Senate Panel Gets An Earful on Expanding Coverage

Janice Simmons, for HealthLeaders Media , May 6, 2009

At the Senate Finance Committee roundtable hearing on expanding healthcare coverage on Tuesday, Sen. Charles Grassley (R-IA) summed up the tempo of the day when he said "there are no easy issues when it comes to coverage."

In comparison to the first roundtable two weeks ago on reforming the delivery system, discussions veered back and forth on public and private solutions—under a variety of different names.

Sen. Deborah Stabenow (D-MI) brought up the term "consumer driven public plan," which focused on support of a public insurance option. Sen. John Cornyn (R TX) responded by nicknaming it the "Washington directed unfair competition" plan.

And Sen. Charles Schumer (D-NY) introduced toward the end of the three-hour hearing his "Plan USA" that looked to shift the committee's discussion from whether to create a public health insurance plan to how a public plan could work.

"We don't want the public plan to be the same as the private plan. There are certain advantages that the public side has . . . [but] it is almost like you're saying let's preserve advantages of private plan but not of public plan," Schumer said. "Let them compete."

Some Hill observers view the Schumer plan as a compromise to help bind up the disagreements between Democrats and Republicans over public plans dividing the Finance Committee. Without some type of agreement, the panel could be held up from having a bill completed by June, as desired by Chairman Max Baucus (D-MT).

Under the Schumer proposal outlined at the hearing, any public plan discussed:

  • Should be self sustaining--paying claims only with money raised from premiums and copayments.
  • Should pay physicians and hospitals more than what Medicare pays.
  • Should not compel physicians and hospitals to participate in a public plan just because they participate in Medicare.
  • Should have separate officials who manage a public plan and who regulate the insurance market.
  • Should be required to establish a reserve fund, just as private insurers must maintain reserves to pay claims.
  • Should be required to provide the same minimum benefits as private insurers.

But discussion turned also to regulation of the current healthcare system. Surprisingly, this was brought up by America's Health Insurance Plans (AHIP), which represents the country's manage care organizations. It had noted in its testimony that "a new public plan" was not necessary to achieve healthcare reform.

Instead, AHIP's President and CEO Karen Ignagni acknowledged that it's "radical for an industry working in a market" to say "renovate the rules," and "here's the road map," she said.

"In our proposals, we have recommended a full-scale reform and complete overhaul of the rules associated with the individual market," she said.

The problem that health insurers have faced over the years is that people in the individual markets generally have waited until they needed insurance to purchase, Ignagni said. "So we stepped back and said how do we solve this problem?"

AHIP's proposals were to: "guarantee that everyone gets insurance coverage; nobody falls through the cracks because of preexisting conditions; and no health status rating would be placed on an individual so that no one would be discriminated against or penalized because of their prior healthcare status.

"This would level the playing field . . . This would be wholesale reform," Ignagni said.

Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at

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