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HIAA Says Health Insurance Is Affordable

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Individual health insurance is already far more affordable than critics charge and would become even more so if Congress enacts President Bushs proposal to provide tax credits for the purchase of individual coverage, the president of the Health Insurance Association of America says.

There is a lot of misinformation and many inaccurate statements among those who support government-sponsored health insurance that individual coverage is too expensive and President Bushs tax credit proposal would not work, according to HIAA President Don Young, who spoke at a press briefing.

In fact, he says, individual health insurance is already affordable for millions of Americans.

Thomas Wildsmith, policy research actuary for the Washington-based HIAA, says that a survey of 12 member companies, which issued more than one million individual policies, found that monthly premiums for individual health insurance currently average $173 for single coverage and $334 for family coverage.

The premiums vary according to age. For those 19-years-old and under, the average single premium is $82 per month and average family premium is $143 per month.

For those between ages 60 and 64, the average single premium is $304 per month and the average family premium is $519 per month.

If President Bushs tax credit proposal is enacted, he said, the overall average monthly cost would drop to $89 for single coverage and $84 for family coverage, he says.

For those in the age 60 to 64 category, the premiums would be $220 per month for single coverage and $269 per month for family coverage.

Wildsmith also says that many low income Americans are already purchasing individual health coverage. Thus, he says, any argument that tax credits wouldnt work unless they cover the entire premium simply is not true.

Young acknowledges that the survey does not have data on the nature of the individual policies purchased, that is, whether the policies are comprehensive or bare-bones.

He says that individuals have different needs, and the choices they make would reflect the wide range of different policies available.

Wildsmith adds that a tax credit would not only help those without coverage to buy insurance, it would help those with insurance to upgrade their coverage.

Young says he expects Congress to consider tax credits sometime this month.

Under President Bushs proposal, the government would provide tax credits worth $1,000 per adult and $500 per child, up to a maximum per family credit of $3,000, for those without employer-provided coverage to purchase individual health insurance.

Among the sharpest critics of the Bush proposal is Families USA, the consumer group, based in Washington.

“The Bush proposal is an ineffective way to reach Americas uninsured, low income workers,” says Executive Director Ron Pollack.

“The assistance offered is far too little and leaves coverage unaffordable,” he says. “Its like throwing a 10-foot rope to someone at the bottom of a 40-foot hole.”

In other news, the International Insurance Council, the venerable association that focused on eliminating barriers to international trade in insurance, is closing its doors, a victim of its own success.

Gordon C. Stewart, president of the Insurance Information Institute, New York, and secretary to the board of the IIC, based in Washington, says the board made the decision to terminate the association largely because its mission was accomplished.

Stewart says that with the opening of global insurance markets under such initiatives as the General Agreement on Tariffs and Trade, Chinas entry into the World Trade Organization and others, the board looked around and realized there were no more battles to fight.

“The battle was won,” Stewart says.

The issues facing U.S. insurance companies interested in global business today tend to be more market-oriented rather than related to government barriers, he adds.

At the same time, Stewart says, the number of U.S. companies interested in global business has declined.

Some years ago, he says, many insurance companies believed they needed to be global in order to compete.

However, Stewart says, some of these companies then realized the enormous challenge it takes to become a global player and decided to refocus on the domestic market.

Thus, he says, there has been a shake out in the number of global, U.S.-based companies, leaving a few very strong players.

Stewart says that IIC was in an odd situation relative to other trade associations in that it had a limited mission.

IIC was organized in the aftermath of World War II, Stewart says, when many companies emerging from the conflict had restrictive insurance markets. IICs mission, he says, was to open those markets.

With traditional trade associations, he says, one set of issues is replaced by another set. But an organization such as IIC, which as a unique focus, is not able to shift to another set of issues once its mission is accomplished, Stewart says.

IIC worked to open international insurance markets for the full range of insurance products, including life, non-life and pensions.

Reproduced from National Underwriter Life & Health/Financial Services Edition, July 15, 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.