Oct. 13 (Bloomberg) -- Senate Finance Committee Chairman Max Baucus fought to hold together an industry coalition in support of revamping U.S. health care after insurers waged a late attack on his panel’s proposal.

The Montana Democrat’s committee is set to vote today on a plan to curb rising medical costs and cover tens of millions of uninsured Americans at a cost of $829 billion over 10 years. A health-insurance industry study, released two days ago, found the plan would more than double premium costs.

Doctors, medical-device makers and one of two hospital groups still voiced support for overhaul efforts after the trade group America’s Health Insurance Plans released its study Oct. 11. Democrats hold 13 of the finance panel’s 23 seats. Baucus said last week he has the votes to pass the measure.

The American Medical Association “will stay constructively engaged in the legislative process to ensure that the final bill improves the system for patients and their dedicated physicians,” said James Rohack, president of the Chicago-based group, the largest organization for doctors.

Advamed, the trade association for device makers including Abbott Laboratories and Johnson & Johnson, “supports broad- based health care reform that will ensure all Americans have access to quality, affordable health care,” Advamed spokeswoman Wanda Moebius said in an e-mail.

White House Agreement

Doctors and device makers are among the five groups that joined insurers on a White House stage in May to pledge support for a health-care overhaul. Drug manufacturers, hospitals and a union also participated in the agreement, brokered with the Finance Committee as well.

Senate leaders were wooing Olympia Snowe of Maine, who is viewed by Democrats as the one Republican on the panel who may support the measure. Baucus delayed a vote for months while trying to win Republican support. Health-care accounts for one- sixth of the U.S. economy. President Barack Obama said Oct. 10 that the effort at a revamp is at a “historic moment.”

The medical association and Advamed said previously they have disagreements with measures before Congress, as Democratic lawmakers try to advance Obama’s top domestic priority: extending insurance coverage to tens of millions of Americans while controlling the increase in health-care costs.

The measure from the finance panel, the last of five congressional committees to consider an overhaul proposal, received a boost last week when the Congressional Budget Office gave the $829 billion cost estimate. Republicans and some Democrats had voiced concern that the legislation would cost too much and widen the federal budget deficit.

Limiting Deductions

The finance panel’s version is the only one to exclude the choice of a government-run health plan to compete with private insurers as a way to foster competition and hold down costs. The industry opposes the so-called public option.

The finance panel measure would tax insurers on their most- expensive plans and limit deductions for executive pay at companies including WellPoint Inc., the Indianapolis-based insurer that is the largest by enrollment.

Doctors have complained about provisions in the legislation, including a measure that would penalize physicians in the top 10 percent of spenders. Device makers “vigorously oppose” a tax provision in the Senate Finance bill that would require them to pay $40 billion annually, Moebius said.

The American Hospital Association considers the finance panel’s measure to be “an important bill containing much we support,” said Rich Umbdenstock, president of the trade group, in a posting on its Web site. “But achieving higher coverage targets is vital.”

Hospitals Complain

The Federation of American Hospitals, the Washington group for investor-owned hospitals including Tenet Healthcare Corp., declined to comment yesterday. The hospitals, which agreed to contribute $155 billion in savings over 10 years toward an overhaul effort, previously said not enough new people would be covered by the finance committee’s version.

The measure “does not meet the standard of coverage that our agreement is based on,” said Chip Kahn, president of the federation, in an interview last week.

America’s Health Insurance Plans, based in Washington, complained that the tax provisions in the Senate Finance bill would send coverage costs soaring. The industry’s report from two days ago found that the measure would raise the cost of private health insurance by 111 percent by 2019, or $4,000 for a family. Current law would raise costs by 79 percent, it found.

“We have a lot of experience at the state level with taxes and have a lot of experience with how they directly add to the cost of care,” said Karen Ignagni, the group’s chief executive officer, in a conference call. “What is the impact with all of these factors interacting in the future? It will get all benefit plans to a higher level faster.”

White House Meeting

The issue of executive compensation for health insurers was raised at a meeting last week between Ignagni and White House officials, Dan Pfeiffer, White House Deputy Communications Director, said in an e-mail.

Ignagni met Oct. 7 with National Economic Council Director Lawrence Summers and Nancy-Ann DeParle, director of the White House Office of Health Reform. An amendment to the Senate Finance Committee bill would limit tax deductions for pay of top insurance-company executives.

“This has nothing to do with the report that was released,” said by Robert Zirkelbach, a spokesman for Ignagni’s group.

‘Other Stakeholders’

Ignagni suggested that other health-care industries and professionals could do more to bring down the costs of an overhaul, without offering specifics.

The industry would like to see the number of Americans covered by overhaul legislation rise closer to 100 percent. The Senate finance panel legislation would cover 94 percent of all Americans, the Congressional Budget Office said.

The industry commissioned the study from the consulting and accounting firm PricewaterhouseCoopers LLP because of “concern about the workability of the legislation,” Ignagni said.

The White House and congressional Democrats fired back.

“I was disappointed to see that the health-insurance industry had contrived a report like this at the last minute, right on the eve of a historic vote,” DeParle said yesterday on PBS’s “Newshour with Jim Lehrer.” The study was “selective” and “ignores some key policies,” such as the creation of health-insurance exchanges to save costs, she said.

‘Impediment’ to Reform

Senator John D. Rockefeller, a West Virginia Democrat on the Senate finance panel, dismissed the report as “misleading” and said it underscored the need to have a public insurance option to compete with private insurers.

“The industry stands today as the greatest impediment to real health-care reform,” Rockefeller said in a statement.

The overhaul measures pending in Congress share some common ground. They require that Americans get insurance, with varying penalties for failing to do so. They also encourage greater use of preventive care, electronic records and research on the effectiveness of treatments. Under all the plans, insurers would have to accept new clients, regardless of preexisting conditions.

To contact the reporters on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net; Lizzie O’Leary in Washington at Loleary2@bloomberg.net.

Last Updated: October 13, 2009 08:05 EDT