July 15, 2009 / 8:21 PM / 10 years ago

UPDATE 2-Democrats press for HMO fees to fund health reform

(For a TAKE A LOOK on healthcare, click on [ID:nN07323916]) (Adds new support from other lawmakers in paragraph 10)

By Kim Dixon and Donna Smith

WASHINGTON, July 15 (Reuters) - A group of Democrats on the tax-writing Senate Finance Committee on Wednesday called for health insurers to pay fees worth up to $100 billion over a decade to help pay for the overhaul of the U.S. healthcare system.

The proposed fees are among the options being discussed by the committee, Senator Charles Schumer told reporters at a briefing with fellow committee Democrats Debbie Stabenow, Robert Menendez and Jay Rockefeller.

Insurers are among the last segment of the healthcare industry that have not pledged to help fund the estimated $1 trillion reform that aims to rein in soaring costs and provide medical coverage to millions of the uninsured.

Drugmakers have committed $80 billion and the hospital sector has offered $155 billion, both over a decade.

“We need the insurance companies to step up to the plate,” Schumer said. “It makes sense that private health insurers, who are going to gain 40 million customers in a reformed system, should pay their fair share.”

He said details on how such a fee could be structured were still in flux, but a congressional source said they could be based on revenue or market share.

About 46 million individuals lack health insurance in the United States, and a major goal of reform is to add many of these people to the rolls.

A spokesman for America’s Health Insurance Plans, the industry’s lobbying group, said insurers have already agreed to meaningful reforms such as guaranteed coverage for pre-existing health conditions, adding taxes would undermine affordability.

Schumer said an effort would be made to prevent insurers from passing the costs along to consumers.

Republican Olympia Snowe, a finance committee member working closely with Finance Committee chairman Max Baucus, said, “I would not have a problem with” the insurance tax idea. Democratic Senator Kent Conrad, another finance panel member, later said he could back the idea, noting that drugmakers agreed to some levies as part of their $80 billion offer.


One health care analyst noted the fee proposal could be significantly trimmed, and it is unclear how much support it will garner.

“The fact that these senators are asking for dollars doesn’t mean they will get them; there will be a long road ahead and that figure could come down,” said Ipsita Smolinski, an analyst at Capitol Street in Washington, which advises investors.

Schumer said the idea could be more acceptable to some senators than other proposed revenue raisers.

The lawmakers also renewed their call for a government insurance plan that would compete with private insurers, a proposal that has been a tougher sell in the Senate than the House of Representatives.

The senators are trying to put pressure on the insurance industry and influence Baucus, who is trying to craft a bipartisan bill focused partly on paying for the healthcare overhaul.

The Senate’s health committee on Wednesday passed its version of the healthcare bill on a party-line vote.

Earlier this week, a source familiar with talks between the insurance industry and the finance panel said discussions were centered on savings of about $100 billion over a decade.

The biggest U.S. health insurers include UnitedHealth Group (UNH.N) (UNH.N), WellPoint Inc WLP.N, and Aetna Inc. AET.N (Additional reporting by Donna Smith and Jackie Frank) (Editing by Vicki Allen)

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