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Volume 12 Number 244 News: Access America's Health Insurance Plans Dec. 19 announced a three-part proposal for states to guarantee access to health care coverage to uninsured individuals and those with pre-existing conditions. The AHIP board of directors approved the proposal, which also includes operational reforms such as restrictions on rescission actions, as a way to provide universal health care coverage, AHIP President and Chief Executive Officer Karen Ignagni told reporters during a phone briefing. The proposal calls on states to establish so-called guarantee access plans that would provide coverage to uninsured individuals with high anticipated medical costs, Ignagni said. In cases where individuals were not eligible to participate in a guarantee access plan, health plans would provide backstop coverage on a guarantee issue basis, she added. Premiums for the backstop coverage would be capped at one and a half times the standard coverage rate, according to an AHIP release. AHIP is a national trade association of health insurance companies based in Washington, D.C. Other Reforms Recommended Ignagni said AHIP's proposals are designed to enhance the 35 existing state risk pools and help other states establish a safety net for uninsured individuals. Also among operational reforms AHIP recommended are limits on the use of pre-existing conditions exclusions, restricting rescission actions, and establishing a third-party review process for such decisions and actions, Ignagni said. "Specifically, the Board is recommending that health plans waive the application of pre-existing condition exclusions for medical conditions that are disclosed and should limit rescission actions to those based on information that should have been included in a complete and accurate response to questions asked in a clear and understandable application," AHIP said in the release. Ignagni said the reforms would give individuals "peace of mind" about obtaining and maintaining coverage. Coverage Mandate Considerations AHIP also recommended five steps states should consider if they choose to mandate health care coverage for individuals. Ignagni said states should develop an insurance coverage verification system, establish an enforcement mechanism (such as denying drivers license renewals for noncompliance), develop an auto-enrollment system for individuals who do not self enroll in a plan, provide premium subsidies to moderate-income and low-income individuals, and identify a broad base of funding sources. On the funding issues, Ignagni said states cannot finance universal health care programs solely with premiums from participating individuals. That places a disproportionate financial burden on individuals who rely on state programs to obtain health care coverage, she said. AHIP has drafted model legislation for states as part of its effort to urge states to offer guaranteed access plans, Ignagni said. She also noted that AHIP has developed an actuarial model that will assess budget implications of proposed universal health coverage proposals. Survey on Coverage AHIP Dec. 19 also released a survey of the individual health insurance market. Ignagni said the findings show that nearly 90 percent of all individuals who applied for health care coverage in 2006 and 2007 were offered coverage. Of those offered coverage, 40 percent were offered standard premium rates and nearly half were offered lower, preferred rates, according to a release about the survey, titled Individual Health Insurance 2006-2007: A Comprehensive Survey of Premiums, Availability, and Benefits. The survey found that average annual premiums for individuals were just above $2,600, and average annual premiums were nearly $5,800 for families. Premiums varied state-by-state, based on premium rating and underwriting rules, differences in regional health care costs, demographics, and consumer benefit preferences. "Premiums were significantly higher in states with restrictions on premium variation and underwriting, often known as 'guarantee issue' and 'community rating,'" according to AHIP's release about the survey. "However, approximately 95 percent of the policies surveyed were sold in states where the average annual premium was under $3,400 for single coverage or $7,200 for family coverage." In addition, most plans had annual out-of-pocket spending limits less than $5,000 and average lifetime maximum benefits of nearly $4 million. Additional information about the guarantee access plan proposal is available. The survey is available.
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