Health Insurers Offer Reform Plan

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Savings Promised, But Everyone Would Have To Buy Policy

WASHINGTON DC — After a national "listening tour" that included a Columbus stop, the health-insurance industry today unveiled a reform plan that it says can hold down costs and improve the quality of care.

The proposal, which builds on the concept of mandatory health coverage approved last month by the board of America’s Health Insurance Plans, is part of a bid by the industry to be a major player in the health care reform debate anticipated next year in Washington after Democrat Barack Obama assumes the presidency.

"The nation is on the eve of a national discussion about health care," said Karen Ignagni, president and chief executive officer of America’s Health Plans, at a Washington news conference. "Reducing health care costs, improving quality of care and bringing everyone into the system must be done in tandem to maximize the opportunity for success on all fronts."

And some insurance industry critics were quick to lambaste the industry’s proposal as failing to guarantee adequate standards when it comes to such issues as cancer screenings and the right to a second opinion and not doing enough to address the role insurance plan profits play in rising health costs.

The advocacy group Consumer Watchdog said the insurance industry’s proposal would simply "encourage the industry to demand higher premiums and more taxpayer subsidies, while providing less health care."

Consumer Watchdog wrote a letter to Obama asking him to "oppose the health insurance industry’s self-serving plan detailed today requiring every American to buy junk insurance policies or face tax penalties or other fines. The plan would not limit what insurers can charge or reduce health insurance profit and overhead — the fastest growing component of health care spending," the group charged.

But the insurance industry organization said it believes a federal health care overhaul can reduce the growth of health care spending by 30 percent over the next five years, resulting in a cumulative savings of $500 billion over that period. And it maintains that only 3 cents of every health care dollar goes to insurance industry profits, and that only a total of 13 cents of every health care dollar is for overall administrative costs.

The industry also says it is willing to offer portable health plans to individuals and small businesses, guarantee coverage for people with pre-existing conditions and proposes tax credits to help low and moderate-income working families afford coverage. The insurance industry plan also calls for extending the Medicaid health-care program for the poor to any uninsured American living in poverty. And it calls for expanding the state children’s health insurance program, which Obama and congressional Democrats already are expected to do next year.

Reiterating a position at odds with Obama’s stance, the health insurance industry says its proposal would cover all Americans — but only if everyone is required to buy into a plan.

But Obama’s campaign health care proposal didn’t attempt to immediately offer coverage to all of the estimated 45 million to 47 million Americans lacking insurance, and didn’t mandate that all individuals obtain insurance coverage.

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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