HIAA President: Maintaining Affordability Of Health Insurance Is #1 Challenge

By

Washington

Maintaining the affordability of health insurance is the number one economic challenge facing the health insurance industry, says Donald Young, president of the Health Insurance Association of America.

At a press briefing, Young outlined the legislative issues HIAA will confront this year.

With health care costs increasing at the fastest rate in a decade, Young says, the ball is now in Congress court to avoid enacting legislation that will add to the cost of health insurance and make it even more unaffordable.

Issues such as a patients bill of rights and mental health parity would increase costs significantly, Young says.

Indeed, he says, while much of the attention surrounding patients bill of rights legislation focuses on liability, and whether health care dollars should go to the trial bar, that is only part of the problem.

Both the House and the Senate versions of the legislation (H.R. 2563 and S. 1052, respectively) contain both benefit mandates and administrative requirements that would increase costs, Young says.

One problem, he adds, is that the budget surpluses that Congress wanted to use to finance a range of health care initiatives are now gone.

“The threat is that as public money dries up, lawmakers will be more tempted than ever to impose costly mandates on private health insurers,” Young says.

And the bill will be paid by those who purchase health insurance, he says, who are businesses and workers.

On another issue, optional federal chartering of insurance companies, Young says HIAA is closely following the current debate, but does not yet have a position.

Young says HIAA has long supported state regulation of insurance, but notes that the federal government is becoming more active in health insurance.

Moreover, he says, state mandated benefit laws are troubling and make health insurance more expensive.

Meanwhile, health insurers are giving mixed reviews to President Bushs speech last week outlining his health care agenda for 2002.

In a speech at the Medical College of Wisconsin, Bush discussed the health care proposals contained in his fiscal year 2003 budget, including tax credits for the uninsured, a Medicare prescription drug benefit and a patients bill of rights that avoids “needless litigation.”

“It is really important to remember that we want to help doctors the heal, not encourage lawyers to sue,” Bush says.

Young says Bushs proposal to provide tax credits to the uninsured is a “good first step” towards solving the problem of the uninsured.

“There is no substitute for the employer-based health care system, but those who arent offered coverage through their employers could use the help to buy insurance industry individual market,” Young says.

But he takes issue with the presidents support of a patients bill of rights, which he says is inconsistent with the goal of reducing the number of uninsured Americans.

“At some point, policymakers have to decide whether they want to help the uninsured or enact a patients bill of rights,” Young says. “They cant do both.”

In other news, the Senate approved what is called a “Sense of the Senate” resolution calling for permanent repeal of the estate tax.

The resolution was sponsored by Sen. Jon Kyl, R-Ariz., whose attempt to move legislation repealing the estate tax died along with an economic stimulus package the Senate was considering (see last weeks Dispatch for details).

The vote on the resolution was 56-42. A Sense of the Senate resolution simply expresses the views of the Senate. It has no legislative impact and does not in any way affect the current law.

Finally, industry groups are lining up to support pension reform legislation introduced in the Senate by Sens. Kay Bailey Hutchison, R-Texas, and Trent Lott, R-Miss.

The legislation, S. 1921, incorporates the provisions of the House-passed Retirement Security Advice Act, H.R. 2269, that would allow insurance companies and agents that provide services to employer-sponsored pension plans to also provide investment advice to beneficiaries, subject to strict disclosure requirements.

In addition, S. 1921, contains a variety of new reforms, such as mandatory pension plan diversification, mandatory quarterly statements and protection of plan participants during blackout periods.

Many of these reforms reflect alleged pension plan abuses relating to Enron.

Kathryn Ricard, vice president for retirement and pensions with the American Council of Life Insurers, Washington, says inclusion of the investment advice language in the package gives the legislation a boost, which it may need in the Senate.

“One of the lessons from Enron is the need for plan participants to diversify their retirement savings investments,” Ricard says.

“Diversification is a message that must be stressed to all plan participants, and the investment advice legislation would help get that done,” she says.


Reproduced from National Underwriter Life & Health/Financial Services Edition, February 18, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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