Insurers have a healthcare plan

WASHINGTON —  Sharpening the emerging debate over how to reshape the country’s healthcare system, the major group representing insurers unveiled a proposal Wednesday for covering all Americans in a more centralized insurance market.

The plan offered by America’s Health Insurance Plans, a trade group representing companies that together insure more than 200 million people, comes a decade and half after the industry helped kill the last major healthcare reform campaign -- pushed early in the Clinton administration.

And Wednesday’s proposal for a form of universal insurance coverage reflects the intensifying interest among groups like insurers, businesses and healthcare providers in having an active role in shaping the reform effort.

Democratic lawmakers and President-elect Barack Obama have said that upgrading the country’s healthcare system will be a priority next year.

“The nation is on the eve of a national discussion about healthcare. This comes around once every generation,” said Karen Ignagni, president of AHIP. “We are coming to the table with a specific set of proposals. We believe reform needs to be comprehensive, and it needs to happen now.”

On Capitol Hill, aides to Sens. Edward M. Kennedy (D-Mass.) and Max Baucus (D-Mont.), who have said they plan to push sweeping healthcare legislation next year, also said the AHIP plan would help advance the effort.

But swift criticism of the proposal from several consumer groups Wednesday also highlighted how contentious the debate over systemic changes to the healthcare system could become.

AHIP would require all Americans to get coverage, a new mandate that Obama rejected during the presidential campaign.

In exchange for such a mandate, insurers would agree to longtime demands from consumer advocates that they no longer reject people with preexisting medical conditions.

The group is urging Congress to set up an advisory organization to identify ways to cut the increase in healthcare costs by 30% over the next five years.

It also backs expansions of Medicaid and the State Children’s Health Insurance Program, which Democrats plan to tackle soon after the new Congress convenes in January.

Potentially most controversial, however, is the insurance industry’s call for a new “portable health plan” that would not be subject to the minimum coverage standards set by individual states.

Many states require insurers to cover myriad services such as cancer screenings and obstetric care. Some also guarantee patients the right to an independent medical review if an insurer denies coverage.

But the standards can vary widely from state to state, a longtime complaint of insurers and some businesses that have to deal with 50 different sets of regulations.

AHIP’s Ignagni said Wednesday that the new portable coverage, which the group calls an “essential benefits plan,” would make it easier for small businesses and workers to keep their insurance.

“We want to create more-flexible products for small business but that also provide the . . . safety net for workers,” she said.

That approach is encouraging, said Amanda Austin, who manages legislative affairs in Washington for the National Federation of Independent Business, an influential group that represents about 300,000 small businesses nationwide.

“There needs to be a discussion about the broad variance of mandates across state lines,” Austin said. Like the insurers, NFIB played a key role in defeating Clinton’s healthcare plan in the early 1990s.

Many consumer groups, however, see moves to change the state-based system of insurance regulation as a way to weaken the health coverage that residents of states like California now are guaranteed.

The groups also fear that a mandate requiring Americans to get insurance could force people to buy unaffordable coverage unless state or federal authorities can regulate how much insurers charge. AHIP’s proposal does not address regulation of premiums.

Several consumer groups sharply attacked the insurance group’s plan on Wednesday.

“The health insurance industry’s vision of healthcare reform lets them keep charging whatever they want and increase their profits while sticking families and taxpayers with high costs,” said Richard Kirsch, national campaign manager for Health Care for America Now.

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