Insurers propose universal, centralized healthcare

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Insurers propose universal, centralized healthcare

Several consumer groups criticize the early bid by America's Health

Insurance Plans, a trade group that fought an overhaul in the 1990s,

to take an active role in Obama's effort to revamp the system.

By Noam N. Levey December 4, 2008

Reporting from Washington -- Sharpening the emerging debate over how

to reshape the country's healthcare system, the major group

representing insurers unveiled a proposal Wednesday for covering all

Americans in a more centralized insurance market.

The plan offered by America's Health Insurance Plans, a trade group

representing companies that together insure more than 200 million

people, comes a decade and half after the industry helped kill the

last major healthcare reform campaign -- pushed early in the Clinton

administration.

And Wednesday's proposal for a form of universal insurance coverage

reflects the intensifying interest among groups like insurers,

businesses and healthcare providers in having an active role in

shaping the reform effort.

Democratic lawmakers and President-elect Barack Obama have said that

upgrading the country's healthcare system will be a priority next year.

" The nation is on the eve of a national discussion about healthcare.

This comes around once every generation, " said Ignagni,

president of AHIP. " We are coming to the table with a specific set of

proposals. We believe reform needs to be comprehensive, and it needs

to happen now. "

On Capitol Hill, aides to Sens. M. Kennedy (D-Mass.) and Max

Baucus (D-Mont.), who have said they plan to push sweeping healthcare

legislation next year, also said the AHIP plan would help advance the

effort.

But swift criticism of the proposal from several consumer groups

Wednesday also highlighted how contentious the debate over systemic

changes to the healthcare system could become.

AHIP would require all Americans to get coverage, a new mandate that

Obama rejected during the presidential campaign.

In exchange for such a mandate, insurers would agree to longtime

demands from consumer advocates that they no longer reject people with

preexisting medical conditions.

The group is urging Congress to set up an advisory organization to

identify ways to cut the increase in healthcare costs by 30% over the

next five years.

It also backs expansions of Medicaid and the State Children's Health

Insurance Program, which Democrats plan to tackle soon after the new

Congress convenes in January.

Potentially most controversial, however, is the insurance industry's

call for a new " portable health plan " that would not be subject to the

minimum coverage standards set by individual states.

Many states require insurers to cover myriad services such as cancer

screenings and obstetric care. Some also guarantee patients the right

to an independent medical review if an insurer denies coverage.

But the standards can vary widely from state to state, a longtime

complaint of insurers and some businesses that have to deal with 50

different sets of regulations.

AHIP's Ignagni said Wednesday that the new portable coverage, which

the group calls an " essential benefits plan, " would make it easier for

small businesses and workers to keep their insurance.

" We want to create more-flexible products for small business but that

also provide the . . . safety net for workers, " she said.

That approach is encouraging, said Austin, who manages

legislative affairs in Washington for the National Federation of

Independent Business, an influential group that represents about

300,000 small businesses nationwide.

" There needs to be a discussion about the broad variance of mandates

across state lines, " Austin said. Like the insurers, NFIB played a key

role in defeating Clinton's healthcare plan in the early 1990s.

Many consumer groups, however, see moves to change the state-based

system of insurance regulation as a way to weaken the health coverage

that residents of states like California now are guaranteed.

The groups also fear that a mandate requiring Americans to get

insurance could force people to buy unaffordable coverage unless state

or federal authorities can regulate how much insurers charge. AHIP's

proposal does not address regulation of premiums.

Several consumer groups sharply attacked the insurance group's plan on

Wednesday.

" The health insurance industry's vision of healthcare reform lets them

keep charging whatever they want and increase their profits while

sticking families and taxpayers with high costs, " said Kirsch,

national campaign manager for Health Care for America Now.

Levey is a writer in our Washington bureau.

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