Perspective

Health Insurers at the Table — Industry Proposals for Regulation and Reform

Karen Ignagni

N Engl J Med 2009; 361:1133-1134September 17, 2009

Article

Many commentators have noted the dramatic change in approach by the insurance industry during this year's health care reform debate. This position was a deliberate strategic shift that was developed over several years and mapped out before the 2008 presidential election, well before the current debate began. The members of our organization, America's Health Insurance Plans, are proud of the hard work they did — not simply on our broad approach, but on specific recommendations that are embedded as building blocks in all the legislative proposals under consideration and are potentially the source of common ground that could garner bipartisan support.

Beginning in March 2006, the board of directors of America's Health Insurance Plans charted a strategy for playing a new role in the reform debate by developing specific approaches to providing health insurance coverage for all Americans, improving the quality of care, and bringing down the rate of increase in health care costs. From the outset, we recognized that any strategy to extend coverage to all Americans would need to include assurances that no one would fall through the cracks because of preexisting conditions or health status.

In November 2006, we issued a plan designed to move the United States to universal coverage. Early in 2007, we offered proposals focused on improving the quality of care, including establishing a public–private initiative to evaluate the clinical effectiveness and cost-effectiveness of therapies, with the goal of providing objective information to clinicians and consumers to help inform treatment decisions and to address the wide variations and disparities in care.

In May 2008, we offered proposals to bring costs under control, including shifting the malpractice system to a new dispute-resolution process with independent third-party review, rapid resolution of disputes, fair compensation for patients, and legal protection for clinicians practicing evidence-based medicine.

Last summer, we asked people outside Washington to provide feedback on these proposals. We found that Americans wanted to be assured of coverage they couldn't lose, through a system that made care more affordable. That feedback led our board to adopt five additional proposals. First, guaranteed issue: with all Americans participating in the system, it becomes possible to ensure that everyone has coverage regardless of health status and that coverage will not be taken away. Second, access to essential benefits: consumers want to be assured that they will have a solid foundation of coverage, with the opportunity to build on that base. Third, no medical underwriting: individuals buying a policy should pay a price in line with premiums paid by others of the same age buying the same policy, with rates not determined by individual health status. Fourth, greater transparency and improved choice: employers and consumers want access to standardized, easy-to-understand-and-navigate information portals through which they can readily compare and evaluate all coverage offered in their state. Fifth, limiting the growth in costs: the country can't sustain a health care system that grows far more rapidly than the general economy. (Our proposals are described in detail at www.americanhealthsolution.org.)

Proposals now pending in Congress incorporate the first four of these principles. Consensus has also developed around strengthening the safety net, providing a helping hand to working families to maintain coverage, and ensuring that the nation invests in prevention, primary care, and improved coordination of chronic care. On the cost-containment front, we have advocated taking 1.5 percentage points off the Congressional Budget Office's projected 6.2% annual growth in national health spending over the next 10 years and have urged Congress to prioritize this goal.

We believe that implementation of these proposals would reform the U.S. health care system with a broad-based strategy for ensuring that no one falls through the cracks, while also promoting quality improvements and providing greater value for the dollars our country spends on health care. While building on the strengths of the current system, our plan includes major insurance-market reforms that would fundamentally change the way health insurance works and, in so doing, provide peace of mind to all Americans, regardless of their health status or medical history. Moreover, these building blocks could fit together to form the foundation of a strong, durable bipartisan consensus that has eluded lawmakers for more than a century.

Unfortunately, efforts to make a new government-run plan the litmus test for reform has obscured the consensus that does exist on the other crucial pieces and threatens to leave the country at a stalemate. The main argument for a government-run plan — that it will cut costs — does not withstand scrutiny. Consider Medicare and Medicaid. Lawmakers have repeatedly tried to control the costs of these programs by setting reimbursement rates well below the cost of providing care. However, these lower reimbursements do not necessarily result in increased provider efficiency or take costs out of the system. Instead, providers make up for these shortfalls by increasing charges to privately insured patients. The impact of cost shifting has been growing rapidly and now increases the cost of health insurance premiums by $1,500 per year for a family of four. The introduction of yet another government program pursuing a similar reimbursement strategy will only exacerbate this severe problem, build a policy on a structure that is economically unsound, and make meaningless the promise that “if you like your health plan, you can keep it.” A single-payer plan will have been created through the back door rather than been submitted to a straightforward debate about whether the United States really wants to dismantle the system of private health insurance that currently meets the needs of more than 200 million Americans.

There is an alternative: building on the strengths of the present public–private health care system rather than replacing it. The reforms we have advocated will improve affordability, accountability, choice, consumer protection, and transparency. They will give consumers peace of mind that they will get coverage, regardless of their health status, and that they won't lose it. We have pledged to do our part to bend the cost curve by committing to an aggressive administrative-simplification initiative that will save hundreds of billions of dollars in systemwide costs over the next decade. But other stakeholders will need to step up as well to get this important job done.

This is an agenda that can be achieved in 2009, can be implemented within a reasonable time, and can be sustained over the long term. Now members of Congress need to decide whether they will work to find bipartisan consensus or squander the opportunity to achieve reform this year.

No potential conflict of interest relevant to this article was reported.

This article (10.1056/NEJMp0907376) was published on September 2, 2009, at NEJM.org.