In Weekly Address, Obama Blasts AHIP's New TV Ad

President, Analysts Criticize Pushback From Health Insurance Trade Group Over Pending Legislation

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NEW YORK (AdAge.com) -- President Barack Obama on Saturday accused the health-insurance industry of using deceptive advertising to sabotage health-care reform, taking aim in his weekly radio address at a new report and new ad produced by America's Health Insurance Plans, the industry trade group.

In his radio address, President Obama said insurance companies are funding studies designed to mislead the American people.
In his radio address, President Obama said insurance companies are funding studies designed to mislead the American people. Credit: White House Photo/Pete Souza
"For decades, whenever we have tried to reform the system, the insurance companies have done everything in their considerable power to stop us," Mr. Obama said. "In fact, the insurance industry is rolling out the big guns and breaking out their massive war chest to marshal their forces for one last fight to save the status quo. They're filling the airwaves with deceptive and dishonest ads. They're flooding Capitol Hill with lobbyists and campaign contributions. And they're funding studies designed to mislead the American people."

The president's address comes on the heels of some aggressive moves last week by AHIP. After remaining mostly silent on the issue for months, the group decided to enter the fray at the last moment after seeing the debate turn from health-care reform to health-insurance reform.

The Washington trade group released an analysis by PricewaterhouseCoopers the night before the Senate Finance Committee approved a 10-year, $829 billion overhaul of the American health-care system. The study claims that provisions in the proposed bill will cause health-care costs to increase faster and higher than they would under the current system. A second report also warned that potential legislation would mean higher insurance premiums.

AHIP also funded a $1 million TV ad buy in at least six states, with a 30-second spot claiming senior citizens will see their Medicare benefits cut under the proposal.

'Smoke and mirrors'
AHIP President-CEO Karen Ignagni released a statement following the president's comments Saturday, but did not directly address Mr. Obama's claim. "Health plans strongly support comprehensive, bipartisan health care reform. Reform needs to work and deliver on the promise made to the American people that everyone will have quality, affordable coverage," Ms. Ignagni said. "Two studies released last week found that some of the current proposals will significantly increase health care costs for families and employers across the country. We believe these issues can and must be resolved."

During his weekly address, the president also took the opportunity to take a jab at conservative Fox News Channel. "Of course, like clockwork, we've seen folks on cable television who know better waving these industry-funded studies in the air," Mr. Obama said. "We've seen industry insiders and their apologists citing these studies as proof of claims that just aren't true. They'll claim the premiums will go up after reform, but they know the non-partisan Congressional Budget Office found that reforms will lower premiums in a new insurance exchange, while offering consumers protections that will limit out-of-pockets costs and prevent discrimination based on pre-existing conditions."

Mr. Obama added, "It's smoke and mirrors. It's bogus. And it's all too familiar. Every time we get close to passing reform, the insurance companies produce these phony studies as a prescription and say, 'Take one of these, and call us in a decade.' Well, not this time."

Independent analysts have criticized both insurance industry reports and the AHIP ad.

Kaiser Health News, an editorially independent news service that is part of the non-partisan health-care policy research organization Kaiser Family Foundation, wrote that "The AHIP ad leaves out some important context. The $100 billion in proposed cuts would occur over 10 years, not immediately, and would amount to a 7% reduction compared to current law. AHIP, in arguing that Medicare Advantage is being unfairly targeted, says that about a quarter of the $404 billion in spending cuts in the Senate Finance bill would come from the Medicare Advantage programs. Enrollees in the plans, however, would hardly get the harsh treatment the ad suggests. At worst, they'd end up getting the same benefits as people in the traditional Medicare program."

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