Hoping to reduce the number of uninsured, America’s Health Insurance Plans, on Dec. 19, unveiled a series of recommendations for states to increase coverage rates in the individual market.
“We are clearly on the platform of wanting to get all Americans covered,” says AHIP President and CEO Karen Ignagni. The recommendations, she adds, are designed to help those states that want to enhance already existing high-risk pools for healthcare coverage or are considering universal coverage options.
The recommendations were designed to ensure that individuals would have guaranteed access to healthcare coverage regardless of their income or prior conditions, Ignagni says. Additionally, she notes, the recommendations would establish mechanisms to increase transparency and protect consumers, such as third-party review for rescission decisions.
The first part of the recommendations, which AHIP says states can implement now, is the establishment of a guaranteed access system for those uninsured individuals with high expected medical costs. If an individual does not qualify for that plan, health plans would then provide that individual with coverage on a guarantee issue basis and a cap on premiums of 150% of the standard rate.
“Health insurance plans believe that everyone should have access to affordable health care coverage regardless of their health status or income,” says Don Hamm, President and CEO of Assurant Health and chair of AHIP’s Access Subcommittee. “We look forward to working with states to achieve this goal immediately.”
For insurers, the AHIP proposals call for operational reforms designed to increase consumer confidence, including a limitation of pre-existing condition exclusions, the restricting of rescission actions, and establishing a new review process for those decisions. “That will give individuals the assurance that they can have their issues reviewed by a third party,” Ignagni says.
While states examine new and different ways of increasing the number of insured, Ignagni says it is important that they examine the shortcomings of past efforts. AHIP commissioned a study of prior guaranteed issue laws by Milliman, Inc., which found that they had the opposite effect from what was intended, resulting in increased premiums, lower individual enrollment and a flight from the state by health insurers. “It’s very important, as we go forward, that we not repeat the experience of the past that didn’t work,” Ignagni says.
To ensure that the systems being proposed actually work, AHIP recommended several steps states can take to ensure that individuals actually obtain coverage. Specifically, the proposal recommends that states develop a coverage verification system, enforce requirements for purchasing and maintaining coverage, establish an automatic enrollment process for those who don’t obtain coverage on their own, provide subsidies for low or moderate income individuals or families and ensure the funding for such programs from different sources.
Ignagni says that AHIP wants “to be part of the discussion” as states look at increasing the ranks of the insured, and that the group has been working to help those states better evaluate their options. To that end, she says AHIP has developed “an actuarial model” that will allow for an assessment of how different proposals could affect a state’s population. “We are now going to be able to model just about anything a state might want to do,” she says.
With the presidential election less than a year away, health care, and the uninsured, has been a major issue on the campaign trail. Ignagni says it would be “presumptuous” for AHIP to try to promote its recommendations to the candidates, but adds that she hopes candidates “on both sides of the aisle” would consider the proposal and “would see this as an industry that wants to take responsibility, wants to take action, and wants to take part in the discussions.”
While seeking to address those who lack health insurance coverage, AHIP also released a report finding that those who do obtain their coverage in the individual market find it accessible and affordable.
According to a survey conducted by AHIP, almost 90% of individuals who went through the application process were offered coverage, with 89% of those offers at standard or preferred rates. Premiums for single coverage averaged $2,613 nationwide for the 2006-2007 period, with rates for family coverage averaging $5,799.
The most commonly purchased coverage option was preferred provider organization/ point-of-service coverage, which was the choice for 78% of single policies and 66% of family policies in force. Ten percent of single policies and 23% of family policies were provided along with a health savings account.