LI religious leaders offer support for Obama reforms

A variety of Long Island religious leaders expressed support for President Barack Obama's national health care reform efforts Wednesday, though some were cautious about the plan and disappointed.

"Changes are needed," the Rev. Albert Hahn, pastor of the Smithtown United Methodist Church, said. "Health care costs need to be managed better, and a lot of Americans are in need of this kind of care and can't afford it."

Rabbi Anchelle Perl, the head of Congregation Beth Sholom Chabad in Mineola, was more cautious about the plan. "Health care reform needs to be done in a balanced way, along a middle ground, so you don't destroy the present infrastructure," he said. "This is a capitalist society."

Following Obama's two telephone conference calls Wednesdayto several religious groups to discuss his health care plan, local religious leaders offered their take on the health plan.

Bishop William Murphy, the head of the Diocese of Rockville Centre, could not be reached for comment. But in a letter he sent to all of Congress last month on behalf of the United States Conference of Catholic Bishops, Murphy said the bishops support "comprehensive health care reform that leads to health care for all, including the weakest and most vulnerable."

Murphy's letter also opposed not treating immigrants or using public funds for abortions. Murphy says abortion goes against church teachings.

Obama's preferences for a health care bill don't include public funding for abortions or health care for illegal immigrants.

Bishop Robert Harris of Grace Cathedral in Uniondale, who said he often is in contact with people with no health insurance, said he is "a little disappointed that the president is scaling back his original proposal." His reference was to the Obama administration signal recently that it may drop the controversial "public option" component from its proposed overhaul of the health care system.

"These are the conservatives who are against this, not the people who voted for Barack Obama," Harris said.

Slow Road to Government Care

There are hints that the Obama administration and Democratic congressional leadership might be willing to negotiate on the inclusion of a government health insurer as part of health-care reform. The most likely alternative proposal, which has been discussed by the Senate Finance Committee, is to establish some system of consumer cooperatives or "co-ops."

While details are sketchy, the basic idea is to subsidize the creation of nonprofit health insurers on a state or regional basis. These supposedly would be run independent of the government and compete with traditional private health-insurance plans.

These government-authorized co-ops would serve no useful purpose. And they would risk the same adverse consequences as a public plan.

Democrats' health insurance proposals already require private insurers to accept all applicants with no pre-existing condition exclusions, at premium rates that do not reflect health status and vary only within a narrow range based on age. These changes guarantee people access to health insurance at rates that would not price the ill or near-elderly out of the market—without creating government-authorized co-ops.

Democrats' proposals expand eligibility for Medicaid and provide significant premium subsidies to buyers with incomes up to 300% or even 400% of the poverty level. These provisions would make insurance substantially more affordable for people with low-to-moderate income—without creating government-authorized co-ops.

Government-authorized co-ops also are not necessary to provide consumers with nonprofit alternatives. Nonprofit mutual insurance companies, most notably many Blue Cross and Blue Shield plans, already offer health insurance in many states. They are dominant players in some states.

Absent taxpayer subsidies or special rules, co-ops would not have any inherent advantage over private health insurers in establishing provider networks, negotiating with providers, and monitoring health-care utilization and fraud. Proposed co-ops instead would require billions of dollars of "start-up" subsidies.

More important, the creation of government-authorized co-ops would entail significant risk of ongoing subsidies by taxpayers (if not by private health-insurance buyers), of substantial private insurance crowd-out, and of eventual conversion to a government-run plan. Like a proposed public plan, government-authorized co-ops would be backed implicitly if not explicitly by taxpayers.

They would not have to hold the amounts of capital that private health insurers hold to back their promises. Government-authorized co-ops would almost certainly not have to pay income or premium taxes that private for-profit and nonprofit insurers must pay.

Although co-ops might initially be required to negotiate their own reimbursement rates with hospitals and doctors, substantial pressure would arise over time for centralized negotiations, with eventual benchmarking off Medicare reimbursement rates.

Compared with a public plan, government-authorized co-ops could simply be a slower road to government health care. The potential benefits are nil; the potential costs are large.

Health insurance stocks dip lower than market

INDIANAPOLIS — Managed care stocks dipped slightly lower than the overall market Wednesday, after insurers received more bad publicity with letters from Congress asking for executive compensation details and other financial information.

Several stocks fell around 1 percent while the broader Standard & Poor's 500 index climbed slightly. Wednesday's performance followed a managed care rally on Monday, after statements from the Obama administration downplayed the possibility of a government-backed public health plan that many investors fear would provide unfair competition to private health insurers.

The stocks have gone through several volatile periods since the health care reform overhaul debate started taking shape earlier this year.

Dozens of insurers received requests for information that included records relating to compensation of highly paid employees, documents relating to companies' premium income and claims payments, and information on expenses stemming from any event held outside company facilities in the past 2 1/2 years.

The requests were made in letters signed by Rep. Henry Waxman, D-Calif., who guided a portion of health care legislation through the House Energy and Commerce Committee last month as chairman, and Rep. Bart Stupak, D-Mich.

Of the largest publicly traded health insurers, only Louisville, Ky.-based Humana Inc. has said it plans to cooperate fully. Others have only said they received the letters.

Stifel Nicolaus analyst Thomas Carroll said the request implies that health insurers are doing something wrong.

"It's further demonizing of the health insurance industry, and it's pushing the stocks back down today a little bit," he said.

Robert Zirkelbach, a spokesman for the trade group America's Health Insurance Plans, dismissed the request as a "fishing expedition." His group and several health insurers have been active contributors to the health care debate.

For instance, Minnetonka, Minn.-based UnitedHealth Group Inc. has suggested ways the government can save more than $500 billion in Medicare spending over 10 years.

America's Health Insurance Plans favors bipartisan reform and has said universal coverage and stronger regulations can protect consumers and make a public plan or co-ops unnecessary.

The industry also has weathered attacks on its profits, and Obama has frequently said a public plan was needed to keep health insurers honest.

This latest information request creates more "headline risk," according to Carroll.

"The managed care industry certainly is not looking good at all from an image perspective, but I don't know that it ever has," he said.