The health insurance industry said Wednesday it will support a national health care overhaul that requires them to accept all customers, regardless of pre-existing medical conditions — but in return it wants lawmakers to mandate that everyone buy coverage. In other words, AHIP is now endorsing something similar to the related Mandate/Building Blocks plans proposed in various related formulas by Obama, Clinton, Baucus, Kennedy, Hacker, et al.
In fact this is not really news. AHIP had back "Universal Health Coverage" more than a year ago... so long as it was structured to guarantee them profits.
But why the big news from the Insurance companies now?
Could it have anything to do with this?
Health plans' profits are on the decline, and executives at many of those companies say that trend might not reverse itself soon. Those falling earnings are giving rise to speculation that a few plans might put themselves up for sale, leading to further industry consolidation.
Every publicly traded health plan saw profits fall in the third quarter, though WellPoint, the largest U.S. plan by membership, did report an increase in earnings per share. Plans say they are struggling with declining investment returns, falling membership and rising medical costs.
The economic crisis and uncertainty of the direction the federal government will take with health reform have combined with changes internal to the health care industry to alter the outlook entirely for health plans...
[snip]
In discussions with Wall Street analysts, the plans did not address physician payment. Joe Paduda, principal for Health Strategy Associates, a consulting firm based in Madison, Conn., said plans appear to have turned somewhat away from cutting reimbursements to boost profits. "Realistically, I don't think there's any more blood in that stone," he said.
Instead, plans often focused on warning investors -- as WellPoint and United HealthGroup did even before third-quarter earnings reports were issued -- not to expect the profit growth of the past.
[snip]
Companies across the board are seeing declines in membership because more workers are losing their jobs and insurance in the weakening economy, analysts said. However, plans are still vowing not to cut premiums to keep membership, and in many cases they have raised prices.
[snip]
It's uncertain how long health plans can keep raising premiums. "I think the mind-think is basically, 'We'll just keep hiking premiums.' Where does the 'Duh!' come in?" asked Susanne Madden, president and CEO of the Verden Group, a Nyack, N.Y.-based health care consulting group. "The higher premiums go, the less companies can afford to buy or even cost-share benefits for employees."
So just to be clear: Mandates in this context are a way of using the police power of the state to force you to pay for a bail-out of the for-profit insurance companies, either directly via premiums or indirectly via tax dollars.
But still if there is guaranteed issue, they have to sell you a plan, that is a step forward... right?
Well, a very incomplete one. Here are some of the problems:
Guaranteed issue does not necessarily mean that pre-existing conditions are covered. You may get insured, but not for your diabetes.
It does assure what the premium rate is. Yes we will cover you and your diabetes... that will $30,000 per year please.
Even if there is community rating, something the Insurance companies will fight, there is still the nighmare of Copays, Deductibles, Out-of-Service calims and fights, Denials, etc.
This does not cover the issue of Under-Insurance. You have insurance, but when you get sick and need it, the coverage is so poor you go bankrupt anyway.
Any such plan leaving in place the fragmented non-system we have now, and with the Insurance companies soaking up an excess 31% of costs for no added benefit will fail.
As we will see in my next postings, they cannot control costs.
But it is a good thing that real change is going to happen.
Now this actually is good news. I actually am in favor of any reform that makes things better... even if it is doomed to fail since they will not actually reach Universal coverage that is also Comprehensive, controls total National costs and also controls Individual costs.
So long as when it fails, the blame goes to the insurance companies and does not rebound to those who tried a (very partial, incomplete) government solution. It is important that the next step be single payer and not a return to free market fundementalism.