Insurance Reform

Posted Dec. 09, 2008, at 5:30 p.m.

The country’s health insurance industry was praised last week for joining the national debate over universal health coverage. Pledges to give up its ability to reject people with pre-existing medical conditions and its long-standing objection to guarantees of insurance coverage could represent a significant change for the insurance industry. A major stumbling block to health insurance and care reform, however, could be what the industry wants in exchange, perhaps weak requirements for basic coverage.

America’s Health Insurance Plans, an industry group that represents companies that insure more than 200 million, last week unveiled its proposal for remaking the health care system to lower costs and provide health insurance to all Americans.

Much of its plan sounds like Dirigo Health, Maine’s program for reducing costs, improving quality and increasing coverage. The plan, like Maine’s, emphasizes preventative measures as a lower-cost way to address costly and chronic health problems. Like Dirigo, AHIP aims to document the costs and outcomes of medical procedures across the country to help consumers determine what procedures are worthwhile and where best to have them done.

A bigger — and more difficult — problem to solve is slowing or stopping the growth in health care costs.

According to AHIP, health care costs are projected to increase 6.6 percent between 2010 and 2014. Slowing that growth to 4.7 percent would save $500 billion. The group doesn’t say how costs should be decreased — that would left up to a special commission — but it mostly points figures at health care providers, without acknowledging the insurance industry’s role in driving up prices.

The plan would also move the neediest, and therefore most costly, people to government programs or so-called high-risk pools, segregated groups of people who get a lot of health care services. Creating such pools can reduce costs for the rest of the healthier population, but for those in the high-risk pool, insurance costs can become prohibitive, leaving them without coverage and, therefore, access to health care.

The insurance industry must play a productive role in the upcoming debates about improving health care and lowering costs. Ditto for businesses, both large and small, as well as health care providers. The solution will contain change that each of the groups does not like.

The AHIP proposal offers some worthwhile ideas, but much more is needed to reform the system without harming the very people who depend on it.

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