Health Insurance Industry To Propose Steps To Make It Easier For Individuals To Obtain Coverage, Including Those With Pre-Existing Medical Conditions

Main Category: Health Insurance / Medical Insurance
Article Date: 20 Dec 2007 - 9:00 PDT

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America's Health Insurance Plans on Wednesday will present a proposal that is intended to increase access for people seeking to purchase health insurance on the individual market, including those who previously have been denied coverage because of health issues, the New York Times reports. The proposal was drafted by a group of insurance executives.

The proposal "signals a willingness by insurers to abandon practices that have seemed aimed at excluding all but the healthiest individuals," the Times reports. Under the plan, strict guidelines would be enforced to make it more difficult for insurers to withdraw or deny coverage to individuals with pre-existing health problems. It also would limit the cost of premiums that such people could be charged.

In addition, the proposal urges states to offer individual policies for people likely to sustain exceptionally high medical bills. States would be called on to provide coverage for any individual whose medical costs are projected to be at least twice the average. For higher-risk people who do not meet that criteria, insurers would agree to cap premium levels at 150% of the market rate.

It is unclear how many additional people would be able to obtain insurance under the proposal, and the group did not offer estimates on cost. According to a new AHIP survey scheduled to be released Wednesday, about 11% of all people who currently apply for health care are not offered a policy after their medical status is reviewed by insurers. About 30% of all applicants in their 60s who do not yet qualify for Medicare are denied coverage.

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AHIP CEO Karen Ignagni said, "We are taking responsibility for ensuring that no one falls through the cracks."

Wisconsin-based Assurant Health CEO Don Hamm, who was among the executives who drafted the proposal, said, "The individual market is recognizing that we need to improve the way we do business today."

Jay Gellert, CEO of California insurer Health Net and another panel member, said, "This is a far-reaching proposal that responds to the concerns that people have appropriately raised." Gellert said that independent insurers could make the proposal work if there are enough people who can benefit from it, adding, "If a state or the government is committed to universal participation, you can have a viable market and take all comers."

Paul Ginsberg, president of the Center for Studying Health System Change, said, "The health insurance [industry] is coming to grips with the fact that practices that are clearly driven by market forces are giving the industry a black eye." The Times notes that the insurance industry "is also trying to have a greater say in any state changes that may be enacted" (Abelson, New York Times, 12/19).

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