Health Insurers Urge Congress To Extend Coverage To The Uninsured

With the goal of providing health care coverage for all children within three years and most adults within a decade, the insurance industry group America's Health Insurance Plans (AHIP) has proposed an expansion of public health insurance programs and federal subsidies for the purchase of private coverage.

In a recently published report outlining its proposals, "A Vision For Reform," AHIP observed that the estimated 46 million Americans lacking health insurance have fallen between the cracks. "They may not be living in absolute poverty and they may not qualify for public programs, but they are simply unable to afford health care coverage," the report said. "Or perhaps they work for employers that are too burdened by global competitive pressures to offer health insurance."

In the report, AHIP called upon Congress to enact legislation that would provide significant incentives to states to broaden eligibility requirements for enrollment in existing public programs. Specifically, the association proposes expanding the State Children's Health Insurance Program (SCHIP) to make eligible all uninsured children from families with incomes below 200% of the federal poverty level and all adults with incomes under 100% of the federal poverty level.

In addition, AHIP called upon the federal government to provide subsidies for the purchase of private health insurance to families and individuals with incomes below 400% of the federal poverty level. The amount of assistance offered would be proportionate to income. AHIP recommends encouraging recipients of the premium subsidies to obtain coverage through their employers or private insurers.

Noting that some six million of the uninsured have incomes above 400% of the federal poverty level, AHIP said it favors creating tax incentives that would encourage these individuals to purchase private insurance. At the same time, however, AHIP said it opposes any changes to the current tax treatment of employer-sponsored health care plans.

The association further called for the establishment of a new Universal Health Account (UHA) that would allow full tax deductibility for health insurance premiums and qualified medical expenses. Under the AHIP proposal, the federal government and the states would match a portion of contributions made by low- to moderate-income families.

To achieve these goals, AHIP urged Congress to increase funding to states for SCHIP and premium assistance programs. The full implementation of these proposals would cost the federal government approximately $300 billion over a 10-year period, according to AHIP.

George Halvorson, chairman and CEO of Kaiser Permanente and chairman-elect of AHIP, said, "The access crisis causes millions of Americans to forgo the preventive care and treatment for chronic illness that they need. By ensuring everyone has access to coverage, we can make families more secure, workers more productive and, ultimately, make this a healthier nation."

While the 2006 midterm elections produced a Democratic majority in Congress that could favor the AHIP plan, critics have pointed out that full coverage will be difficult to achieve without mandates on individuals and employers, and that the proposals fail to address the pressing problem of rapidly growing health care costs. Observers have also noted that AHIP members would benefit directly from increased enrollment in health care plans.