Insurers Called to Help “Fund” Co-Ops

The wrangling and haggling continues over health care reforms and how to pay for them, as Senate Finance Committee Chairman Max Baucus’ 10-year, $856 billion bill, called “America’s Health Future Act of 2009,” lands on President Obama’s desk. The senator’s bill is designed to offer health insurance to tens of millions of uninsured Americans.

The bill follows weeks of public vitriol in the form of town hall meetings, and represents a more moderate course on health policy than other major bills currently moving through Capitol Hill.

As expected, the bill does not propose a new government insurance plan to compete with private insurers; rather, it proposes to extend coverage to the uninsured by way of a vast network of nonprofit health insurance cooperatives. It also includes a $6 billion annual fee that would be assessed on some health insurance, pharmaceutical and medical device companies as well as clinical laboratories, considered “seed money” to cover start-up costs and meet insurance solvency requirements.

(Click here for the Wall Street Journal’s link to the full text of the Baucus plan.)

Opinion polls have steadily reflected a split by Americans over Obama's plans, which he says are designed to rein in costs, improve health care, regulate insurers to protect consumers and expand coverage to the uninsured.

In Washington, that split is more like the great divide. Even Republicans within the committee crafting the bill seem divided. For example, Senate Minority Leader Mitch McConnell claims it would cut Medicare and impose new tax burdens on families and small businesses.

America’s Health Insurance Plans (AHIP) was also not in favor of the bill as written: “We are committed to working with policymakers and stakeholders to find savings in the Medicare program, including Medicare Advantage, but it is important to ensure seniors’ health care choices are protected," said President and CEO Karen Ignagni.
 
“New health insurance reforms and consumer protections will guarantee access for all Americans without the need for a new untested government-created co-op that could disrupt the quality coverage on which millions of Americans rely today," she added. "We believe there is an opportunity for additional system-wide cost containment to ensure coverage is more affordable and to put our health care system on a sustainable and fiscally responsible path.  New taxes on health care coverage will have the opposite effect by making coverage less affordable for families and employers across the country."

As late as yesterday, health insurance executives were voicing opposition. At an investor conference yesterday, Aetna CEO Ron Williams told the audience that his belief was that Democrats as well as Republicans would oppose government-run programs in their efforts to reform health care because of beliefs about the role of government, and concerns it would add to the deficit.

"I continue to believe that there is not the support, particularly in the Senate, for a government plan," Williams said at a Morgan Stanley health care conference broadcast over the Internet.

Unlike the more aggressive, recently issued House bill, the latest proposal would not require employers to provide insurance. However, it would require businesses that have more than 50 workers to whom they don't offer insurance to reimburse the government for part of the cost of any taxpayer-backed insurance subsidies the workers receive.

As expected, the measure includes instructions on “pre-existing conditions,” and insurers would be barred from using a range of practices, such as denying health coverage to individuals with pre-existing conditions, or imposing annual or lifetime limits on coverage.