Last week the health insurance industry informed U.S. Senate committees considering ways to overhaul the country’s health care system, that insurers are willing to accept more aggressive regulation of their premiums, their benefits, their underwriting practices and “other activities,” reports the New York Times “Insurers Offer to Soften a Key Rate-Setting Policy.” The concessions were documented in letters signed by the presidents of the major trade groups that represent most of the industry, Karen M. Ignagni of America’s Health Insurance Plans and Scott P. Serota of the Blue Cross and Blue Shield Association.
In the letter, the industry said it was willing to devise a new business model that would no longer charge sick policyholders, or those with a medical history that could lead to illness, higher premiums than healthy policyholder pay. Instead, they would spread the cost equally over both groups.
In return, the industry wants Congress to adopt a plan that requires health insurance coverage for everyone but cease its consideration of a government-run health insurance plan. And they still want to retain the right to base premiums on age, place of residence and family size.
While we would like to applaud the industry for finally considering what it should have done all along, we are still suspicious of the motives behind this change of heart. In truth, not much has changed.
The industry, fearing the loss of millions of policyholders to a government plan, is offering its own systemic overhaul in order to sign up millions more subscribers under a federal mandate. By retaining the right to base premiums on criteria other than health, a little creative accounting could place insureds right back into the same dilemma of unaffordable insurance they thought they were being rescued from.
Who will keep the industry honest? State regulators around the country are forcing companies to reinsure policyholders whose coverage was rescinded on mere pretext after they became ill. How much more time and taxpayer resources would regulators expend in the future ensuring carriers follow through on their promise to equalize premiums?
Now is not the time for Congress to cave in to insurance demands that will only solve part of our country’s healthcare problems. In addition to equalizing premiums, the industry should standardize its offerings and commit to restructuring claims-handling processes to make them transparent, streamlined and less burdensome on its policyholders. Congress should also insist that carriers return to making benefit decisions based on reliable medical diagnoses rather than the subjective evaluations of insurance adjusters charged with cost-control.
Insurers want a quick fix so they can get back to business as usual. We urge Congress to see beyond this sham compromise and use its leverage to ensure health insurance changes that will serve consumers well for decades to come.