America’s Health Insurance Plans today introduced a major coverage proposal as witnesses convened for a Senate Finance Committee hearing on health care reform.

AHIP, Washington, is starting by proposing that insurers agree to offer coverage to applicants with pre-existing conditions if the government also imposes a well-enforced requirement for individuals to own health coverage.

AHIP also is calling on policymakers to create a refundable, advanceable health insurance tax credit for individuals and working families; give purchasers of individual health coverage the same tax breaks that purchasers of group coverage get; and create a system for spreading the risk involved with insuring individuals with health problems.

AHIP will be making other recommendations concerning issues such as affordability, accessibility and quality of care in the next few weeks, AHIP says.

The new proposal builds on a series of recommendations the group began offering in 2006.

“No one should fall through the cracks of our health care system,” AHIP President Karen Ignagni says in a statement about the recommendations. “Universal coverage is within reach and can be achieved by building on the current system.”

The Blue Cross and Blue Shield Association, Chicago, also announced its support for universal coverage efforts, endorsing a combination of a guaranteed issue requirement along with a requirement that individuals own health coverage.

That kind of combination would “enable insurers to offer coverage to everyone regardless of their health status–without the unintended consequence of premium increases,” Scott Serota, the president of the association, says in a statement. “With everyone covered through an effective individual mandate, insurance can function as intended and spread the risk over a broad and representative population, and thereby avoid the risk of only those who need insurance purchasing coverage.”

As AHIP was announcing its plan, witnesses were testifying at the Senate Finance Committee hearing that the Obama administration should continue to make health finance reform a top priority, despite the troubles facing the economy.

“We recognize the significant challenges in addressing the economic problems of our country,” said Andrew Stern, international president of the Service Employees International Union, Washington. “But we also believe we have a once in a lifetime chance to address the economic insecurity of too many Americans by responding to the urgent need to address our nation’s health care crisis.”

Supporting health care reform may seem imprudent at a time when Congress has added $700 billion to the federal budget deficit, but some reforms could improve the quality of health care while reducing federal spending on health care, according to Amitabh Chandra, an economist from Harvard University.

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, also emphasized the role of health care costs in driving up government spending.

When it comes to grappling with health finance issues and general economic issues, the government needs to “walk and chew gum at the same time,” Baucus said.