America’s Health Insurance Plans (AHIP) an organization that lobbies for, and represents, most of the major health insurance companies in the U.S. has said they will support a plan that will prohibit insurers from denying anyone coverage because of a pre-existing health condition.
But there’s a stipulation — they want to a universal health insurance mandate for the entire country, reported the Associated Press.
This is big news.
Back in the early 1990s, then-President Bill Clinton and then-First Lady Hillary Clinton failed to pass a law requiring all Americans to obtain health insurance because of strong opposition from the insurance industry.
But now that health insurance industry has backed such a proposal combined with Democratic control of both Houses of U.S. Congress and the White House, it significantly increases the chances of a universal health insurance mandate in the next two years.
“We hope this will be a contribution to help members of Congress fashion their proposal, ” said Karen Ignagni, president of AHIP.
So why did AHIP make this statement? And why do they insist on a universal health insurance mandate?
Well, we, the Research Team, have a couple hypotheses about AHIP’s statement.
The first, already mentioned above, is that Democrats have control of both the executive and legislative branches of government. This alone could mean a sweeping health care system shake up regardless of insurance industry support.
AHIP possibly could have assumed that big changes were coming anyway, and they might as well start trying to position themselves now.
Secondly, a universal mandate almost guarantees that the premiums of the healthy will subsidize the cost of care for those with pre-existing conditions.
Insurance companies must spread risk when they provide coverage. In other words, the premiums of the healthy have to pay for the health care of the sick — otherwise insurers could not provide coverage to anyone.
If a law was enacted that prohibited insurers from denying coverage, it’s likely that a vast majority of newly insured people would have health conditions. But that would mean insurance companies would be collecting fewer premiums and paying for more health care bills.
So if everyone was mandated to have health insurance, this would all but ensure enough risk is spread around so health insurance companies can afford to pay for the health care of the sick (and make a profit).
Any thoughts?