Wednesday, May 6, 2009 10:29 AM

AHIP Pleads Its Case: Regulate Us

In a rare sight on Capitol Hill for any industry, health insurers practically begged senators Tuesday to regulate their livelihood rather than subject them to the fierce, and potentially lethal, competition that would ensue if lawmakers unleash a government-run public insurance option on them.

"We accept the premise that the system is not working today and needs to be reformed and, in fact, we need very clear, specific government regulation," Karen Ignagni, president of America's Health Insurance Plans said.

AHIP also said insurers would stop discriminating based on gender, which typically leaves women paying more than men.

AHIP has suggested insurers are willing to drop conditions for insurance coverage and variations in premium costs depending on how sick a person is.

Ignagni spoke at a roundtable discussion with the Senate Finance Committee and other stakeholders. She elaborated after the event that she envisions the government setting a minimum health benefit package and enforcing the limits through penalties she said AHIP would help design. She admits the request is unusual.

"It's radical for an industry working in a market to say 'Renovate the rules. Here's the road map,'" Ignagni said.

Much of Tuesday's three-hour discussion focused on the public option. It's a vexing topic for Senate Finance Committee Chairman Max Baucus, D-Mont., who is trying to find compromise for some Democrats who insist on one and Republicans who vehemently object. Showing how the rhetorical flourishes will be shaped, a few Democrats Tuesday renamed the public option the "consumer-oriented health" plan, while Sen. John Cornyn, R-Texas, dubbed it the "Washington-directed unfair competition" plan.

Democrats and many patient and consumer groups argue a public option will increase competition and hold private insurance companies accountable, while Republicans and insurers maintain a public option would drive insurance companies out of business.

Ignagni contends the public option idea stems from thinking formed before insurers came to the negotiating table. Instead, she says, healthcare coverage can expand and insurance companies can be held more accountable with changes that negate the need for a public option.

"What we are proposing is a wholesale change and a complete overhaul of existing regulation, so it would be set out at the federal level, clearly, transparently hitting the mark with respect to: No one falls through the cracks; no one is discriminated against because of pre-existing condition; no one has to pay according to health status and there would not be gender differentiation," Ignagni said. "That essentially is the thrust of what folks have quite correctly talked about needs to be done."

Baucus posed the critical question of who should be responsible for coming up with a minimum health benefit package. "There's those over the last couple, three years that have suggested a medical board that would insulate members of Congress from the onslaught of every group under the sun that wants to be covered," Baucus said. "Others say, 'No, no, no, no, no that's too much big government. That's socialism.'"

Even though they could not agree on a public plan, participants at the roundtable agreed for the most part that Congress should not be involved in making such policy decisions.

"Anyone other than the people here, because I think it is an incredibly important decision and politics shouldn't play a role," Andy Stern, president of the Service Employees International Union, said.

Ron Pollack, executive director of FamiliesUSA, echoed Stern but suggested Congress take an active role in setting limits on out-of-pocket costs to keep health coverage affordable.