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Health insurance providers are protesting this week as the government comes a step closer to strengthening its industry regulation by calling for new "common sense" practices.
This latest development in U.S. President Barack Obama's push for health care reform occurred Monday when the White House released a sprawling $950 billion proposal in anticipation of tomorrow's (Thursday's) scheduled summit.
Obama's plan, which combines the respective reform bills of the Senate and the House of Representatives, suggests drastic changes are coming for insurance providers.
This latest development in U.S. President Barack Obama's push for health care reform occurred Monday when the White House released a sprawling $950 billion proposal in anticipation of tomorrow's (Thursday's) scheduled summit.
Obama's plan, which combines the respective reform bills of the Senate and the House of Representatives, suggests drastic changes are coming for insurance providers.
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The main points of the plan include offering coverage to 31 million uninsured Americans and lowering premiums to encourage all U.S. citizens to purchase insurance. Those who are non-exempt and remain voluntarily non-insured will be fined, as will businesses that choose not to offer employees coverage.
However, some of the provisions are aimed at holding insurance providers responsible for the current system's failings. The proposal would prohibit insurance companies from enforcing the following practices, considered most hurtful to insured Americans:
Insurers also will be expected to publicly disclose administrative expenses to demonstrate that they are spending a proportionate amount of earnings on customer care. Particularly profitable insurers will have to give rebates to customers instead of funneling the money to advertising or bonuses.
To top it off, providers would pay about $67 billion in fees over a 10-year period - though not before until 2014, leaving some preparation time.
The more competitive health insurance market created by the proposal would include a one-stop insurance shopping place where small businesses, self-employed and uninsured insurance shoppers could pick from state-based offering pools called exchanges. The exchanges would include a government health plan offering like the one available to Congress.
Although the plan means millions of now uninsured Americans would start paying premiums, health care providers fired back Monday saying the proposed price caps could destroy some businesses - particularly since there is no price cap on rising doctor and hospital bills.
"This would be like capping the price automakers can charge consumers but letting the steel, rubber and technology manufacturers charge the automakers whatever they want," said Karen Ignagni, the chief executive officer of America's Health Insurance Plans.
Going after the health insurance providers has been the White House's stadium cry when rallying support for a reform. One case in particular making rounds in the news is WellPoint Inc. (NYSE: WLP), which increased plan premiums up to 39% for some of its California customers. Other states have reported premium hikes of up to 20%.
"As bad as things are today, they'll only get worse if we fail to act," Obama said Saturday. "We'll see exploding premiums and out-of-pocket costs burn through more and more family budgets."
News and Related Story Links:
However, some of the provisions are aimed at holding insurance providers responsible for the current system's failings. The proposal would prohibit insurance companies from enforcing the following practices, considered most hurtful to insured Americans:
- Denying coverage to those with pre-existing conditions.
- Limiting annual and lifetime coverage availability.
- Charging women a higher premium.
- Dropping insured customers who become ill.
- Significantly increasing premium prices.
- Spending a much higher amount of revenue on administrative costs and executive bonuses than on customer care.
Insurers also will be expected to publicly disclose administrative expenses to demonstrate that they are spending a proportionate amount of earnings on customer care. Particularly profitable insurers will have to give rebates to customers instead of funneling the money to advertising or bonuses.
To top it off, providers would pay about $67 billion in fees over a 10-year period - though not before until 2014, leaving some preparation time.
The more competitive health insurance market created by the proposal would include a one-stop insurance shopping place where small businesses, self-employed and uninsured insurance shoppers could pick from state-based offering pools called exchanges. The exchanges would include a government health plan offering like the one available to Congress.
Although the plan means millions of now uninsured Americans would start paying premiums, health care providers fired back Monday saying the proposed price caps could destroy some businesses - particularly since there is no price cap on rising doctor and hospital bills.
"This would be like capping the price automakers can charge consumers but letting the steel, rubber and technology manufacturers charge the automakers whatever they want," said Karen Ignagni, the chief executive officer of America's Health Insurance Plans.
Going after the health insurance providers has been the White House's stadium cry when rallying support for a reform. One case in particular making rounds in the news is WellPoint Inc. (NYSE: WLP), which increased plan premiums up to 39% for some of its California customers. Other states have reported premium hikes of up to 20%.
"As bad as things are today, they'll only get worse if we fail to act," Obama said Saturday. "We'll see exploding premiums and out-of-pocket costs burn through more and more family budgets."
News and Related Story Links:
- The White House:
The President's Proposal - ABC News:
Details of Obama Health Care Plan - CNN:
How Obama wants to pay for health reform - CNBC:
Who Wins with Obama's Latest Health Care Proposal?
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Tags: Barack Obama, Health Insurance, Healthcare, Obamacare, Taxes, WellPoint
There is no reason health insurance companies can't follow the property/casualty model, and cover risk rather than continual care. Health Saving Accounts facilitate this model, and are the best method to control health care spending. They work because consumers have skin in the game, and they are rewarded when that are frugal. That's powerful social engineering.
"Covering Risk" might be fine based on only generally accepted factors such as age, sex and perhaps ethnicity, but could not cover pre-existing conditions except at prohibitive premiums, since conditions like diabetes, coronary disease , cancer and many others presage high and hard-to-predict costs. This is why risk-spreading mandatory universal coverage is the only practical way I can see to eliminate the "pre-existing condition" problem.
Third party payers, which soak up a significant portion of every health care dollar, have been the ruination of the American healthcare system. If your "mandatory universal coverage" is just code words for more and more government bureaucracy, then we're just farther down the road to ruin.
With a Health Savings Account, the financial transaction is between the patient and the physician, with no insurance companies or government agencies taking their chunk. Make this the core of the system, and then we'll talk about how to handle the outliers.