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Health Insurers Plan To Be Active

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Health insurers are planning to play an active role as Congress returns to work this fall, seeking to resolve issues between the federal government and the states, as well as the recurring issue of legal reform.

Karen Ignagni, president of America’s Health Insurance Plans, says the group has been working hard on its advocacy efforts in Washington. Among the major goals of AHIP in Congress, Ignagni says, is passage of legislation in the Senate that would help state high-risk pools by increasing their federal funding. The legislation, known as HR 3204, or the State High Risk Pool Funding Extension Act of 2005, was introduced by Rep. John Shadegg, R-Ariz., and was passed by the House in late July before lawmakers adjourned for the August recess. It is awaiting action in the Senate.

Janet Trautwein, the executive vice president and CEO of the National Association of Health Underwriters, also expresses optimism that the high-risk pool legislation will move through Congress this fall. “We think it looks pretty good,” for the bill, she says, noting that there have been discussions on the Senate side related to what a potential proposal from a conference committee could look like. Also, she says the extra funding for the state pools would be relatively inexpensive, which is important for any bill seeking passage. The legislation is estimated to cost roughly $75 million, which, Trautwein notes, is “not free, but not big by Washington standards.”

Increasing access to health insurance will continue to be a goal of AHIP, Ignagni says, noting recent census figures raising the number of Americans without health insurance coverage to 45.8 million in 2004. Ignagni says these numbers should help to “refocus Congress’s attention,” and that AHIP would continue to work toward the enactment of tax credits that would help the uninsured be able to afford coverage.

Long term care is widely being viewed as the issue of the future as the baby boom generation grows older, and Ignagni says AHIP is pushing Congress to act on legislation that would enable states to partner with LTC insurers to provide more access to encourage the purchase of long term care coverage. Currently, only four states, California, Connecticut, Indiana and New York, are engaged in such partnerships. In these partnerships, a consumer purchases an LTC policy, and once the policy benefits are exhausted, Medicaid becomes the payer for the policyholder’s LTC expenses. The partnerships also allow the policyholder to keep personal assets equal to the benefits paid by the policy, rather than being forced to “spend down” assets to become Medicaid eligible. Legislation to facilitate more states establishing these partnerships, S. 1569, was introduced in July by Sen. Larry Craig, R-Idaho, and Sen. Evan Bayh, D-Ind., and is awaiting action by the Senate Finance Committee. NAHU’s Trautwein says this legislation also benefits from the “very important” factor of not having a high price tag. “It’s not an expensive thing to do.”

Ignagni says AHIP will also press for expansion of health savings accounts that would increase their flexibility, including allowing the use of an HSA to pay for early retirement coverage premiums.

Health insurers also have supported the concept of giving tax credits to help encourage individuals without coverage to become insured, but the costs of doing so could damage that proposal’s chances. “As much as we support the credits,” Trautwein says, “we can’t see where the money is coming from.”

Trautwein also points to expected legislation from Sen. Mike Enzi, R-Wyo., that would re-examine the way health insurance is regulated by the states. Trautwein says that although the congressional calendar might prevent the bill from moving through this fall, it will likely garner a great deal of attention as it will be designed to propose an alternative to association health plans.

So far, 2005 has been a successful year for legal reform advocates with the passage of class-action reform and bankruptcy reform. Ignagni says AHIP will continue to work toward another main goal of the legal reform movement, medical liability reform. Efforts to reform the medical liability system, most notably through establishing caps for non-economic “pain and suffering” damage awards, have succeeded in the House in recent years only to fail to gain traction in the Senate. However, Ignagni says the “context is maturing” for passage of medical liability reform this year, as more and more people are affected by the increasing costs of health care due to litigation and insurance costs.

Noting that 10 cents of every dollar spent on health care goes toward the practice of defensive medicine, in which doctors call for tests that might not be needed to safeguard against potential litigation, Ignagni says members of Congress who have staved off earlier medical liability reform efforts are starting to hear from their constituents about the effects litigation is having on health care costs. That, she adds, “makes it hard for members to say no.”

Perhaps one of the more important issues for health insurers in Washington will not be heard in Congress this fall at all, however, according to Trautwein. As the Centers for Medicare and Medicaid Services prepare for the rollout of the prescription drug benefit established by the Medicare Modernization Act, health insurers are among the “huge number of organizations” that she says are taking part in the effort to publicize the details and procedures of the drug benefit.

Will press for legislation to help state high-risk pools by increasing their federal funding


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