The health care bills being considered in Congress would impose regulations on insurance companies, prohibiting them from denying insurance or cancelling policies based on a pre-existing health condition. Both bills would also require insurance companies to spend money from premiums on health care, not on administrative costs.
Insurance companies agreed to the deal because of a provision that would require most Americans to buy health insurance, which would increase their customer base.
Some say the health care reform movement stalled with the election of Republican Scott Brown to Sen. Edward Kennedy's old Massachusetts Senate seat, and President Barack Obama is holding a televised health care summit on Feb. 25 in hopes of bringing Republicans and Democrats together on some kind of agreement.
A spokesman for the insurance industry said health insurance profits "are well below other industries in the health care sector."
"For every dollar spent on health care in America, less than one penny goes towards health plan profits," said Robert Zirkelbach, spokesman for America's Health Insurance Plans (AHIP). He argued that in 2009, it was spending on hospitals, physicians and prescription drugs that "continued to soar."
Indeed, a recent report by the Centers for Medicare and Medicaid Service (CMS) found that health spending grew 5.7 percent, reaching $2.5 trillion in 2009, even though the overall economy declined by 1 percent. The report pointed to increased spending on hospitals, doctors, and medications as major drivers in the rising cost of health care.