AHIP President, CEO says health insurance industry would accept stronger federal regulation, stop charging women higher premiums than men

May 6 2009

During a Senate Finance Committee hearing on Tuesday, America's Health Insurance Plans President and CEO Karen Ignagni said members would concede to greater government regulation, as the industry works to prevent the creation of a government health plan that could threaten their business, the AP/Chicago Tribune reports.

AHIP also offered to stop charging women more for coverage and to accept new consumer protections (Alonso-Zaldivar, AP/Chicago Tribune, 5/6). According to Politico, Tuesday's hearing, which was the second of three public forums on overhauling the health care system, focused on how to develop a public health plan option that does not drive private insurers out of the market (Budoff Brown, Politico, 5/6).

Insurance companies already have said they would stop basing premiums on health status and guarantee coverage for people with pre-existing health conditions if the government requires all U.S. residents to obtain coverage. According to CQ Today, the industry's call for greater regulation could stem from concerns about growing support for national health care overhaul, leading private insurers to face two choices: "change the way they do business or face competition from a government-run insurance plan that many say would eventually run them out of business" (Armstrong, CQ Today, 5/5).

Ignagni said insurance companies "accept the premise that the system is not working today and needs to be reformed." Therefore, the industry is calling for "a full-scale renovation and a complete overhaul of the existing regulatory mechanisms," Ignagni said (Politico, 5/6). She called on the government to overhaul regulations governing insurance markets nationwide and replace inconsistent elements in state regulations. Ignagni said specific changes to the industry's operations could expand health care coverage and hold insurance companies more accountable, thus negating the need for a public plan. She added that the insurance industry's proposed "wholesale change and complete overhaul" would mean that "[n]o one falls through the cracks; no one is discriminated against because of pre-existing conditions; no one has to pay according to health status and there would not be gender differentiation" (Edney, CongressDaily, 5/6).

According to Ignagni, Congress could achieve its goals of expanding access to health insurance coverage through a tightly regulated insurance market. She also pointed to the Federal Employees Health Benefits Program, as well as systems in Germany, the Netherlands and Switzerland, as examples of how such a plan could operate (Armstrong, CQ Today, 5/5). After the hearing, Ignagni said she envisions a minimum health benefit package created by the federal government and penalties to enforce coverage standards that AHIP would help design (CongressDaily, 5/6).

Women's Premiums

According to the Boston Globe, the offer by health insurance companies to eliminate the higher premiums for women if all U.S. residents are required to obtain coverage is the "latest concession" by insurers as they attempt to prevent the creation of a government plan that would compete with private insurers (Cragin, Boston Globe, 5/6). The New York Times reports that women who purchase their own health insurance often are charged 25% to 50% more than men for identical coverage in the individual market. Insurance executives during interviews last fall said that women are charged higher premiums because they typically seek health care services more frequently than men, particularly during childbearing years. Sen. John Kerry (D-Mass.) during Tuesday's hearing said, "The disparity between women and men in the individual insurance market is just plain wrong, and it has to change." Ignagni agreed that the disparities "should be eliminated" (Pear, New York Times, 5/6).

Contention Over Public Plan

The issue of whether to include a public health insurance option as part of comprehensive health care reform legislation "emerged as the main area of disagreement" between Democratic and Republican lawmakers at the hearing, Roll Call reports (Drucker, Roll Call, 5/6).

Sen. Charles Schumer (D-N.Y.) offered a compromise that aims to put a public plan option on a level playing field with private insurance by requiring a public option to be self-sustaining; accountable to the same rules and standards as private insurers; and regulated by an entity other than the one that operates it (CongressDaily, 5/5). Schumer said, "The bottom line is you need somebody who is not a private insurance company to be in the mix," adding, "I don't think the public plan should have an unfair advantage, but it would be giving all of you in the insurance industry an unfair advantage not to have a public plan" (Politico, 5/6).

Finance Committee Republicans also questioned how states and the federal government could afford proposed Medicaid and Medicare expansions as part of health reform. Sen. Orrin Hatch (R-Utah) said, "To me, a combination of Medicaid, Medicare and [CHIP] ... expansion has much the same effect as a public plan" (Norman/Reichard, CQ HealthBeat, 5/5).

The Hill on Wednesday profiled Senate Finance Committee ranking member Chuck Grassley (R-Iowa) and his role in health care reform, particularly his work with committee Chair Max Baucus (D-Mont.) on crafting bipartisan legislation and the conflicts surrounding whether a public health insurance option should be included (Young, The Hill, 5/6).

Protesters Disrupt Hearing

In related news, eight demonstrators calling for a single-payer health care system were removed from the Senate Finance Committee hearing Tuesday after interrupting the proceedings, the AP/Kansas City Star reports (AP/Kansas City Star, 5/5). The disruption was organized by Healthcare Now, Physicians for a National Health Program and Single Payer Action (Budoff Brown, Politico, 5/5). One arrested protester, Kevin Zeese, called it "a pay-to-play hearing," adding that the committee "excluded the most popular option, single-payer" (Armstrong/Nylen, CQ Today, 5/5).