Health Insurers Dangle Guarantee as Mandate Bait


As a new administration prepares to tackle health care reform, the health insurance industry is offering a few suggestions.

America's Health Insurance Plans (AHIP), which represents about 1,300 companies covering more than 200 million Americans, says its members would be willing to guarantee coverage for individuals with preexisting medical conditions in exchange for a government mandate that all individuals purchase health insurance.

AHIP's board of directors issued the proposal after conducting a nationwide “listening tour” on health care during which many Americans raised concerns about the lack of coverage for preexisting conditions in the individual insurance market.

But to make guaranteed coverage a reality, the federal government will need to require that individuals purchase coverage and use mechanisms such as an insurance coverage verification system, an automatic enrollment process, and some type of enforcement, the group said.

When coverage is guaranteed and there is no mandate to have insurance, individuals tend not to purchase insurance until they get sick, which drives up costs, said Robert Zirkelbach, a spokesman for AHIP. For example, a study conducted on behalf of AHIP by Milliman Inc. found that in many states that implemented guarantee issue or community rating policies in the 1990s, there had been a rise in insurance premiums and a reduction in individual insurance enrollment. In addition, some health plans had left the individual insurance marketplace.

Another aspect of the AHIP proposal aims to increase the affordability of health insurance plans on the individual market. The group suggests lowering costs for consumers through refundable tax credits. In addition, it proposes tackling the overall cost of medical services by expanding the use of preventative services, conducting comparative effectiveness trials for medications and devices, and reforming the medical liability system.

The AHIP proposal also supports expanding eligibility for Medicaid and the Children's Health Insurance Program. “No one should fall through the cracks of our health care system,” said AHIP President Karen Ignagni in a statement. “Universal coverage is within reach and can be achieved by building on the current system.”

Affordability will be critical to the success of any proposal, said Ron Pollack, executive director and vice president of Families USA, a nonprofit, nonpartisan organization focused on health care affordability. “It's the ball game,” he said. “How can you require someone to do something they simply can't achieve?”

Families USA supports the idea of a mandate for health insurance coverage, Mr. Pollack said, but only if it includes adequate subsidies and help for those who can't afford to purchase coverage on their own.

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