Insurers push back against the Finance Committee's softened individual mandate penalties

Hospitals and insurance companies are not happy with amendments to the Senate Finance Committee's health bill that softened penalties on individuals who don't comply with the mandate to purchase insurance.

The Wall Street Journal: "The Senate Finance Committee could vote late this week on a sweeping bill designed to expand health-insurance coverage. Senators refining the legislation last week narrowed the scope of a new requirement that all Americans carry health insurance out of concern it penalized people who can't afford to buy it." As a result, some interests are concerned. "The changes mean the new mandate would apply to two million fewer people, largely those with lower incomes. Hospitals say that leaves too few people covered under the bill -- a shortfall that could undermine a cost-cutting pledge by the industry. In July, the hospital industry agreed to swallow $155 billion in government payment cuts over the next decade to help fund expanded coverage of the uninsured." Insurance spokespeople say the maximum penalty for not carrying insurance for a family is only about 15 percent of the average health insurance premium. The Congressional Budget Office estimated that an earlier version of the Finance measure would ensure insurance coverage for 91% of Americans. When the CBO releases its updated estimated later this week this percentage is expected to be lower (Adamy and Hitt, 10/6).

The Associated Press/The Boston Globe: "That would raise premiums for everyone else, since Congress' health care overhaul would also require insurers to take all applicants. 'People will drop coverage and those who stay in would see rate shock,' Karen Ignagni, president of America's Health Insurance Plans, the insurance industry trade group, said in an interview Monday." White House budget director Peter Orzag said there's a trade-off with costs and getting more people covered (Werner, 10/5).

CongressDaily: "If CBO determines fewer people will have insurance under the modified proposal than Baucus' original mark, which stood at 94 percent of Americans, the deal could be in jeopardy. The uninsured often seek care in emergency rooms, leaving hospitals with a high uncompensated care burden" (Edney, 10/6).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.