HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Thursday, November 20, 2008

Health Insurance Companies See Writing on Wall

Robert Pear of The New York Times continues a story demonstrating health insurance companies apparerent new acceptance of future health care reform.  He writes,

The health insurance industry said Wednesday that it would support a health care overhaul requiring insurers to accept all customers, regardless of illness or disability. But in return, the industry said, Congress should require all Americans to have coverage.

The proposals, put forward by the insurers’ two main trade associations, have the potential to reshape and advance the debate over universal health insurance just as President-elect Barack Obama prepares to take office.  In separate actions, the two trade groups, America’s Health Insurance Plans and the Blue Cross and Blue Shield Association, announced their support for guaranteed coverage for people with pre-existing medical conditions, in conjunction with an enforceable mandate for individual coverage.  In the absence of such a mandate, insurers said, many people will wait until they become sick before they buy insurance. . .

The new position taken by the insurance industry — the industry that helped sink President Bill Clinton’s plan for universal health coverage in 1994 — could ease the way for passage of such legislation.  But the industry’s position differs from that of Mr. Obama in one significant respect. Insurers want the government to require everyone to have and maintain insurance. By contrast, Mr. Obama would, at least initially, apply the requirement only to children.  . . . 

Asked on Wednesday for reaction to the insurance industry’s proposals, Tommy Vietor, a spokesman for the Obama transition team, said, “We are declining comment.” Mr. Vietor cited Mr. Obama’s view that “we have only one president at a time.” . . .

Donald G. Hamm Jr., president of Assurant Health, explained why the industry thought an individual mandate must be coupled with any ban on such underwriting practices.  “In the individual market, people can choose whether or not to apply for coverage,” Mr. Hamm said in an interview. “If they know they can obtain coverage at any time, many will wait until they get sick to apply for it. That increases the price for everyone.”  Insurers say that is just what happened in several states that prohibited insurers from turning down applicants on the basis of their health status. . . .

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