It seems that a good way to end this week’s hand wringing about the individual health insurance market is to reference to a post that Joe Paduda left on the Managed Care Matters blog last Monday. Joe offered up a common sense approach to reforming health care without busting the budget. You can read the entire post here: http://www.joepaduda.com/archives/001326.html
Here is Joe’s simple proposal:
Congress could pass and the President could sign legislation prohibiting medical underwriting in the individual market, requiring insurers to cover pre-existing conditions, mandating community rating, and establishing a basic benefits plan. There are (at least) three mechanisms available to meet these objectives.
1. The legislation could require states to work with the National Association of Insurance Commissioners to develop model language that would meet these standards. (NAIC does this for lots of insurance types and policies today)
2. The Federal law could set forth minimum standards, while allowing states to require carriers in their jurisdiction to meet higher standards.
3. A new Federal regulatory body could be set up to ensure all insurance carriers comply with the standards set forth in the legislation.
To guard against ‘cheaters’ – the folks who wait till they get sick before signing up for coverage, the law should include a provision allowing insurers to increase rates for those that do not sign up within a certain time after they become ‘eligible’ for coverage. The increase would be pegged to the length of time the individual delayed obtaining coverage (similar to the way Part D works today).
Joe admits that his plan will probably raise premiums for the young and healthy, but argues that the way health insurance should work: “some subsidize others, with the understanding that when that ‘some’ (or when their kids break bones or they get hurt) someone else will help them out.”
Health Plan Innovation Take: Joe’s plan sounds quite a bit like the plan now in effect in Massachusetts, with one big exception: there is no mandate. Those who hold off on securing coverage will pay a higher premium – makes sense. Another thing I like about the proposal is that it would standardize the basic regulation of health insurance at the federal level while still using the NAIC to involve the states in the process. The part of this plan that I do not totally agree with is continuing to allow states to require carriers in their jurisdiction to meet higher standards. This will perpetuate the patchwork of insurance laws in place today along with special interests pushing for enhanced coverages at the state level. However, if allowing states to continue in the regulation process will make this plan politically possible, I am all for it.
And so, apparently, is Ron Williams, chairman and CEO of Aetna, who is reported to have said on Wednesday that Americans should be required to buy health insurance, bringing healthier people into plans that will help bring down costs. Speaking at the Detroit Economic Club, Williams also said that he favors:
–Selling health insurance across state lines.
–Expanding access of those now eligible to Medicare and Medicaid programs.
Here is the story from the Detroit Free Press: http://www.freep.com/apps/pbcs.dll/article?AID=2008810220304