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AHIP Repeats Guaranteed Issue Offer

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Health insurers are reminding lawmakers of their willingness to provide health coverage to all individuals, regardless of health status, as part of a comprehensive health reform plan that requires individuals to have coverage.

Karen Ignagni, president of America’s Health Insurance Plans, Washington, presented AHIP’s health reform proposal, today at a Senate Health, Education, Labor and Pensions Committee hearing on health insurance reform.

The plan, also presented at a Senate Finance Committee hearing in November 2008, calls for investments in health information technology, preventive care and efforts to realign the incentives that now encourage doctors and hospitals to provide more care than necessary.

AHIP member companies are open to providing coverage on a guaranteed-issue basis — if the government prevents antiselection by creating an enforceable requirement that individual consumers have health coverage, Ignagni said.

Consultants at Milliman Inc., Seattle, found that “states that enacted guarantee-issue laws in the absence of an individual coverage requirement saw a rise in insurance premiums, a reduction of individual insurance enrollment, and no significant decrease in the number of uninsured,” Ignagni said, according to a written version of her testimony.

Janet Trautwein, chief executive of the National Association of Health Underwriters, Arlington, Va., suggested that the government require guaranteed access to individual coverage in exchange for state-level organizations protecting insurers against catastrophic risks.

Health insurance market reform also should include efforts to standardize state pre-existing condition rules; improve federal group-to-individual coverage portability provisions; limit insurers’ ability to rescind existing policies; make it easier for employers to help workers buy individual health insurance; and provide new subsidies and deductions to help make individual health coverage affordable, Trautwein said.

If the government does create an individual coverage mandate, the mandate “should not be accompanied by overly rigid coverage standards that would make coverage unaffordable and inhibit private plan design innovations,” Trautwein said. “Each state must be responsible for enforcement of the mandate for its own population. “The United States is too large and diverse a country for such a mandate to work otherwise.”

Katherine Baicker, a health economics professor at the Harvard School of Public Health, warned at the hearing that policymakers should not expect providing health insurance for the uninsured to pay for itself by cutting health care costs.

Baicker, who appeared before the Senate Finance Committee to critique a variety of health reform proposals in July 2008, noted that many view access to the good underlying health insurance — health care — as a right.

Protecting people against the uncertainty of unknown health care expenses also has a great deal of value, and expanding the number of people with health coverage likely would improve the health of the newly insured people, Baicker said, according to her written testimony.

But a “universal health coverage” program probably would not save money by, for example, reducing the likelihood that people would end up getting expensive, preventable medical care, such as emergency room care for the complications of poorly controlled diabetes, Baicker said.

“Having health insurance may lower the costs of ER and other publicly provided care used by the uninsured through better prevention and medical management,” Baicker said. “But empirical research also demonstrates that insured people consume more care (and have better health outcomes) than uninsured people – so universal insurance is likely to increase, not reduce, overall health spending.”

Some assume that getting health care is so unpleasant that people avoid getting care as much as possible, even when the care is free, Baicker said.

But one study found that people who pay nothing for health care consume 30% more care than people with high deductibles consumer, Baicker said.

Links the written versions of the witnesses’ testimony and other health insurance hearing documents are available here.


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