AHIP's Guarantee Access Plans
Guaranteeing Access to Coverage for All Americans
America’s Health Insurance Plans (AHIP)
(Released December 19, 2007)
Our Commitment
The members of America’s Health Insurance Plans (AHIP) believe that all Americans — regardless of health status or income — should have access to affordable health care coverage. We also believe that it is our responsibility to offer solutions to help the nation meet its health care challenges.
Establish Guarantee Access Plans
Guarantee Access Plans can ensure that everyone — including individuals with pre-existing medical conditions — has access to health care coverage. Uninsured individuals with the highest expected medical costs would be eligible to enroll in the new plans.
How Guarantee Access Plans Will Ensure Access to Affordable Coverage
Individuals would be eligible for coverage through the Guarantee Access Plan if their health care claims costs — based on objective, independent underwriting criteria — are expected to be more than twice the statewide average. Premium rates for Guarantee Access Plan coverage would be limited to one-and-one-half times standard market rates.
How Health Insurance Plans Will Provide a Coverage Safety Net
Health plans would guarantee coverage to individuals who are not eligible for coverage through the Guarantee Access Plan. Each health insurance plan would guarantee issue policies to these individuals up to a predetermined level of participation (for example, 0.5 percent of the health plan’s insured population in the individual market). This cap would need to be reset if all health plans reach that level. Health plans would limit the premium for these guarantee issue policies to one-and-one-half times standard market rates.
Maintaining Affordability
As part of their efforts to keep coverage as affordable as possible, states will need to:
- Create a sliding-scale premium subsidy program with additional assistance for those with high health care costs.
- Fund the Guarantee Access Plans from a broad base of sources, so that coverage remains affordable for those who are currently insured.
http://www.ahip.org/content/default.aspx?docid=21727
Press release
AHIP
December 19, 2007
“Health plans from across the country came together to address the unique challenges facing the individual health insurance market. We believe that plans and the states, working together, can guarantee access to affordable insurance for everyone in the individual market,” said Jay Gellert, President and CEO of Health Net, Inc. and Co-Chairman of the Individual Market Task Force.
“This initiative is a fundamental repositioning,” said Karen Ignagni, President and CEO of AHIP. “Our Board is committed to ensuring that no American falls between the cracks of public and private programs.”
http://www.ahip.org/content/pressrelease.aspx?docid=21728
Comment:
By Don McCanne, MD
It does not take very many high-cost patients in an insurance risk pool to drive up to unaffordable levels the premiums required to fund that pool. In fact, health care costs are now so high that premiums for a risk pool limited to healthy individuals are now unaffordable for many. The private insurance industry understands that their business model breaks down if they have to start paying for the health care of individuals with greater needs.
The private insurance industry has long supported the establishment of state high-risk pools, funded with very high premiums and subsidies from the taxpayers. This has allowed the private insurers to pass this problem of adverse selection off onto the taxpayers. But it hasn’t been particularly successful. Only about 180,000 people in the nation (0.06 percent of our population) are covered by these programs. You can understand how ineffective that has been when you consider that about 60,000,000 high-needs people use about 80 percent of our national health expenditures.
So now what are they proposing? Keep in mind that private insurers sell their products primarily to the 80 percent of people with minimal health care needs. AHIP is proposing that they be relieved of covering any individual that the actuaries predict might cost twice the average of claims in this very low cost group. Everyone who might actually need care is transferred to the Guarantee Access Plans managed by the state. These plans would be funded by a premium with a 50 percent penalty added, plus financing that the state obtains from “a broad base of sources.” That broad base, of course, is the taxpayers.
You would think that this would solve the problems for the insurers. But no. They also are concerned about individuals who have had yeast infections, or hay fever, or migraine headaches, or thousands of other disorders that fall below the actuarially determined threshold of twice the anticipated average of claims. These are the individuals in the upper half of the healthy population. They know, based on claims experience, that these individuals, on average, may use up to twice the care as the median insured. Although this is still a very low cost group, AHIP is recommending that they be allowed to assess a 50 percent penalty to their premiums. Not only that, they also want the right to cut off enrollment of these individuals once their risk pools have met a threshold of a fraction of one percent of them. They want a risk pool that is 99 and 44/100’s percent pure, but someone needs to tell them that this isn’t soap that they’re selling.
AHIP’s proposal is a response to the threat they face if individual mandates become the mainstream policy solution for achieving universal coverage. If they are forced to actually cover those with even modest health care needs, their business model is dead.
AHIP has made it very clear they they do not want to pay for health care. They simply want to sell administrative products to only the healthiest of us. What we need instead is an equitable system to pay for health care, so that we can prevent financial hardship for those who do need care.
Since the private insurance industry doesn’t want to do that, it’s time for us to show them the door.