Insurance Industry Report

The health insurance lobby’s report has focused lopsided attention on the size of penalties for those who don’t get insurance—AHIP thinks they are too low in the Senate Finance bill.

We would agree with some of the health insurance lobby’s concerns, though certainly not their tactics. In this health reform process, all of us should be suspicious anytime we hear a group say, “we don’t like X” without also stepping up and saying, “and here is exactly what we want Congress to do to fix the bill.”

The House version of health reform (and the Kennedy HELP committee version) provides much of what the insurance industry says they want: stronger premium assistance and out-of-pocket caps for consumers, and has stronger individual and employer responsibility mandates. So, why is the industry not pointing to the House bill as the preferred option? Perhaps because the House also favors inclusion of a public option to be sold alongside for-profit plans in the new health insurance exchange.

Penalties for those who don’t buy insurance can only work if affordable coverage is available, and affordability must encompass both premiums and out-of pocket costs. It is only fair and reasonable to impose a penalty for the uninsured if comprehensive coverage at a fair affordable price is a reality. This is where the Finance bill is weaker than the House.

Large numbers of folks choosing to pay a penalty because they can’t afford the premium and staying uninsured is the outcome to be avoided. A few folks making this choice is inevitable in a system that offers that choice.