Insurers offer to stop charging sick people more

[Guest guest]

Insurers offer to stop charging sick people more

By Alonso-zaldivar, Associated Press Writer

WASHINGTON – The health insurance industry offered Tuesday for the first time to

curb its controversial practice of charging higher premiums to people with a

history of medical problems.

The offer from America's Health Insurance Plans and the Blue Cross and Blue

Shield Association is a potentially significant shift in the debate over

reforming the nation's health care system to rein in costs and cover an

estimated 48 million uninsured people. It was contained in a letter to key

senators.

In the letter, the two insurance industry groups said their members are willing

to " phase out the practice of varying premiums based on health status in the

individual market " if all Americans are required to get coverage.

" The offer here is to transition away from risk rating, which is one of the

things that makes life hell for real people, " said health economist Len Nichols

of the New America Foundation public policy center. " They have never in their

history offered to give up risk rating. "

Insurers are trying to head off the creation of a government insurance plan that

would compete with them, something that liberals and many Democrats are pressing

for. To try to win political support, the industry has already made a number of

concessions. Last year, for example, insurers offered to end the practice of

denying coverage to sick people. They also said they would support a national

goal of restraining cost increases.

The latest offer goes beyond that.

Insurance companies now charge very high premiums to people who are trying to

purchase coverage as individuals and have a history of medical problems, such as

diabetes or skin cancer. Even if such a person is offered coverage, that

individual is often unable to afford the high premiums. About 7 percent of

Americans buy their coverage as individuals, while more than 60 percent have

job-based insurance.

" This changes everything, " said Ignagni, president of America's Health

Insurance Plans, the leading trade group. " When you have everyone in the system,

and you can bring (financial) assistance to working families, then you can move

away health status rating. "

The companies left themselves several outs, however. The letter said they would

still charge different premiums based on such factors as age, place of

residence, family size and benefits package.

And importantly, the industry did not extend to small businesses their offer to

stop charging the sick higher premiums. Small employers who offer coverage can

see their premiums zoom up from one year to the next, even if just one worker or

family member gets seriously ill.

Ignagni said the industry is working on separate proposals for that problem.

" We are in the process of talking with small business folks across the country, "

she said. " We are well on the way to proposing a series of strategies that could

be implemented for them. "

http://news./s/ap/20090324/ap_on_he_me/insurers_sick_people_11