Insurance industry offers concessions in exchange for scrapping public option

Speaking before a Senate health reform panel, the president of the insurance industry’s trade association said insurance companies would be willing to reduce rates for women and accept closer federal regulation if it meant reform plans did not include a government health plan (Source: “Health insurers offer lower women's rates,” Columbus Dispatch/Associated Press, May 6, 2009).

A rate change could affect 5.7 million women, most of whom are self-employed and purchase insurance in the individual market. Employer plans are prohibited from charging higher premiums based on sex, but that rules does not apply to the 9 percent of insured Americans who purchase their own policies. Women typically are charged higher rates because potential health care costs are higher for women during their child-bearing years. 

The inclusion of a public health insurance option, which is favored by President Obama and many Congressional Democrats, would likely drive private insurers out of business by offering lower premiums, said Karen Ignagni, president of America’s Health Insurance Plans.

Insurers already have offered to stop denying coverage to sick people and those with preexisting conditions. In exchange, the industry wants Congress to require all Americans to carry health insurance, either from an employer, on their own, or in a current government program such as Medicaid.