AHIP Statement on the Release of Proposed Senate Legislation

/PRNewswire/ -- Karen Ignagni, President and CEO of America's Health Insurance Plans (AHIP), released the following statement today on the release of proposed Senate legislation:

"The promise of health care reform is that it will provide all Americans coverage, allow them to keep their coverage if they like it, and bends the cost curve to put the system on a sustainable path. These are the standards by which any reform bill should be judged, and the Senate bill falls short of meeting them. We believe that these issues can be addressed and improved to achieve these goals, and we will continue to work with policymakers toward that end.

"We believe that all Americans, regardless of health status or medical history, should have guaranteed access to affordable coverage. We have proposed guarantee issue coverage with no exclusions for pre-existing conditions in conjunction with a coverage requirement and adequate subsidies for working families. We also have made a commitment to do our part by proposing far-reaching administrative simplification reforms that improve efficiency, reduce costs, and free up time for physicians to focus on patient care. We stand by these commitments, but agree with a wide range of health policy experts that market reforms will not work if there is not an effective coverage requirement.

"This proposal encourages people to wait until they are sick to purchase coverage, which will significantly drive up costs for those who are currently insured. The legislation also imposes rating rules that will raise the cost of coverage for millions of young families in more than 40 states.

"The new health care taxes and fees will raise the cost of coverage for individuals, families, and employers. Health plans will be required to pay a $6.7 billion tax beginning next year for the next 10 years, in addition to 'stabilization' fees of $25 billion in 2014, 2015, and 2016. According to Fortune magazine's analysis of the companies listed under 'Insurance and Managed Care,' earnings in 2008 totaled $8.61 billion with a profit margin of 2.2% -- ranking the industry 35th on the Fortune list.

"This bill will also exacerbate the health care cost shift as health care providers offset reductions in public program reimbursements by charging more to families and employers who have private coverage. The new government plan will cause even more cost-shifting and threaten the employer-based coverage with which Americans are overwhelmingly satisfied.

"The $117 billion in cuts to Medicare Advantage will threaten the choices that seniors have across the country and significantly reduce seniors' benefits in many major metropolitan areas.

"Congress is being forced to turn to these financing mechanisms because it has been unwilling to make a commitment to specific strategies and enforceable objectives that will bend the health care cost curve downward."

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