Health Insurance Air War Begins

The insurance industry declared war on the President's health care efforts on Sunday.  Now the bombing’s begun. ABC’s Teddy Davis has the details: The insurance industry is now on the air in multiple states attacking Democratic health reform proposals as bad for seniors, according to an independent ad tracker. The ad does not focus on yesterday’s methodologically questionable report by PriceWaterhouseCoopers. Instead, it focuses on the impact to seniors of proposed cuts to Medicare Advantage. “Is it right to ask 10 million seniors on Medicare Advantage for more than their fair share?” asks the ad’s narrator. “Congress is proposing more than $100 billion in cuts to Medicare Advantage. The nonpartisan Congressional Budget Office says many seniors will see cuts in benefits.” Democrats have targeted Medicare Advantage for cuts because the private insurance companies which administer the program receive 14 percent more per patient than traditional Medicare. The insurance industry is correct, however, in claiming that seniors on Medicare Advantage receive various extra benefits such as vision, hearing, and dental in addition to certain cost-sharing arrangements not available under traditional Medicare. Independent experts say that seniors on the Medicare Advantage program could lose some of those benefits, or face higher premiums, if the government reduces payments to insurers.  Evan Tracey, the head of the independent Campaign Media Analysis Group, the ad tracker which observed the insurance industry’s new spot, says the ad signals that there may be another “big wallet” coming into the television ad war over health care reform. “Anything they have done before this Medicare Advantage spot was more or less cheerleading health care reform,” said Tracey whose firm has detected the ad on the air in Colorado, Louisiana, and Pennsylvania. As seen in the embedded video, the ad is also airing in Missouri. Up until Sunday, when the ad started running, President Obama and congressional Democrats had succeeded in keeping the insurance industry at the bargaining table with the promise of tens of millions of new customers. The insurance industry grew nervous, however, that the Finance bill does not do enough to bring healthy young people into insurance risk pools. Although the Finance bill which was approved earlier today includes a requirement that all adults carry insurance, members of the Finance Committee adopted an amendment during mark-up by Sen. Olympia Snowe, R-Maine, and Sen. Chuck Schumer, D-N.Y., which postpones and reduces penalties on people who do not comply with the individual mandate. The Congressional Budget Office estimates that the number of legal nonelderly residents with insurance coverage would rise from 83 percent now to 94 percent over the next decade under the Finance bill. Karen Ignagni, the chief lobbyist for the insurance industry, said Monday that insurers cannot afford to stop discriminating on the basis of pre-existing conditions if participation rates do not get into the “high 90s”. While Democratic strategists would prefer it if the insurance industry were still on the sidelines, Democrats are hoping that the insurance industry’s 11th hour decision to fight reform and issue a skewed report will succeed in rallying Democrats behind President Obama’s top domestic priority, including, possibly, some version of a government insurance option. UPDATE: Ad Airing in Six States A source familiar with the insurance industry’s ad buy confirms that the Medicare Advantage spot is airing in six states: Louisiana, Colorado, Missouri, Nevada, New Mexico, and Pennsylvania. The states were selected to target the constituents of Sen. Mary Landrieu, D-La., Sen. Michael Bennet, D-Colo., Sen. Claire McCaskill, D-Mo., Senate Majority Leader Harry Reid, D-Nev., Sen. Jeff Bingaman, D-N.M., and Sen. Arlen Specter, D-Pa.