|
House Speaker Nancy Pelosi said Democratic lawmakers are considering a windfall profits tax on health insurers to help finance an overhaul of the nation’s medical system.
The Morgan Stanley Health Care Payer Index of 11 companies fell as much as 3.9 percent, led by WellPoint Inc., the largest health insurer by enrollment. The intraday drop in the index was the biggest in three months.
Democratic lawmakers also scaled back a proposed tax on high-income Americans, according to Representative Sander Levin of Michigan, and the new insurer tax would be one way of making up revenue for that.
Pelosi told reporters the idea of a new tax on insurers was "very preliminary" and that she asked Ways and Means Committee Chairman Charles Rangel to determine if "that is something we can put in the mix" of revenue-raising ideas.
Insurance companies and other health-care industries such as drugmakers have "much more they can put on the table to bring down the cost," said Pelosi, of California.
Lawmakers are considering the biggest changes in the U.S. health-care system since the 1965 creation of Medicare, the government program for the elderly. They are trying to cover more of the 46 million uninsured people and rein in health-care costs that currently account for a sixth of the economy.
Lowering cost
House leaders are working to bring the cost of their plan to less than $900 billion over 10 years. A rival measure set for a vote in the Senate Finance Committee would cost $829 billion.
The House had been depending on a graduating surtax starting on couples earning at least $350,000 a year to raise $544 billion. The new proposal would increase that threshold to at least $1 million for couples, bringing in $460 billion over the next decade, said Levin.
Lawmakers are looking at a variety of other tax increases to make up the difference, including a Senate proposal to limit tax benefits from flexible-spending accounts, an employer- provided benefit used by workers to pay for out-of-pocket medical expenses, Levin said.
The windfall profits tax came up in a meeting with House leaders last night and again today "as a trial balloon," without any details, said Representative Gerald Connolly, a Virginia Democrat. The idea would be "very popular" among lawmakers because the legislation will bring new clients for insurers who should in turn offer savings, Connolly said.
‘More profitable’
By expanding the number of insured Americans, insurance companies will become "even more profitable because we are going to create more customers for them," Connolly said.
A spokesman for the insurance industry said the idea was misguided and based on "misinformation."
"What windfall profits? The insurance industry profits are in line or less than almost any other industry," Robert Zirkelbach of the Washington-based trade group America’s Health Insurance Plans said in an telephone interview. "There is a lot of misinformation out there about" profits of health plans. "Historically, health-plan profits have been 3 percent, much less than other industries."
Zirkelbach said such a levy, along with a proposal by the Senate Finance Committee to tax so-called Cadillac plans, would result in higher premiums, undermining the goal of health-care reform.
UnitedHealth Group Inc., the largest insurer by sales, had a 3.8 percent profit margin last year. For WellPoint, it was 4.1 percent and Aetna Inc. of Hartford, Connecticut, the third- largest insurer, 4.5 percent, according to Bloomberg data.
Raising premiums
Asked about the idea, House Republican Leader John Boehner told reporters that "Americans who have policies today will end up paying higher premiums to pay for this tax" and "there are no ifs ands or buts about it."
Indianapolis-based WellPoint dropped $3.29 to $44.37, while Minnetonka, Minnesota-based UnitedHealth dropped $1.22, or 4.9 percent, to $23.83 as of 2:31 p.m. in composite New York Stock Exchange trading.
In the Senate, health-care overhaul legislation cleared its latest obstacle yesterday when the Congressional Budget Office said a Senate finance panel measure would reduce the federal budget deficit while insuring millions more people.
'Make our decision'
House Democratic leaders are working to merge health- insurance overhaul plans passed by three committees into a single version to be considered on the House floor. Pelosi said she will send a draft health plan with three versions of a government-run insurance option to the CBO for cost estimates.
"When we get the response back from the CBO, then we’ll make our decision as to what legislation we bring to the floor," the speaker said. "I want to be fair and give the most opportunity to all of the options that the members have put forth."
Her spokesman, Brendan Daly, said the draft legislation will be sent to CBO today or tomorrow.
Democrats have to decide whether to peg doctor and hospital reimbursements under the government-run plan to Medicare, the government insurance program for the elderly, or require the plan to negotiate rates. Medicare-tethered rates would save $110 billion and negotiated rates would save $25 billion, according to an earlier Congressional Budget Office estimate provided to the House.
How to structure the public plan has divided the Democratic caucus and neither side has the votes to win a 218- vote majority of the House, lawmakers said.
James Rowley
Source: Bloomberg.com October 2009
|
