Industry backs GOP stance on uninsured

[Guest guest]

Industry backs GOP stance on uninsured

By Todd Zwillich

WASHINGTON, Apr 19 (Reuters Health) - Officials from one of the

insurance industry's main trade groups Friday endorsed a key but

controversial part of President Bush's plan to extend health coverage to

some of the 40 million Americans who lack it.

The group also rejected aspects of an aid package for the uninsured that

Democratic lawmakers have so far insisted are necessary if they will

support a plan.

Dr. Young, president of the Health Insurance Association of

America (HIAA), said that his group strongly supports encouraging states

to form risk pools in the individual health insurance market. The pools

are seen as a way of easing insurers' cost of covering older and sicker

patients through government subsidies.

Supporting the pools are a key part of President Bush's 2003 Budget

proposal to extend $89 billion in federal tax credits over the next

decade to low income people lacking health insurance as a way to help

them afford coverage. The proposal calls for tax credits of $1,000 for

individuals and $3,000 for families that can be applied to insurance

premiums.

" A risk pool that's well funded and well designed works well, " Young

said at a Capitol Hill briefing.

Republicans in the US House are preparing to begin drafting legislation

to help the uninsured after Congress returns from its Memorial Day

recess in early June, said a spokesman for the House Ways and Means

health subcommittee.

Their proposal is likely to closely reflect the president's budget plan

for the uninsured. Administration officials estimated that the plan

would extend coverage to some 6 million people currently without

insurance.

Many Democrats are wary of risk pools because they see them as a way for

health insurers to avoid having to cover sicker patients. The

state-funded pools, they say, allow companies to accept risk on only the

healthiest--and therefore cheapest--patients.

But Young also rejected a proposal that uninsured persons with the

subsidy would have a guarantee of buying coverage and that insurers

would have to perform 'community rating', or equalizing premiums for all

customers in a single insurance market. Those two points represented a

key Democratic demand in lawmakers' so-far failed attempts to provide

health insurance aid for workers who lost their jobs in the economic

recession.

" The companies don't want community rating because then they have to

compete on service, " said Rep. Fortney (Pete) Stark of California, the

senior Democrat on the Ways and Means health subcommittee.

Many Democrats also object to the size of the tax credits, saying they

will have to be much larger in order to help uninsured people buy

coverage.

Stark said in an interview that it was " nearly certain " that

Republicans, who command a majority in the House, would push through a

package for the uninsured some time this summer. House GOP lawmakers are

also preparing in the coming weeks to act on a controversial Medicare

reform package including a prescription drug benefit.

But he also predicted that the Democrat-controlled Senate was unlikely

to back a similar bill prior to this Fall's elections that could be sent

to the president for a signature.

" My political sense tells me that the 40 million uninsured are no where

nearly as important as the 40 million Medicare beneficiaries, " Stark

said.