Insurers' reform plan calls for cutting spending by $500 billion

Less than six months after kicking off its health reform campaign in Columbus, the health-insurance industry has unveiled a plan that calls for mandatory health coverage and a 30 percent reduction in health care spending over the next five years (Source: “Health insurers offer reform plan,” Columbus Dispatch, Dec. 3, 2008)

America’s Health Insurance Plans, the industry’s trade association, unveiled its reform plan yesterday in anticipation of legislation that is expected soon after Barack Obama takes office in January.

Cutting waste in the health care system is a major priority of AHIP’s reform plan, which calls for cutting $500 billion in spending in five years. The plan also calls for increased spending on safety net programs.

The release of the plan coincided with the release of an AHIP-sponsored study from PriceWaterhouseCoopers that found that health insurance premiums have slowed to less than half the growth rate from five years ago, from 13.7 percent from 2006 to 2007 to 6.1 percent from 2006 to 2007. According to the study, 25 percent of the premium increases in 2007 were the result of increased utilization, 46 percent from general inflation and 30 percent from health care price increases in excess of inflation.