The Issues
Ignagni is in a position to make or break President Obama’s promised overhaul of the American health-care system. The insurance industry was largely credited with killing the Clinton administration’s 1993-1994 health-reform efforts. But Ignagni has said this time will be different.
“You have our commitment to play, to contribute and to help pass health-care reform this year,” Ignagni told Obama at his White House Health Care Summit in March 2009.
In 1993 “we were commenting on other individual’s proposals,” Ignagni said, describing the insurance industry’s role during the Clinton attempts as passive. But now, the same industry plans to take a proactive approach. AHIP’s board made a conscious decision to do research, identify areas ripe for change and propose plans for reform, Ignagni said.
“It’s very different positioning than 14 years ago,” she said.
But many groups have accused the insurance industry’s proposals of focusing on profits at the expense of patients. Patient advocacy groups worry that the insurance industry could turn negative on reform at any moment.
But Ignagni said the insurance industry and patient groups have the same goal: “How can you get people into the system with coordinated care to manage their chronic disease, so they use less catastrophic illness and get better care all the way through?”
Individual Mandates
Ignagni and the health-insurance lobby favor mandating that every individual carry coverage. Such a requirement would be similar to the law that all drivers buy car insurance.
President Obama had not included a mandate that individuals buy insurance in the health-care plan he proposed during his 2008 campaign, a key difference between his plan and Democratic rival Hillary Rodham Clinton’s. But as of early 2009, most stakeholders were demanding a mandate.
For health insurers, a mandate means millions more customers. Of the nearly 50 million uninsured Americans, some are choosing to live without health coverage to save money. Insurers want those people to be required to buy insurance. Those who can’t afford it will most likely receive government subsidies to help them purchase it.
But there’s another side to the mandate coin. If everyone is covered, insurers will be required to cover some people with pre-existing illnesses. They may ask for government subsidies to defray the high-cost of covering already-ill people and keep others’ premiums from spiking.
In March 2009, Ignagni’s AHIP joined the Blue Cross Blue Shield Association in pledging to end charging higher premiums to people who are already sick. "When you have everyone in the system, and you can bring (financial) assistance to working families, then you can move away from health status rating," Ignagni told the Associated Press.
Pay for Performance
The insurance industry is not alone in supporting an overhaul in the way doctors are paid. Many interest groups want to pay doctors based on the outcome of the treatment rather than paying them for every procedure prescribed .
“We either in this country are going to make a commitment to a modern health system that relies on best practices, or we are going to be in 19th century program where we pay for whatever is done,” Ignagni said.
Obama has already dedicated money in his stimulus package to studying what treatments work best.
Still, the idea has been criticized for inhibiting experimentation and innovation. Ignagni said there needs to be, “more transparency about what they tradeoffs are.”
The Public Insurance Option
Ignagni is fighting a plan to offer a government-funded health insurance option alongside private plans, a proposal Ignagni believes could spell disaster for private insurers.
The president envisions a National Health Insurance Exchange where people could choose from a variety of private plans as well as a government option. Proponents say the public insurance alternative would be similar to the type of insurance offered to U.S. lawmakers.
But the insurance industry believes the government would be an unfair competitor, paying doctors at lower rates, as government-funded Medicare already does, Ignagni said. Independent research shows that 100 million people would quickly migrate to a public plan.
“If that happens there won’t be any kind of opportunity to have the bests of both worlds,” she said. “There wouldn’t be a private system, potentially.”
Taxing Insurers
Ignagni weighed in on the health-care reform proposals from Senate Finance Chairman Max Baucus (D-Mont.). Baucus proposed paying for reforms by taxing high-end health insurance plans and charging fees to insurers, medical–device manufacturers and drugmakers.
In a letter to Baucus, Ignagni worried that, taken together, these actions could make coverage less affordable. "Without system-wide cost containment provisions, the proposed new taxes on high cost plans and the proposed new taxes on key components of health expenditures would cause many Americans to spend more on coverage," Ignagni wrote.
Co-ops
In her letter to Baucus, Ignagni expressed her industry's concerns over what she called "new, untested government-created health insurance cooperatives."
The co-ops, the brainchild of Finance Democrat Kent Conrad (N.D.), would create a series of non-profit, patient-centric, health insurance pools, to compete with private insurers. Conrad proposed it as a non-governmental alternative to the public option.
Lowering Costs
Ignagni opposed the health-reform bill proposed by the Senate Finance Committee led by Chairman Max Baucus (D-Mont.), saying it did not effectively cut costs. She cited a study by PricewaterhouseCoopers that showed the average family's premiums would actually increase under the plan.
