Sunday, November 19, 2006

Health Insurance Industry Proposes Near Universal Coverage

Ahip Here's an interesting article from the New York Times from earlier last week about the health care industry's take on health care reform.  It's been a busy week for posting, so I'm just getting to it now. 

At first this proposal struck me as somewhat strange, but I now see how the America's Health Insurance Plans (AHIP) proposal could provide greater coverage for more Americans while at the same time keeping the health insurance industry profitable:

The health insurance industry proposed an expansion of Medicaid and new tax breaks on Monday with the goal of guaranteeing coverage for all children in three years and for virtually all adults within 10 years.

The industry proposed these steps, estimated to cost $300 billion over 10 years:

¶The federal government and the states should expand Medicaid to cover all adults with annual incomes under the poverty level, including single adults who cannot now qualify. The poverty level is $16,600 for a family of three and $9,800 for an individual.

¶The Children’s Health Insurance Program, financed jointly by the federal government and the states, should, at a minimum, cover all children in families with incomes less than twice the poverty level.

¶Congress should create tax incentives for people to establish “universal health accounts.” People could take tax deductions for amounts contributed to such accounts. They could use the accounts to pay premiums for any type of health insurance. The federal government would help pay premiums for people with incomes below certain levels.

¶Congress should establish a tax credit for individuals and families who buy health insurance for their children. The credit would be $200 a child, up to a maximum of $500 for a family. It would be available to families with incomes up to three times the poverty level — up to $60,000 for a family of four.

It's good to see that those who provide health insurance are thinking about how to solve the current health care mess.  But for the same reasons I am skeptical of Health Savings Accounts (HSAs) and other consumer-driven health care options (see this post), count me as skeptical about these universal health care accounts too.

It is also not lost on me that the industry is not just being magnanimous and is instead proposing changes that will likely allow these companies to be more profitable in the future (e.g., by having more people buy health insurance for their children).  Indeed, "[t]he industry did not say how its proposals would be paid for; did not recommend any budget cuts or tax increases; and did not say what, if anything, it would do to slow the growth of health costs."

In any event, health care needs fixing and let these proposals help stir up debate on this crucial issue of our times.


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In response that this proposal some how would increase profits, doesn't address health care costs and lacks specifics about funding.

This series of proposals has been well received by conservative and progressive groups alike in Washington and the 50 states. It's not surprising then that Americans across the political spectrum support every AHIP proposal.

Regarding how much it costs. Every American who visits the doctor or hospital or who purchases health care coverage already pays for the costs of uncompensated care. The question isn't "how much WILL this cost?" The question is, "how much is the problem costing us now?" Studies suggest that uncompensated care costs billions of dollars each year. Much of those costs are reflected in health insurance premiums for those who have coverage. By expanding the risk pool and providing access to coverage to the uninsured, this proposal can help pay for itself by significantly reducing the costs of uncompensated care.

To see how your health insurance premium is spent and how health insurance plan tools and techniques are successfully cutting costs without sacrificing the quality of care, read PricewaterhouseCoopers' study, The Factors Fueling Rising Healthcare Costs 2006. There is more that can be done, including medical liability reform.

Finally, the profit question. The AHIP proposal calls for a substantial investment in government programs like SCHIP and Medicaid. It's hard to argue how that proposal is self-serving. In fact, we believe it's socially responsible.

We want this proposal to jump start a national debate on access. We are pleased that so many people, including the Workplace Prof Blog, is addressing the issue and we certainly welcome everyone's feedback.

Posted by: AHIP Fact Checker | Nov 21, 2006 8:30:59 AM

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