Medical Device Daily

If President Barack Obama's proposal of offering a Medicare-like insurance plan to the general public is considered a thrust to healthcare reform , then a proposal from commercial insurers that would lower the higher premiums that sick customers have to pay would most likely be a parry and almost counterproductive, according to consumer groups.

The proposal comes from America's Health Insurance Plans (AHIP; Washington) and the Blue Cross Blue Shield Association (Chicago).

"By enacting an effective, enforceable requirement that all Americans assume responsibility to obtain and maintain health insurance, we believe we could guarantee issue coverage with no pre-existing condition exclusions and phase out the practice of varying premiums based on health status in the individual market," AHIP President Karen Ignagni and Blue Cross President Scott Serota said in a letter to Congress.

The plan also would call for insurers to provide discounted rates for those who engage in healthier behaviors. But insurers still would be able to change rates based on age, family size and geography.

In their letter, Ignagni and Serota said: "Individuals from low- and middle-income families who are being asked to participate in the health insurance system will require health care tax credits."

Since 1994, the U.S. has seen nearly 9 million more people become uninsured, according to the Robert Wood Johnson Foundation's (New Brunswick, New Jersey) latest study. The foundation also said that nearly one in five working Americans are uninsured. There has been shown to be a direct correlation chronic illness and the lack of healthcare.

A study titled "Chronically Ill and Uninsured: A National Study of Disease Prevalence and Access to Care in U.S. Adults," published in the Aug. 5 edition of Annals of Internal Medicine, reported that more than 11 million Americans with chronic physical illnesses aren't getting the medical care they need because of a lack of health insurance (Medical Device Daily, Aug. 8, 2008).

For some insurers, the plan is being hailed as a move by the industry to bring back people to the insurance market.

Although the plan is said to help chip into those numbers, some say that it is only because of Obama's proposal, which could butt heads with the private sector, that the groups are introducing this plan.

It also sets up the debate on which plan would be better for America's ailing healthcare system, which has often been referred to as a "sick care system."

In the Tuesday letter to Congress, AHIP wrote that creating a government-run plan would "thwart" the ability of the healthcare sector to pursue meaningful healthcare reform.

But consumer group Healthcare for Americans Now (Washington) sharply disagrees and offered some scathing remarks in regards to AHIP's proposal.

"AHIP's concession does little to make health insurance more affordable," Richard Kirsch, campaign manager for Healthcare for Americans Now, told Medical Device Daily, via e-mail. "It continues to allow insurers to hike rates based on health status to small business and to charge more for everyone based on age, gender and other factors. AHIP is so scared about the prospect of having to compete with a public health insurance plan which will have a mission of putting health first, instead of profits first, that it's desperately making small concessions hoping to fool Congress and the public. It won't work."

To date nearly 50 million Americans suffer without the benefit of healthcare coverage. The topic was a major issue hotly contested in the past presidential election. Although it initially was front-and-center in campaigns, healthcare took a back seat to the sagging economy.

And to make matters worse, as jobs continue to disappear healthcare in its current form remains out of reach for many. Due to losses in the stock market collapse, rates on most insurance plans are going up again this year.

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