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Health Insurers Extend Olive Branch

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Officials of America’s Health Insurance Plans appear to be trying to reopen talks with Senate Democratic leaders in an effort to reshape the healthcare reform legislation passed by a Senate panel earlier this week.

“I am writing to reaffirm our commitment to working with you to achieve the enactment of bipartisan reform legislation this year,” AHIP said in a letter addressed to Senate majority leader Harry Reid (D-Nev.) and to the chairmen of the 2 committees that are managing healthcare reform legislation.

The letter was signed by Karen Ignagni, president and CEO of AHIP, Washington.

She made her comments as the Senate Democratic leadership sought to meld the Senate Finance Committee measure, passed by the panel Tuesday, with legislation passed in July by the Senate Health, Education, Labor and Pension Committee.

The combined bill will be sent to the Senate floor for debate, possibly by the end of next week.

The objective of the legislation, “is to cover all Americans, improve quality, and put the healthcare system on an affordable basis,” Ignani said. She also emphasized that the health care insurance industry “recognizes that we have a responsibility to play a leadership role in identifying strategies that will allow Congress to pass health care reform legislation that will work and that can be sustained.”

Those drafting healthcare reform legislation face the politically difficult problem of mandating penalties for not getting health insurance because one key to reducing health insurance premiums is having as many people pay for health insurance as possible.

The letter offers alternatives to the current bill, including significantly reducing proposed penalties for not getting health insurance.

To ensure public support, the letter suggests alternatives to the current mild penalties for not having coverage such as the late enrollment penalties similar to those that apply under the Medicare Part B and Part D programs. These would be coupled with the loss of tax benefits, such as the removal of the personal tax exemption for those who do not comply with the personal coverage requirement.

These may “offer a fresh approach,” Ignagni said. “By pursuing a package of strategies to boost enrollment during the transition, we can ensure that premiums are lower and build a stable and sustainable system with lower costs over the long-term budget window,” she said.

At the same time, AHIP released a study which it says is “consistent” with a study it released Sunday saying that the current versions of healthcare reform legislation would raise the cost of healthcare insurance for most American families.

That study, by PriceWaterhouseCoopers, was condemned by the White House and Democrats in both the House and Senate.

The latest report, by Oliver Wyman Associates, said that current proposals would increase the cost of health care coverage for families and small businesses above what they would be under current law.

The Oliver Wyman study also projects a 19% increase in individual market premiums, compared to the 28% increase found in the PwC study, AHIP notes.


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