A new paper from America’s Health Insurance Plans (AHIP) takes a pro-active approach to the health care coverage debate. In Guaranteeing Access to Coverage for All Americans, AHIP addresses a number of hot button issues. Notably, the proposal would guarantee access to insurance coverage for individuals –including those with pre-existing conditions and higher than average medical costs–, allow third-party review of recission decisions and pre-existing conditions, and cap premium levels for high-risk members at 150% of the base rate. The proposal, which is modeled on existing high-risk pools, relies on states and other funding sources to ensure affordability and to encourage individuals to purchase insurance.
I like the principles outlined in the proposal. In particular, “Guarantee Access” is a pragmatic alternative to guaranteed issue and community rating. The emphasis on encouraging widespread purchase of insurance is self-serving but also a legitimate public policy goal. After all, as employers reduce coverage it’s more often younger, healthier people who lose access to coverage. That raises costs for those remaining in the risk pool, who tend to be older and sicker.
Under the AHIP proposal, individuals who are denied insurance coverage –or offered substandard coverage– can apply for the Guarantee Access program. Those whose expected medical claims are 200% of the average will be eligible for a Guarantee Access Plan, again at 150% or less of the standard rate. Of course, some sort of subsidy will be required to make that work. Improvements in predictive modeling enable the health plans to more accurately place people in a specific cost category.
I expect the concepts in the proposal to be viewed reasonably favorably. They are compatible with the mainstream Presidential candidates’ views and most of the state-led reform efforts (though not, of course, with single-payer). The proposal is consistent with a push toward higher levels of coverage, promoting individual responsibility, and reducing the fear of losing access to health insurance or entering medical bankruptcy. It’s also compatible with increasing the portability of health insurance, which is key to enhancing labor market flexibility.
Expect some pushback, though, on the numbers. In particular, critics will point out that 200% is a modest threshold for putting someone in the high cost category. The proposal is also silent on how the plan will be funded.
I also wonder why AHIP calls the plan “Guarantee Access” instead of “Guaranteed Access.”December 19, 2007