Insurance companies continue to lobby for and publicly endorse an overhaul of the U.S. health-care system, yet Congress is increasingly moving against the industry’s interests.

That disparity has left many wondering if insurers will actually back a bill.

“We have proposed to completely change the way our industry does business,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s top lobbying group.  Though, he said, “the current proposals do not do enough.”

The industry lobby and top insurer WellPoint (WLP) have released separate studies, each charging that Congressional Democrats’ proposals will increase health-care costs. 

House and Senate leaders have assembled two proposals that create a government competitor and require companies to offer more coverage. Yet neither brings enough new customers to the industry to gain insurers’ support.

Zirkelbach said lawmakers have “gutted the mandate” that would require Americans to purchase insurance. Instead, lawmakers have made it cheaper to choose paying a penalty for passing on insurance rather than actually buying the basic Congressionally mandated insurance plan.  The latest House version creates a 2.5% penalty on a taxpayer’s income if he or she fails to obtain health coverage.  The Senate Finance Committee’s bill imposes a $750 for individuals.

Mark Wagar, president and CEO of Empire BlueCross BlueShield, said the mandate is “well, intentioned.” But Wagar believes the mandate has been watered down by legislators who think “that would somehow help people of modest income if they removed the penalties or delayed them or reduced their size.” In reality, according to Wagar, weaker mandates “actually makes the coverage they may someday have to buy more expensive. And it makes it more expensive for everybody else.  So you have to restore a mandate.”

Insurance companies are looking for near-universal coverage and a wide customer base.  In exchange, they’ve offered to end lucrative practices like dropping customers when they become sick and denying coverage based on preexisting conditions.

On top of what they call a weak mandate, insurers face billions in new taxes and fees, limits on what they can charge older customers, and the controversial government competition known as a “public option.”

Naturally, they want Congress to weaken or remove these provisions.

Liberal Democrats say insurance companies want the benefit of tens of millions of new customers without sacrificing to pay for expanding coverage – leaving taxpayers to subsidize their business. They say complying with industry requests would equal “ultimate corporate giveaways” and create “not health care” but “insurance care.”

Democrats, including president Obama, have slammed the insurance industry for its criticism of Congressional proposals, and they say a government-run insurance option is the best way to reduce health care costs.

Yet the industry continues to lobby and run ads in support of “bipartisan health care reform.”

One industry lobbyist speculated that slight changes to current proposals, especially stronger mandates, could bring significant profit to insurance companies.  The lobbyist also said attacking the reform effort would create a villain for Democrats to use to pass an overhaul. 

Despite the recent progress (both House and Senate proposals are nearing full floor debates), Congress will continue to wrangle over the issue for months. That should leave plenty of opportunity for all interested parties to influence billions of dollars in their direction.