Health Insurance Companies Question Obama's Health Reform Plan

Health Insurance Companies Question Obama's Health Reform Plan in Politics and Legislation

Even though the health insurance industry has backed a plan which will require them to accept all applicants regardless of pre-existing health conditions, they still have their doubts about the incoming president’s health reform proposal.

One part of President-elect Barack Obama’s proposal isn’t sitting so well with health insurance companies — the National Health Insurance Exchange.

In this Exchange program, Americans would have a choice between a private plan and a government-sponsored plan. The idea behind the Exchange is that you can combine market forces with government intervention when it comes to reform.

According to incoming Health and Human Services Secretary, Tom Daschle, the government plan would be modeled after Medicare, reported The New York Times.

The Medicare-like plan would compete with plans provided by private companies who participate in the Exchange. This would, proponents argue, enable more competition in the market and drive down rates.

Not necessarily true, says the insurance industry.

Their argument is that the Exchange won’t do anything to make health insurance and health care more affordable — in fact, the opposite.

The health insurance industry points out that the Medicare-modeled plan would likely underpay doctors and hospitals for their services. This would cause providers to increase their prices for private plans to balance out their loss from the government plans.

“A new public program similar to Medicare would exacerbate cost-shifting, which already adds $1,500, or 10 percent, to the average premium for a family of four,” said Karen Ignagni, the president of America’s Health Insurance Plans.

And it seems as if the president-elect is keeping his word about working across the aisle and giving everyone a seat at the negotiation table.

The incoming Obama Administration has already scheduled thousands of meetings to discuss reform, and all parties are welcomed.

“These are listening sessions. We are trying to find people who share Obama’s goal of health care reform, even if they disagree on the specifics,” said Stephanie Cutter, who is the spokesperson for the Obama transition to the White House.

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