WASHINGTON -- The nation's health insurers offered Tuesday to stop basing people's premiums on their health and extend coverage to all Americans regardless of pre-existing conditions -- provided that everyone gets insurance.
The suggestion from Karen Ignagni, president of America's Health Insurance Plans, came at a Senate hearing and in a Newsmaker session with USA TODAY. It marked the first time the insurance industry, which represents nearly 1,300 companies insuring more than 200 million people, has made such a proposal.
Since calling for a major overhaul of the nation's health care system last month, President Obama has noted the cooperation of the system's major stakeholders: doctors and hospitals, businesses and consumers, drugmakers and insurance companies. Tuesday's proposal marked one of the first concrete steps forward in the process.
"This is a major step, and it changes everything about how the market works," Ignagni told USA TODAY. Insurers, she said, are prepared to "offer coverage to everyone who applies."
In return, however, they want a system similar to the one that now exists only in Massachusetts, in which all residents are required to get insurance. Insurers want the federal government to help those who cannot afford private insurance with subsidies or tax breaks.
Insurers also want to prevent any new system from including a government insurance plan similar to Medicare. Ignagni said such a plan could attract 100 million people who now have private insurance, because the government can bargain for lower rates with providers.
The offer came in a letter to leaders of Senate committees overseeing health issues from Ignagni's group and the Blue Cross and Blue Shield Association. The White House declined to comment. Consumer groups cited modest progress.
"We're pleased to see the insurance industry offer a solution to one of the major problems in our health care system," said DeAnn Friedholm of Consumers Union. "But this offer should not be a substitute for a public health insurance plan, which could ultimately raise the bar for the health care system."
Insurers played a major role in the last big effort in 1993-94 to overhaul health care. They paid for a series of ads dubbed "Harry and Louise," in which a couple complained about President Clinton's plan, which died in Congress.
This year, with 46 million people uninsured and costs rising faster than inflation for others, there is agreement from all stakeholders that the system is inadequate. Obama set aside $634 billion in his proposed 2010 budget to partially fund an overhaul. Half would come from reduced Medicare and Medicaid payments, half from new taxes on couples earning more than $250,000.
Unlike Clinton, Obama has not suggested how the system should be changed. He has left that largely up to Congress, which will try to write legislation in hopes of passage in the fall. Senate Finance Committee Chairman Max Baucus, D-Mont., wants to act quickly because of next year's elections.
To see more of USAToday.com, or to subscribe, go to http://www.usatoday.com
Copyright 2009 USA TODAY, a division of Gannett Co. Inc.