Monday
Oct262009
Health Insurance Lobby Worried About Direct Costs Of Reform
Monday, October 26, 2009 at 4:25PM
by Julianne LaJeunesse- University of New Mexico
Officials from various health care groups agreed on Monday that controlling costs and tackling health coverage for Americans with pre-existing medical conditions is going to require the masses. The issues were debated at a forum hosted by House Health Care Caucus Chairman U.S. Rep. Michael Burgess (R-Texas), who said that the the goal of the discussion was to figure out “how to affect [healthcare reform] without interfering with people’s freedoms and their rights in the process.”
President and CEO of America’s Health Insurance Plans Karen Ignagni started off by saying that “we as a community support reform.” Ignagni, whose organization represents over 1,300 companies that sell health insurance, added that her industry would like to guarantee coverage to all Americans, would like to end pre-existing condition limitations and exclusions, end gender differentiation, and no longer require health status ratings.
However, she argued that without both young and elderly Americans in the insurance pool, reform will make the system worse, citing unsuccessful examples of state mandated insurance as the basis for AHIP’s conclusion. She suggested that in addition to looking at mandated insurance, Congress should also address budget and fairness questions within reform.
“To what extent should people, who have no choice but to be in the pool, subsidize folks that decide to wait until they absolutely need coverage to get in?” asked Ignagni. “That’s a societal question, it’s a fairness question… and it’s a very important question… [and] the third issue is the budgetary imperative.”
Former Congressional Budget Office Director Doug Holtz-Eakin also raised fiscal questions about the Senate and House bills, saying neither will bend the health care cost curve.
“The entitlement that’s set up in the House program grows at 8 percent a year as far as the eye can see… faster than this economy will grow, faster than tax revenues will grow and thus is a fiscal risk in addition to not being a step forward in health care reform,” Holtz-Eakin said. “Oddly enough, the Senate bill, that was delivered by the Senate Finance Committee, also has an entitlement that grows at 8 percent per year…and thus fail[s] the fundamental test of lowering the growth rate of health care costs.”
Holtz-Eakin said that the health insurance industry could achieve a better business model if it adopted intervention practices such as prevention and early disease detection, which he said “would pay off over a life cycle.” He added that a business model that does so would reward quality.
On the issue of costs, Janet Trautwein, CEO of the National Association of Health Underwriters, was less open to removing pre-existing conditions without a more diverse pool of insured people.
“People with those pre-existing conditions use more health care…if we have only sick people in the pool, then we have defeated our purpose of affordability. And that is why we have a problem with the way in which pre-existing conditions may be removed from policies today.”
Officials from various health care groups agreed on Monday that controlling costs and tackling health coverage for Americans with pre-existing medical conditions is going to require the masses. The issues were debated at a forum hosted by House Health Care Caucus Chairman U.S. Rep. Michael Burgess (R-Texas), who said that the the goal of the discussion was to figure out “how to affect [healthcare reform] without interfering with people’s freedoms and their rights in the process.”
President and CEO of America’s Health Insurance Plans Karen Ignagni started off by saying that “we as a community support reform.” Ignagni, whose organization represents over 1,300 companies that sell health insurance, added that her industry would like to guarantee coverage to all Americans, would like to end pre-existing condition limitations and exclusions, end gender differentiation, and no longer require health status ratings.
However, she argued that without both young and elderly Americans in the insurance pool, reform will make the system worse, citing unsuccessful examples of state mandated insurance as the basis for AHIP’s conclusion. She suggested that in addition to looking at mandated insurance, Congress should also address budget and fairness questions within reform.
“To what extent should people, who have no choice but to be in the pool, subsidize folks that decide to wait until they absolutely need coverage to get in?” asked Ignagni. “That’s a societal question, it’s a fairness question… and it’s a very important question… [and] the third issue is the budgetary imperative.”
Former Congressional Budget Office Director Doug Holtz-Eakin also raised fiscal questions about the Senate and House bills, saying neither will bend the health care cost curve.
“The entitlement that’s set up in the House program grows at 8 percent a year as far as the eye can see… faster than this economy will grow, faster than tax revenues will grow and thus is a fiscal risk in addition to not being a step forward in health care reform,” Holtz-Eakin said. “Oddly enough, the Senate bill, that was delivered by the Senate Finance Committee, also has an entitlement that grows at 8 percent per year…and thus fail[s] the fundamental test of lowering the growth rate of health care costs.”
Holtz-Eakin said that the health insurance industry could achieve a better business model if it adopted intervention practices such as prevention and early disease detection, which he said “would pay off over a life cycle.” He added that a business model that does so would reward quality.
On the issue of costs, Janet Trautwein, CEO of the National Association of Health Underwriters, was less open to removing pre-existing conditions without a more diverse pool of insured people.
“People with those pre-existing conditions use more health care…if we have only sick people in the pool, then we have defeated our purpose of affordability. And that is why we have a problem with the way in which pre-existing conditions may be removed from policies today.”
Reader Comments (3)
I am an insurance agent and I have been stuck in the situation of very expense cobra or small group insurance because of pre-existing health conditions and no individual plans that are fully underwritten will write me and my wife because she is a diabetic and I have 2 titanium plates in my back from a surgery 1 1/2 years ago. We are talking about $1300 to $3000 per month for a family of 4. The only way to make the public option fair is to make the health insurance mandatory for everyone and if you opt out then you pay the equivalent to what the premium with an insurance company would be for that age of a person so that no one gets a free ride. Just like mandating Auto insurance in a State, but with one exception if you do not have proof the IRS or some government agency needs to automatically take out this fee just like they would take out Social Security taxes otherwise there is not way the insurance companies can underwrite without pre-existing clauses.
It is odd how people think it is fair to charge someone the same thing even if it is known they will consume more. The average per-capita cost associated with diabetes in 2007 was $6649. Is it fair to know your wife will consume that much health care, but expect to pay the same as someone who would not?
The average health insurance premium for a family in 2008 was $12680 a year. The $1300/month then means it is $2920 more per year for you to get coverage with your pre-existing conditions that will cost in excess of $6000 a year.
It is one thing to want pre-existing conditions to be excluded from cost calculations, but please don't claim this is to promote fairness. I support it, but I definitely know it isn't fair in the slightest.
There are also less intrusive means to increasing the pool than a mandate with penalty. Re-insurance, enrollment windows, phased coverage for pre-existing conditions, and many other approaches have already proven to work elsewhere, while government mandates have actually caused premiums to increase at over twice the national average when implemented.
OK to set the record strait unlike the picture that your trying to paint of us people with pre-existing conditions ( I am a diabetic myself) trying to get a free ride at the cost of the "healthy" Let me make clear we definently still have to pay for our care. Just a quick overveiw of how the industry groups people at least in Pennsylavanna. You have "healthy", then smokers , the the rest of us with pre-existing conditions. I use "healthy" in quotations because these people may or may not truely be healthy. What do I meen by this -- simply put you are paying the same weather you are the ultimate model of a healthy lifestyle as the people that sleep with anything and everything along with those that drink 4 or 5 cases of beer a day till it catches up with them. The next group of people are smokers, these people enjoy the same benifits as the healthy with only a slight increase in premiums yet still affordable. If they traded their cigs inplace of premium payments the cost of there habit would easy cover the increased cost in premuims. Lastly is this group know as "pre-existing conditions". Let me say there is no diferentiation between anyone in this catogory. So someone born with a heart defect is in the same boat as that person that was a fast food adict.First there needs to be that differention not everyone is in this boat do to desisions we made. Is is right or fair to deny folks thats only medical crime is existing. Is it right or fair the industry sees it fit that if you choose to progressively destroy yourself you can milk the system as long as your in it because of the decision to deliberatly destroy your health. This opposed to someone being damned because their mother decided to smoke while pregnant and the child now has breathing and heart problem from birth. someone that can deliberately trash their life can have affordable coverage while they choose to destroy their health as opposed to a heredity issue. Lastly someone that deliberatly destroys their life as oposed to someone thats a victem of circumstances beyond their control. we want to talk about pre-existing conditions killing the system - why not throw all the smokers in our pool. that way all the "healthy" people really would be paying for them selves and the "unhealthy" would be weeded out rather quickly. I find it amazing that smokers are the only group of pre-existing folks that hold a covented place of still being able to get affordable care with only a minumal increase in premiums that would easily be covered by giving up a case of cigs. Its amazing that with insuance companies getting kickback money from tobaco industry that since they can double dip they turn their heads to this class of people. Even worse is ones desision to smoke can agivate problems in all 3 groups but thats fine. Should I also introduce in the picture that we folks that work pay the medical bills for those that can't on a daily basis anyhows thru our taxes. The idea of averaging out premiums amoung everyone in reality does create a fair even ground because those that use still need to pay up for the useage not just the premuims. I personally like the idea that with my income off $1000 a month and my average medical expenses being 800+ a month that with some help maybe that # will come down a bit. To put this in perspective let me tell you rent is $325 a month -- can we see a problem yet? [ In fairness the $800 a month represents a "medical discount plan", 2 insulins, test strips, lancets, needles, and the total cost of dr. office visits and labwork pertaining to diabetic management. This number does not include suport meds for blood presure or choestrol nor does it take into consideration if I get sick. I do not do flu vacines, nor have I had my eyes checked or anyother services like that. I was diagnose type 1 when I was 28 because I don't fit a type 2 profile. I am average build and work keeps me rather active. I have a family history on both sides with diabetes, heart and cancer. The cholestrol is a preventitive measure and haven't gotten hit with cancer yet. Not sure if that helps to bring the picture into focus or not.]