insurers discuss $100 bln savings

WASHINGTON Mon Jul 13, 2009 2:48pm EDT

Critical care nurses David Levy (L) and Jean Isaac (C) confer in the intensive care unit of Tulane University Hospital in New Orleans February 14, 2006. REUTERS/Lee Celano

Critical care nurses David Levy (L) and Jean Isaac (C) confer in the intensive care unit of Tulane University Hospital in New Orleans February 14, 2006.

Credit: Reuters/Lee Celano

WASHINGTON (Reuters) - U.S. health insurers are in talks with the Senate Finance Committee to reach savings in the federal Medicare program of $100 billion over a decade, a source familiar with the talks said on Monday.

As Congress and the White House work on legislation to overhaul the U.S. health industry, health insurers are under pressure to come up with savings to follow commitments made by pharmaceutical industry for savings of $80 billion and the hospital sector for cuts of $155 billion over a decade.

The discussions focus on subsidies for Medicare beneficiaries who get their coverage through private Medicare Advantage programs. These plans receive subsidies at a cost greater than through traditional Medicare programs.

Lawmakers are racing to develop proposals to overhaul the U.S. healthcare system before the August recess. Extending coverage to many of the 46 million without insurance -- a major goal of President Barack Obama's domestic agenda -- could cost about $1 trillion over a decade and policymakers are hunting for savings.

A spokesman for America's Health Insurance Plans, which represents most of the industry, said insurers have already made significant concessions, such as discontinuing rating individuals based on health status and gender.

Industry spokesman Robert Zirkelbach also raised the specter of seniors losing their coverage if cuts are too deep.

The White House is also now looking to medical device makers for savings to help pay for healthcare reforms, according to Bernstein Research analysts. The administration was said to be seeking as much as $60 billion over 10 years, possibly through a rebate mechanism, in initial negotiations, the analysts said in a research note.

The Advanced Medical Technology Association, which represents makers of heart pacemakers, artificial hips, diagnostic imaging and other devices, is "working constructively with the White House and leaders on Capitol Hill" to help achieve healthcare reform, spokesman Michael McGarry said.

(Additional Reporting by Lisa Richwine and Jackie Frank)

(Reporting by Kim Dixon; Editing by Tim Dobbyn and Matt Daily)

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