Health insurers ask gov't. to police their industry

[May 06, 2009]  WASHINGTON (AP) -- Health insurance companies are offering new concessions, including lower rates for millions of women, as they try to persuade Congress not to set up a government health plan to compete against them.

On Tuesday the industry offered to do away with an insurance surcharge that affects 5.7 million women, many of them self-employed and needing to buy their own coverage. Insurers also offered to accept new consumer protections.

Insurers want to prevent the creation of a government health plan that would enroll middle-class workers and their families. President Barack Obama and many Democrats favor such a plan, but the companies say it would drive them out of business. Employer groups are also leery, fearing a public plan would entice young, healthy workers by offering lower premiums.

"We are not asking people to trust us, we are asking people to trust government," Karen Ignagni, president of America's Health Insurance Plans, told a Senate panel that is crafting sweeping legislation to overhaul the nation's $2.5 trillion health care system.

Although the bill won't be written for weeks, insurers and other interest groups are trying to shape it now.

Instead of a government plan as a check on their industry, insurers are offering to accept stricter government rules they contend would add up to a fairer marketplace and cut into the ranks of the 50 million uninsured.

"We are comfortable with that," Ignagni told the Senate Finance Committee at a session on how to cover the uninsured. She was part of a large panel including representatives from business, labor unions, insurers, consumer groups and public policy centers.

Finance Committee leaders want to bring a bill to the Senate floor this summer. The broad outlines will follow Obama's campaign proposal, which builds on the current system of shared responsibility among employers, government and individuals.

Most Americans -- men and women -- are covered through employer plans, which are prohibited from charging higher premiums because of gender, poor health or other similar factors. Only about 9 percent purchase their own health insurance.

It's in this group that women face higher rates. That's health care costs for women tend to go up during childbearing years. Some policies don't cover maternity care.

Sen. John Kerry, D-Mass., suggested such practices amount to discrimination.

"The disparity between women and men in the individual marketplace is just plain wrong and it has to change," said Kerry.

Ignagni readily conceded. "We don't believe gender should be a subject of rating," she said.

Lowering premiums for women may not necessarily mean that men will have to pay more. Many factors go into setting insurance rates. Age, for example, carries much greater weight than gender.

Insurers have already offered to stop denying coverage to sick people, and to end the practice of charging higher premiums to those with a history of health problems. In exchange, the industry wants Congress to require all Americans to carry health insurance, either through an employer plan, on their own, or a current government program like Medicaid.

What insurers want to avoid is a new government plan that would be open to middle-class workers and their families. Obama says such a plan would help keep private industry honest.

[Associated Press; By RICARDO ALONSO-ZALDIVAR]

Associated Press writer Erica Werner contributed to this report.

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