Insurers like Obama health plan, with reservations

by Lesley Politi on December 11, 2008

Insurers like Obama health plan, with reservations

WASHINGTON (AP) — The insurance industry embraced many of President-elect Barack Obama’s ideas for better health care coverage Wednesday, though it opposes a key piece of his plan to require employers to help pay for that coverage.

The industry said it opposes Obama’s plan to require medium-sized and large employers to contribute to their workers’ health coverage or pay a percentage of their payroll for operation of a national, public insurance plan.

“Given the economic disruption in the country, … we don’t think now is the time to recommend an employer-mandate,” said Karen Ignagni, president and chief executive officer of the largest trade group for insurers, America’s Health Insurance Plans.

The trade group’s recommendations for health care reform were unveiled at the National Press Club.

Another point of contention will be the role of coverage mandates put in place by the states. The industry wants a national plan for small businesses that provides “essential services,” such as primary care and emergency care, but excludes certain services that insurers say unnecessarily increase monthly premiums.

Consumer groups respond that state protections for the individual and small group markets help guarantee meaningful health insurance coverage.

But James Roosevelt, president and CEO of Tufts Health Plan, said the industry should not have to cover unproven treatments. As an example, he cited bone marrow transplants, which are the standard for various types of cancers but not all.

The health insurers issued a similar blueprint for expanding health insurance in November 2006. Then, the industry supported expanded eligibility for programs such as Medicaid and the State Children’s Health Insurance Program, as it still does. The insurers also support tax credits for households with incomes of $70,400 — four times the federal poverty level for a family of three. Obama takes similar approaches with his health plan.

Many health care providers and consumer groups say it’s important to pass legislation early next year before momentum is lost to other national priorities.

“We have to collaborate and compromise, and we certainly will,” Roosevelt said.

Sen. Edward M. Kennedy, D-Mass., is expected to help oversee next year’s health debate in the Senate. He applauded the insurers’ effort.

“There’s a spirit of optimism about our work to ensure quality, affordable health care for all Americans, and today’s announcement adds to that optimism. The insurance industry has advanced serious proposals that deserve serious analysis and consideration,” said Kennedy spokesman Anthony Coley.

But not everyone was impressed.

“Of course, there’s nothing in the industry’s plan that would limit their multimillion dollar CEO salaries or require companies to spend the lion’s share of health insurance premiums on providing health care instead of on administrative costs, fat cat salaries, and skyrocketing profits,” said Richard Kirsch, national campaign manager for Health Care For America Now, an advocacy group.

Insurers also released a study from Pricewaterhouse Coopers that said 13 percent of health insurance premiums went to administrative costs, such as salaries and profits. The percentage of insurance costs attributable to administrative expenses has remained stable over time, the study said.

A spokesman for the trade groups said caps on executive pay were not discussed as part of AHIP’s deliberations for health care reform

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