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Obama and Republicans Tussle over Health Care Law's Premium Costs

By Jane Norman, CQ HealthBeat Associate Editor

January 28, 2011 -- Exactly one year ago, Democratic Sen. Al Franken had the unenviable job of urging health care advocates at the annual Families USA conference to keep their spirits up as they contemplated a bleak landscape in Congress for passage of a health care overhaul. It wasn't a celebration but it wasn't a funeral, either, Franken told them.

The scene could not have been more different, when President Obama addressed a cheering, applauding, ecstatic throng at the conference and thanked them for their work in seeing the health care law enacted. "I couldn't be prouder of you," he told them. "This is making a real difference for families across this country as we speak."

Despite the celebration for real this time around, Obama's remarks also came as Republicans in Congress are pushing very hard to repeal, rewrite and defund the law, and attack it specifically on the close-to-home question of health care costs. Republicans and the insurance industry contend the law does little to control premium increases, and they're hoping that message gets through to Americans looking at health insurance bills that never seem to go down.

The administration says that the law indeed will control costs for consumers and businesses across the board—at the same time it expands access to millions of the uninsured and extends new consumer protections. The Department of Health and Human Services (HHS) issued a report to drive home the point using, in part, a 2009 Congressional Budget Office (CBO) letter.

"This law will lower premiums. It is limiting costs," Obama told the conference. "It is reining in the worst abuses of the insurance industry with some of the toughest consumer protections this country has ever known."

As in his State of the Union address, he poked fun at the claims of critics. "You may have heard once or twice this is a job-crushing, granny-threatening, budget-busting monstrosity," said Obama. "That's about how it has been portrayed by opponents. And that just doesn't match up to reality. I mean, this thing has been in place now for 10 months, right?"

Estimates from the Business Roundtable, a group of corporate CEOs, are that the overhaul could save large employers $2,000 to $3,000 per family a year, said Obama, statistics used earlier in the week by administration officials at congressional hearings. And he said that "health reform is part of deficit reform," a line that drew applause, because it will slow cost increases in Medicare and Medicaid. Repeal would "send middle-class premiums up, would force large employers to pay that $2,000 to $3,000 per worker, and shift control of your health care right back to the insurance companies," he said.

Republicans pushed back on Obama's remarks and on the report. Ways and Means Committee Chairman Dave Camp, R-Mich., said that the report "would be laughable if it wasn't so disingenuous." Camp said that if administration officials were interested in reports they should circulate the findings of Centers for Medicare and Medicaid Services (CMS) Chief Actuary Richard Foster, who's predicted that national health care spending will rise under the law. Camp also said the same CBO letter cited by HHS for its report said premiums will increase, because insurance policies people will be required to buy will offer a richer package of benefits.

In addition, Senate Republicans sent out a list of news articles citing highly publicized, double-digit premium increases this year in California, Iowa, Connecticut and Washington. Administration officials say health care costs have been on the rise for years and such proposals are a continuation of the trend.

And Sen. Michael B. Enzi, R-Wyo., the top Republican on the Senate Health, Education, Labor and Pensions Committee, said the HHS report ignored CBO's bottom line conclusion that premiums will rise.

Karen Ignagni, president and CEO of America's Health Insurance Plans (AHIP), said in a statement that the new law will expand coverage to millions of Americans but doesn't address the crisis in health care costs. "Reducing health care cost growth is one of the most important economic challenges facing the nation," Ignagni said.

Obama told the Families USA crowd that the law may need a "tweak," and he's willing to work to correct a "flaw" such as the 1099 tax-reporting requirement. He's also "open to other ideas, including patient safety innovations and medical malpractice reform," he said. Aides say the reference to safety innovations was in connection to reduction of medical errors, which would reduce the number of lawsuits in the first place. Pilot projects funded by HHS are looking at prevention of medical errors.

But as in the State of the Union address, Obama made it clear there's only so far he will go and it doesn't include repeal. "I'm not open to efforts that will take this law apart without considering the lives and livelihoods that hang in the balance," he said.

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