Obama: health insurers 'deceptive and dishonest'

* Obama: insurers use 'massive war chest' to fight reform

* President backs review of insurers' anti-trust exemption

* Healthcare reform closer than ever, Obama says (Adds Obama quote, insurance industry comment)

WASHINGTON, Oct 17 (Reuters) - U.S. President Barack Obama lashed out on Saturday against the "deceptive and dishonest" efforts of health insurance companies, who he said are trying to kill healthcare reform, no matter the cost to the country.

Sharpening his attack on insurers, Obama also signaled support for a congressional review of the insurance industry's long-standing exemption from federal anti-trust laws. Some Democrats want the privilege repealed.

The Democratic president's push to revamp the $2.5 trillion U.S. healthcare industry, his top domestic policy priority, received a big boost this week when the Senate Finance Committee approved its version of a reform measure with the support of Republican Senator Olympia Snowe.

Many experts expect some version of a healthcare bill will pass this year, but there are still major disagreements on details, including whether the measure will include a government-run insurance program, the "public option."

"For the first time ever, all five committees in Congress responsible for health reform have passed a version of legislation," Obama said in his weekly radio address. "As I speak to you today, we are closer to reforming the health care system than we have ever been in history."

However, he acknowledged the overhaul still must clear significant hurdles before becoming law. "And there are still those who would try to kill reform at any cost," he said.

For decades, whenever we have tried to reform the system, the insurance companies have done everything in their considerable power to stop us," Obama said.

"And they're earning these profits and bonuses while enjoying a privileged exception from our anti-trust laws, a matter that Congress is rightfully reviewing," he said.


The battle over reform between angry Democrats and health insurers intensified when the industry trade group America's Health Insurance Plans (AHIP) issued a report on Monday, on the eve of the finance committee's vote, saying Senate healthcare legislation would lead to increases in annual insurance premiums of as much as $4,000 by 2019.

Democrats denied the findings, citing a report by the nonpartisan Congressional Budget Office that said the Finance Committee bill would make health coverage affordable to millions of Americans who do not have it and slow the growth of healthcare costs.

Defending insurers' position, AHIP spokesman Robert Zirkelbach said, "We are not trying to stop reform as some have suggested. We want reform that will work and can be sustained, and we are offering solutions to address the concerns."

He said threats to repeal the industry's anti-trust exemption -- the McCarran-Ferguson Act, which kept regulation in the states' hands -- was "retaliation for us speaking out."

Obama maintained, however, that the insurance industry "is rolling out the big guns and breaking open their massive war chest -- to marshal their forces for one last fight to save the status quo."

"They're filling the airwaves with deceptive and dishonest ads. They're flooding Capitol Hill with lobbyists and campaign contributions. And they're funding studies designed to mislead the American people," he said.

Democratic leaders in Congress began work this week on merging the various committees' proposals on healthcare while keeping party liberals and moderates -- and Snowe -- happy.

Senate Republicans demanded Democrats allow more time to debate the details of the sweeping plan. Obama has set the end of the year as his goal for passing a measure that would begin to slow increases in healthcare costs, regulate the insurance market and expand health coverage without increasing the federal budget deficit.

Health insurers' shares dropped this week after news of the finance committee's vote.

Obama vowed an overhaul will go through.

"Every time we get close to passing reform, the insurance companies produce these phony studies as a prescription and say, 'Take one of these, and call us in a decade.' Well, not this time," Obama said. (Editing by Todd Eastham)