Tale of Two Trade Groups.

Last week ended with an interesting exchange between the trade groups that represent the nation’s health insurance plans over the route to take for solving the country’s health care issues.

First, America’s Health Insurance Plans (AHIP), and the Blue Cross and Blue Shield Association, said Thursday that they would accept a requirement that they offer coverage to applicants with serious health problems if the government would set up a risk-adjustment mechanism for insurers and require all individuals to own health coverage.

These statements were quickly countered by The Council for Affordable Health Insurance (CAHI), an Alexandria, VA-based groups that promotes free-market approaches to improving the U.S. health care system. CAHI said it disagrees with other insurance groups’ willingness to accept more government involvement in the health care system.

With health care reform aimed at creating some form of universal coverage set to come barreling out of Congress in January, both trade organizations are positioning themselves for the battles to come.

On the one hand the AHIP membership is sending the signal that they are prepared to accept all comers, but only if the government does its part and mandates that everyone have coverage and that there is some mechanism for dealing with the real train wrecks that will come looking for coverage.

On the other hand CAHI points out that this plan opens the door to more government regulation including defining what would count as qualified health coverage. This, they say, will lead to interest groups seeking to force qualified plans to cover their many different products and services and could end up creating barriers to, or a ban on, features such as health savings accounts or health reimbursement arrangements.

CAHI says the government could do more to expand access to coverage by providing subsidies for individuals who cannot afford coverage and supporting risk pool insurance programs designed for individuals with health problems.

Health Innovation Take: AHIP should be commended for taking the first step toward working with lawmakers to come up with a health care system that would achieve universal coverage while it preserves the current multi-payer system. However, where is the plan to manage utilization and to lower costs? As CAHI rightly points out, a mandate will definitely involve government in making the rules about coverage. Look no further than Massachusetts if you need proof. Innovation can not be legislated or regulated. True reform will come from allowing employers and health plans to work together within the framework of the marketplace to develop programs that address the utilization and cost issues that are prompting many employers to drop their coverage in the first place.

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