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.”
Congressmen Ask Geithner To Resign
Hopefully, no one told U.S. Treasury Secretary Timothy Geithner that pitching the Obama administration’s financial reform plan to Congress was going to be painless. During a heated Joint Economic Committee hearing on Thursday, U.S. Republican Reps. Michael Burgess (Texas) and Kevin Brady (Texas) called on Geithner to step down, telling him that his work is not adequately serving Americans.
“Conservatives agree that as point person, you failed,” Brady argued. “Liberals are growing in that consensus as well. Poll after poll shows the public has lost confidence in this President’s ability to handle this economy... for the sake of our jobs, will you step down from your post?”
Geithner responded to Brady by saying he’s privileged to serve in his position, but did not give the Congressman an answer. Responding to Brady’s concerns over unemployment and the types of jobs lost, Geithner remarked, “Almost nothing in what you said represents a fair and accurate perception of where this economy is today.”
The purpose of Geithner's visit to the Hill, his second in as many days, was to encourage lawmakers to include four elements that he argued, “are critical to a strong package of [regulatory reform] legislation.”
Among them: Forcing non-banks who act as banks to be subjected to the same safeguards as recognized monetary institutions; accountability that includes a proposed council that will ensure that banks, regardless of size, work on a level playing field; a more capable financial system that will better absorb shocks and failures and adoption of a “no institution should be considered too big to fail” motto, which Geithner explained would be enforced by the government under “resolution authority.”
“This emergency authority, what we call resolution authority, has to be designed to facilitate the orderly demise of a failing firm...not ensure its survival,” he said. "Any risk of loss, must be recouped from the largest institutions, in proportion to their size. The financial industry, not the taxpayers, need to be on the hook.”