|  Candace Talmadge Read Candace's bio and previous columns
April 17, 2009
Health Insurance Industry’s
Smoke and Mirrors ‘Reform’ Proposal
Alarmed about the
likelihood of substantive national reform legislation, the trade association
for the U.S. health insurance industry recently wrote to four key U.S.
senators offering to stop denying coverage based on pre-existing medical
conditions.
Although the media mostly
greeted this proposal as a major breakthrough, at least one more
knowledgeable observer was not nearly as impressed. The entire letter is an
empty gesture riddled with loopholes and really scary language, warns a
Florida health insurance sales agent who has read the document.
It also sends a curiously
mixed message about competition.
Although the letter from
America’s Health Insurance Plans mentions “transitioning to a reformed
system in which health-status-based rating is no longer used,” it
immediately adds the caveat that “rating flexibility based on age,
geography, family size and benefit design is needed to maintain
affordability.”
“As people age, they incur
more health care costs, so rating based on age is essentially
health-status-based rating,” says John Sinibaldi, a St. Petersburg-based
health insurance broker who specializes in policies for companies with 50 or
fewer employees. “This whole letter is smoke and mirrors.”
What concerns Sinibaldi far
more is language in the letter that talks about “enacting an effective,
enforceable requirement that all Americans assume responsibility to acquire
and maintain health insurance.”
“You can mandate until you
are blue in the face, but the guy making seven bucks an hour can’t afford
it,” says Sinibaldi, who has 15 years of experience in selling health
coverage to small businesses. “How do you enforce a health insurance
mandate, anyway? If people come to the emergency room and don’t have health
insurance, do you refuse to treat them?”
He also cites other parts
of the letter that are obviously aimed at warding off the Obama campaign
proposal to establish a government-run health care program as an option for
Americans, such as Medicare for all. Republicans hate this part of health
care reform, too.
“A robust private insurance
system is critical to achieving these much-needed delivery system reforms,”
the AHIP letter states. “Creating a new government-run plan would thwart the
ability of the health care sector to implement meaningful delivery system
reforms, exacerbate the cost-shift from public programs to consumers and
employers in the private market, and destabilize the employer-based system.”
“If private industry is
always more efficient and less costly than government, why is the health
insurance industry worried about competition from a government program?”
Sinibaldi wonders.
In his experience,
traditional Medicare combined with a supplemental policy (and without the
overlay of private health maintenance organizations, known as Medicare
Advantage) offers the most efficient and flexible health care coverage.
Because health insurance has become unaffordable for so many of his small
employer clients, he is open to all reform options, including expanding
Medicare to everyone, even though he knows doing so might put him out of
business.
One final thought:
Sinibaldi says it’s clear that the health insurance industry would be only
too glad to relegate the poor to a chronically underfunded government
program like Medicaid. (Physicians, hospitals and other health care
providers dislike this program. It reimburses them even less than Medicare,
and saddles them with patients who tend to be sicker precisely because they
haven’t been able to afford health care.)
“Under our reform
proposals, every uninsured American living in poverty would be eligible for
Medicaid,” the AHIP letter states.
Talk about giving away
nothing. Sinibaldi notes that the impoverished are already eligible for
Medicaid today, no reform needed.
Here’s the real danger in
this brave new world of health care reform. The health care industry obtains
a national health insurance purchase mandate while giving away nothing
except empty promises it will ignore once lawmakers move on to other issues.
The money and connections
are all on the side of the health care industry. Although Vermont
Independent Bernie Sanders has introduced single-payer legislation into the
Senate, the Democratic majority seems only too willing to cave to the health
insurance industry’s demands.
Who will support ordinary
Americans when it comes time to vote?
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