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Insurance Carriers Favor Guarantee Issue Plans

March 25th, 2009 – Health insurance carriers reminded Senators of their support for guarantee issue health insurance coverage, regardless of pre-existing conditions, in conjunction with a government mandate for universal health care for all Americans.

Karen Ignagni, President of the health insurance industry lobbying group, America’s Health Insurance Plans (AHIP), presented AHIP’s health reform proposal to a Senate Committee hearing on health insurance reform. The plan also addresses the health services sector to help improve efficiencies in preventative care, treatment by doctors and hospitals and information technology.

In addition to addressing the cost drivers responsible for increasing health insurance premiums, AHIP reminded the Senate that having an enforceable mandate on health insurance coverage is key to the success of the program. They pointed out that states that require insurers to cover everyone regardless of pre-existing conditions have some of the highest health insurance premiums in the nation, which only adds to the problem of the uninsured in America.

Janet Trautwein, CEO of the National Association of Health Underwriters, said, “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.”

“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.”

Harvard Economics Professor Katherine Baicker painted a rather dismal picture of the economic impact of universal health care. Many people believe that the reason their health insurance premiums are so high is because they are subsidizing the cost of treating the uninsured. That is part of the problem, but the effect is often overstated.

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

The most optimistic expectations for seeing any results from health reform would be some time next year.  Read the Witness Testimonies from the hearing or watch a video of the hearing.

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