The prospects for reforming the U.S. healthcare system brightened this week when the country's top insurers made a significant concession to consumer advocates: They offered to stop basing premiums on a policyholder's medical history. Although the concession came with strings attached, it removes one of the hurdles facing lawmakers as they struggle to overhaul the system.
Once the main opponents of sweeping reforms, health insurers now insist that they have the same objectives as consumer groups, doctors, hospitals and the government. The lobbying group America's Health Insurance Plans says insurers want universal coverage, lower costs and higher-quality care. Moving past those broadly shared goals, however, the factions continue to fight over many of the details, including whether to let federal health insurance programs compete directly with private industry, whether and how to rate the effectiveness of different treatment strategies, and how to squeeze overhead costs and inefficiencies out of the system.
One point of the whole exercise should be to close the loopholes insurers use to restrict coverage, revoke it or make it unaffordable for those most in need. These include such practices as rescinding coverage after a policyholder files a claim, denying coverage for preexisting conditions when someone applies for a new policy, and raising premiums on those who fall ill. Recognizing the momentum that's building, the insurers have been offering to end some of those practices in return for a requirement that every individual have health coverage. In particular, their lobbyists offered in December not to exclude coverage of preexisting conditions, and on Tuesday, they pledged to stop charging sick policyholders higher premiums than healthy ones pay.
The mandate sought by the insurers has its own set of problems, however. We like the idea of requiring everyone to carry health insurance because it spreads the system's cost more broadly. And without a mandate, there's little incentive for individuals to obtain insurance until they need medical care. On the other hand, it's senseless to require people to buy something they can't afford, so any proposed mandate is likely to be accompanied by government subsidies or expanded taxpayer-funded insurance programs. The latter may be the less expensive alternative, but lobbyists for private industry are firmly opposed to having government programs compete with health insurers. They argue that firms wouldn't be on equal footing with programs such as Medicare and Medicaid, which can dictate low reimbursement rates for doctors and hospitals rather than having to negotiate for them. These complexities show that policymakers still have a long way to go in crafting a healthcare plan that can attract broad support. But the industry's concessions have at least advanced the debate.