Aetna Fights Public Health Policy as Industry Offers A Concession
Williams, in testimony today at a Senate panel in Washington, also restated the industrys support for requiring that people buy insurance. The industrys trade association, Americas Health Insurance Plans, told the panel that it would phase out setting individual premiums based on an applicants medical condition if everyone obtained coverage.
President Barack Obamas budget called for a $634 billion, 10-year plan to help the 46 million Americans without health insurance. A proposed public health plan to compete with private insurers has been one of the most contentious issues in discussions about how to spend the money, as companies and Republicans say it would stifle innovation and create unfair cost advantages.
“On an aggregate level, commercial payers incur approximately $89 billion more in costs than they would if public and private payers all paid equivalent rates,” Williams told the Senate Health, Education, Labor & Pensions Committee. “Expanding the use of low public payment rates would mean expanded cost-shifting for our health-care system.”
Williams said a new public plan would “most likely” use rates in Medicare, the U.S. government program for the elderly and disabled. Those rates are lower than what private companies pay to health-care providers, he said, and costs are transferred to make for “underpayments” in government programs.
Guarantee Coverage
The industry group, based in Washington and representing companies such as Hartford, Connecticut-based Aetna and UnitedHealth Group Inc. of Minnetonka, Minnesota, and the BlueCross BlueShield Association, the Chicago-based industry group for 39 companies, said in a letter today they “could guarantee issue coverage with no pre-existing condition exclusions and phase out the practice of varying premiums based on health status in the individual market.”
That would depend on “enacting an effective, enforceable requirement that all Americans assume responsibility to obtain and maintain health insurance,” according to the letter, to the Health and Finance committees.
In November, Americas Health Insurance Plans offered to guarantee coverage for everyone, regardless of pre-existing medical conditions, as long as everyone was required to have insurance. The proposal also called for the government to subsidize premiums for moderate-income people. Todays proposal goes a step further by ending differences in premiums based on illness.
“While we support transitioning to a reformed system in which health-status-based rating is no longer used, rating flexibility based on age, geography, family size and benefit design is needed to maintain affordability,” according to the letter.
Potential Deal Breaker
Obama supports a public coverage plan modeled on Medicare as a way to provide more people with health care and reduce costs. The president has said he recognizes concerns about that approach among insurers and Republican opponents. The top Republican on the Senate Finance Committee, Senator Charles Grassley of Iowa, called the proposal last week a “deal breaker.”
“We need to change the business model and how private insurers compete to take care of people when theyre sick and not just to avoid them,” Pollitz said. “Given the track record on that is sparse, its very helpful to have a public health plan for that purpose.”