America’s Health Insurance Plans has proposed helping individuals and small groups buy affordable health coverage by creating an “essential benefits plan” that would be exempt from state benefits mandates.

The essential benefits plan proposal is part of a package that AHIP, Washington, unveiled today.

The essential benefits plan would be a portable plan that would cover preventive care as well as care for acute and chronic health problems, AHIP says.

“To maintain affordability, the essential benefits plan would not be subject to varying and conflicting state benefit mandates,” AHIP says.

In addition to being available to individuals and members of small groups, the plan “would also be made available to workers who are going through a job transition or are eligible for COBRA, to ensure they are able to maintain health care coverage, AHIP says.

Other AHIP ideas presented today include:

- Offering guaranteed coverage for people with pre-existing medical conditions in conjunction with an enforceable individual coverage mandate. The government would provide tax credits to help families earning less than 400% of the federal poverty level buy coverage.

- Creating tax credits for low-income taxpayers who spend more than a predetermined percentage of their income on health insurance premiums, health insurance deductibles, co-payments and other health care expenses.

- Setting up an advisory group that would come up with recommendations for reducing future growth in health care costs by 30% over the next 5 years. AHIP says holding down the increase in costs could save $500 billion over 5 years.

- Reforming insurance market rules to avoid “duplication of administrative and regulatory responsibilities.” “These reforms must be coupled with initiatives to provide one-stop access to coverage options and clear, consistent information on quality and cost of care,” AHIP says.

- Making every U.S. resident living in poverty eligible for Medicaid.

- Strengthening the Children’s Health Insurance Program.

- Refocusing the health care system on keeping people healthy.

- Adopting health information technology standards.

Sen. Edward Kennedy, D-Mass., chairman of the Senate Health, Education, Labor and Pensions Committee, put out a statement welcoming the AHIP proposals.

“There’s a spirit of optimism about our work to ensure quality, affordable health care for all Americans — and today’s announcement adds to that optimism,” Kennedy says in the statement. “The insurance industry has advanced serious proposals that deserve serious analysis and consideration.”

The California Nurses Association, Oakland, Calif., has attacked the AHIP proposals, calling it a “Marshall Plan for the health insurance industry.”

Rather than subsidizing the health insurance industry “through laws mandating Americans purchase their products, we would be better off either letting them fail, or simply taking them over, as we have been forced to do with other obsolete sectors,” CNA Executive Director Rose Ann DeMoro says in a statement.

The AHIP proposals would do too little to control costs, and it would shift the responsibility for insuring the sickest people to the government, DeMoro says.