AHIP Statement on Consumers Keeping Their Current Coverage
America’s Health Insurance Plans (AHIP), November 14, 2013 America’s Health Insurance Plans’ (AHIP) President and CEO Karen Ignagni released the following statement on today’s announcement by the administration related to policy cancellations: “Making sure consumers have secure, affordable coverage is health plans’ top priority. The only reason consumers are getting notices about their current coverage changing is because the ACA requires all policies to cover a broad range of benefits that go beyond what many people choose to purchase today. “Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers. Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace. If due to these changes fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase in the marketplace and there will be fewer choices for consumers. Additional steps must be taken to stabilize the marketplace and mitigate the adverse impact on consumers.” http://www.ahipcoverage.com/?p=12831
Comment:
By Don McCanne, M.D. President Obama’s decision today to allow individuals to keep the insurance they have has devastating policy implications. It is no wonder that AHIP released this statement only minutes after the President’s announcement. The insurance plans that were to be cancelled are plans that have fewer benefits than are now required by the Affordable Care Act. If the replacement plans have more comprehensive benefits, then why would people want to keep their old plan? Individuals place a high priority on the premium to be paid when they select their plans. They will almost always select the plan with the lowest premium that at least superficially seems to meet their needs. If they have major health care needs, they will select plans with more comprehensive benefits, even if they are more expensive. On the other hand, healthy individuals who are watching their budgets will often select the cheapest plan – their old plan in this case, even though it has fewer benefits. So what will happen when people are allowed to keep their old plans? Younger, healthier individuals will stay with those plans whereas older individuals with greater heath care needs will move into the new plans available in the exchanges. This adverse selection that concentrates expensive patients in the new plans will drive premiums up. When the premiums go up, more will drop out, causing the premiums to go up even further – so high that the plan has to be pulled from the market – the death spiral of adverse selection. Karen Ignagni is right when she says that allowing people to keep the insurance they have will destabilize the insurance market and cause premiums to rise, but only for the new insurance marketplaces (exchanges) that the insurance industry is counting on for their expanded business opportunities, made possible by the insurance-industry-designed Affordable Care Act. Although the spinmeisters are busy trying to discredit the President and his administration for the false promise of allowing you to keep your insurance, and for the rollout of the exchange website before it was ready, this noise is a distraction from the real problem here. The Affordable Care Act is an irreparably flawed model of financing health care, and no amount of patching is going to fix it. It is and always will be an unstable, expensive and inequitable model of financing health care. You know what is stable? Medicare. And it is less expensive and more equitable. Yes, it needs continual oversight and refinements, but it has the support of the public. If it were our only health care financing program, in an improved single payer version, virtually all of us would be demanding to keep the insurance that we would then have – an Improved Medicare for All.
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