Candidates propose opportunities for private insurers
Health-Care Plans Aid Industry
By Laura Meckler
The Wall Street Journal
November 19, 2007
Democratic presidential candidates like to beat up on insurance companies, but there is a lot for the industry to like in their health-care plans — starting with plenty of new business.
“Here’s the potential for a whole new pool of lives for them to cover, with payment behind it,” said Benjamin Isgur, assistant director of PricewaterhouseCoopers’ Health Research Institute, which examined the presidential health plans’ impact on industry. The study, a comprehensive look at health-care plans offered by candidates in both parties, also concludes that doctors, hospitals and other health-care providers would likely benefit since more patients with insurance suggest more would seek care and be able to pay their bills.
The industry’s chief lobbyist, Karen Ignagni, president of America’s Health Insurance Plans, says she is encouraged by the debate so far and says her group is focused on trying to get universal insurance enacted rather than stopping it.
And…
Beyond the Sound Bite
Review of Presidential Candidates’ Proposals for Health Reform
PricewaterhouseCoopers’ Health Research Institute
November 2007
The seven leading Republican and Democratic presidential candidates are proposing two different approaches that would reform the U.S. healthcare system at two different speeds. The Democrats promise broader and more immediate changes, with new mandates, programs, and funding. Rather than creating new government programs, the Republicans’ proposals rely on indirect approaches such as changes in tax incentives that could move insurance away from an employer-based model.
None of the leading candidates are proposing a single-payer system; therefore, the industry’s future hinges on a public/private system.
Ensuring that 100% of U.S. residents have access to insurance coverage is probably not realistic, but a mix of solutions is more likely to achieve higher levels of coverage because the uninsured defy a common stereotype.
The market for individual insurance, which has seen minimal recent growth despite the introduction of tax-advantaged health savings accounts (HSAs), could receive a boost through the Republicans’ tax credits or the Democrats’ proposals to require individuals to buy health insurance.
The chief concern for health plans is to protect the markets in which they sell their products. While increased coverage would benefit health plans, they could see major changes in how they sell their products. Within the candidates’ proposals are three key risks for insurers: new regulation on companies, especially community rating and profit limits; possible loss of entire markets to government insurers; and possible movement of market share as products shift from employer to individual market.
Full report (65 pages):
http://pwchealth.com/cgi-local/hregister.cgi?link=reg/soundbite.pdf
Comment:
By Don McCanne, MD
All proposals of the leading Republican and Democratic candidates for president would use various tax policies to increase funds available for the purchase of private health plans, especially in the individual market. Does this really provide greater opportunities for private insurers to expand their markets and increase their revenues?
The stumbling block is the apportionment of risk. Will the plans be required to open their risk pools to higher-cost individuals with greater health care needs? Or will they be allowed to continue to select out the healthier sectors and pass the real costs on to the government (taxpayers)?
If they must include all risks, their products would be affordable only if regulations would permit the sale of underinsurance products, making actual health care access unaffordable for many. On the other hand, if they were allowed to decline to cover higher-risk individuals, then they would continue to be an expensive, superfluous industry that shirks their most important function of pooling risk.
Of course, there is the risk that private insurers could lose “entire markets to government insurers,” but isn’t that what they really want? Keep the healthy, but shift the high-risk individuals to government programs? If that were the case, then shouldn’t we adopt principles of social insurance similar to those of other nations with universal systems that use private insurers?
Under such programs, common pools of sickness funds are established, or inter-pool transfers are arranged based on actual claims experience. That way the private plans would pay their fair share of total health care costs. But then their premiums wouldn’t be affordable.
It’s time to give up on the fantasy that the insurance industry can provide us with affordable comprehensive plans when we expect them to participate in the pooling of risk.
We don’t need policies that would expand markets for the private plans. We simply need to establish a common, universal risk pool and fund it equitably. With our own public system, we wouldn’t even need the private plans.