The health insurance industry urged Congress to permit national sales of uniform medical plans exempt from states’ minimum benefit rules as a way to make coverage affordable for small businesses and strapped families.
The standardized health plans and the creation of an advisory panel to examine wasteful spending would curb costs and enable more Americans to obtain coverage, the Washington trade group America’s Health Insurance Plans said at a briefing today. The group speaks for 1,300 managed-care companies, led by UnitedHealth Group Inc. and WellPoint Inc.
This is the second time since the presidential election that the group has offered proposals for overhauling health care without altering the employer-based insurance system. Congress may take up legislation next year carrying out proposals by President-elect Barack Obama and Democratic lawmakers to expand government health programs, subsidize poor families and require insurers to take all applicants regardless of their health.
"We have to collaborate and compromise, and we will,” said James Roosevelt Jr., chief executive officer of the Tufts Health Plan in Boston and a board member of the insurance trade group, at the briefing in Washington. “I was part of a process like this in Massachusetts, and it’s led to an experiment that is succeeding. I’m confident that we can on a national level have serious conversations that lead us to a real solution for all Americans.”
‘Bailout’ for Insurers
Industry critics called the initiative a self-serving “bailout” to protect company profits and autonomy. The proposal doesn’t involve fundamental changes in the way insurers operate and asks the government to pick up more costs, said Richard Kirsch, the national campaign manager for Health Care Now, a coalition of labor unions and activist groups.
“This plan lets them continue to profit on people when they’re healthy and, when people get sick and have high health costs, to push as much of those costs as possible onto the taxpayer,” Kirsch said in a phone interview today.
Nationwide plans would cover basic medical needs for people who seek coverage directly or work for employers lacking health plans, the industry group said. The plans would circumvent state- mandated benefit requirements in the interest of uniformity and efficiency, said Karen Ignagni, the trade group’s chief executive officer. The details of those plans, including what would and wouldn’t be covered, haven’t been worked out, she said.
‘Junk’ Policies
Obama should block any effort to override coverage of services mandated by state legislatures, such as preventive screenings and newborn care, and stop health plans from selling stripped-down “junk insurance policies,” said Consumer Watchdog, a Santa Monica, California-based advocacy group. The insurance trade association should focus on other problems in the health-care system, the consumer group said in an e-mail.
“The plan would not limit what insurers can charge or reduce health-insurance profit and overhead — the fastest growing component of health-care spending,” Consumer Watchdog said in its statement.
In the briefing, Ignagni said Medicaid, the joint federal-state health program for the poor, should simplify eligibility and cover everyone under the federal poverty level rather than apply sliding scales, as occurs in some states. That would expand enrollment in Medicaid managed-care plans, a growing source of revenue for the industry.
$500 Billion Savings
She urged Congress to set a goal of reducing by 30 percent the expected increase in medical spending and assign a public-private advisory group to chart a detailed course on how to accomplish it. That could save $500 billion over five years now spent on wasteful care, including some services ordered out of fear of medical malpractice lawsuits, the trade group said.
The insurers also asked lawmakers to grant tax credits to low-income families who spend a high percentage of income on health care and insurance as a way to reduce bankruptcies caused by medical debts.
Last month, the insurers’ trade group proposed guaranteeing coverage for every American, regardless of medical condition, in return for an enforceable requirement that everyone have a policy. The group didn’t say what penalty should be imposed on those who fail to obtain coverage.
The insurers called for subsidized premiums for moderate-income people in the form of refundable tax credits. They also recommended that families buying coverage on their own get the same tax break as those who receive benefits through employers. The value of employer-provided benefits isn’t taxed. Premiums should be kept stable through a “broadly funded reimbursement mechanism that spreads costs for the highest-risk individuals,” the trade group said.
Seeking ‘Leadership’ Role
“We’re hoping that by offering these proposals early, we can contribute to the development of approaches and legislation,” Ignagni said at the briefing. “Rather than wait and react to proposals, our members definitely wanted to play a leadership role and not shrink from the challenges.”
Obama, who takes office Jan. 20, has selected former Senate Majority Leader Tom Daschle to head the Health and Human Services Department, a person familiar with the matter said last month.
Daschle will work with the Senate Finance Committee, headed by Senator Max Baucus of Montana, and the Health, Education, Labor and Pensions Committee, led by Senator Edward M. Kennedy of Massachusetts. The Democratic senators are developing separate proposals.
Baucus would create government-run insurance exchanges where small businesses and people without workplace benefits could buy coverage. Kennedy’s aides, who haven’t released his plan, said today the insurers’ proposal helped create a “spirit of optimism” about an overhaul.
“The insurance industry has advanced serious proposals that deserve serious analysis and consideration,” Kennedy spokesman Anthony Coley said in an e-mailed statement.
