Democrats slam insurers before healthcare summit

U.S. President Barack Obama waves to doctors in attendance from across the country after making remarks on the need for health insurance reform in the Rose Garden at the White House in Washington, October 5, 2009.

WASHINGTON (Reuters) - Democrats turned up the heat on health insurers on Wednesday, attacking the industry for greed and lack of competition before a White House summit that President Barack Obama hopes will revive his healthcare overhaul.

The day before the summit, Obama touted the economic benefits of health reform to a largely friendly audience of business executives as an opinion poll showed a big majority of Americans believed the high-level meeting would fail.

In Congress, the House of Representatives voted overwhelmingly to repeal the federal antitrust exemption for health insurers and Democrats called a House hearing to blast insurer WellPoint Inc for its recent premium hikes.

Democratic critics told Wellpoint Chief Executive Angela Braly that the premium increases for some Anthem Blue Cross customers in California were a function of greed, not need, and said they highlighted the importance of reform.

"Unless Congress and the administration act, Americans across the country will continue to experience large premium increases and will be priced out of the market," said Representative Bart Stupak, head of the House Energy and Commerce oversight panel.

Thursday's summit will bring together leaders of both parties in a last-gasp effort to revive a sweeping healthcare overhaul that has stalled in Congress amid broad public dissatisfaction and unified Republican opposition.

The White House offered an olive branch to wary Republicans, saying the healthcare plan Obama released on Monday was not the last word on the issue and promising to work to find common ground at the televised summit.

"It is important to understand that this proposal isn't meant to be the final say on the legislation," Nancy-Ann DeParle, director of the White House Office of Health Reform, said in an e-mail.

But Republicans, who have demanded Democrats scrap the bills and start over, criticized Obama for signaling he would consider ramming the bill through Congress using a procedure that would bypass the need for Republican support.

'WHAT'S THE PURPOSE?'

"In light of all these behind-the-scenes efforts to get around the will of the people, it's hard to imagine what the purpose of Thursday's summit is," Senate Republican leader Mitch McConnell said.

Healthcare bills passed by the Democratic-controlled House and Senate last year were designed to reshape the $2.5 trillion healthcare industry by cutting costs, regulating insurers and expanding coverage to tens of millions of Americans.

But efforts to merge them and send a final version to Obama collapsed in January after Democrats lost their crucial 60th vote in a special U.S. Senate election in Massachusetts.

Americans have low expectations for Thursday's gathering, with about three-quarters of respondents in a USA TODAY/Gallup Poll believing the daylong session will end without agreement. One in five thought they would reach a deal.

The poll found 49 percent of Americans opposed the sweeping Democratic-backed bills passed by the House and Senate, with 43 percent backing them.

At the Wellpoint hearing, Braly said recent rises in premiums -- as high as 39 percent for certain individuals -- reflected higher costs from hospitals, doctors and drugmakers.

But Democrats said Wellpoint was simply raising premiums to "squeeze" consumers to pad their profits.

The House also voted 406-19 to approve a measure that would make the health insurance industry subject to federal antitrust laws designed to protect consumers from price-fixing and other anti-competitive acts.

Democrats said the change, which still faces an uncertain future in the Senate, would increase competition and help shine a light on industry practices.

Health insurer stocks shrugged off the blows, with the Morgan Stanley Healthcare Payor index rising 0.92 percent and WellPoint shares closing up 1.91 percent.

Obama told business executives his comprehensive approach would improve the bottom lines for companies across the United States.

"Because there's no certainty in a future where premiums rise without limit; there's certainly no certainty where companies are forced to drop coverage or cut back elsewhere," Obama told the Business Roundtable, which has been friendly to his healthcare plans.

Negotiations for the summit have touched on everything from the list of attendees to the shape of the table. The meeting will be broken into sections to discuss controlling costs, insurance reforms, deficit reduction and expanding coverage, the White House said.

Republicans said they would focus at the summit on a scaled-back approach that would boost competition across state lines and curtail medical malpractice lawsuits.

But if Republicans insist Democrats should scrap the existing bills and start over, "then there is nothing to talk about," Democratic Senator Chris Dodd said.

(Additional reporting by Donna Smith, Diane Bartz, Susan Heavey, Steve Holland and Caren Bohan; Editing by Simon Denyer and Peter Cooney)