Insurance Reforms: President's Proposal Reforms Our Broken Insurance System

by Press Staff

(The second topic of today's bipartisan White House health insurance reform meeting is  insurance reforms.)

President Obama's proposal includes health insurance market reforms that will bring immediate benefits to millions of Americans, including those who currently have coverage.
 

  • Access to Affordable Coverage for the Uninsured with Pre-existing Conditions
  • Access to Quality Care for Vulnerable Populations 
  • No Pre-existing Coverage Exclusions for Children 
  • Re-insurance for Retiree Health Benefit Plans 
  • Closing the Coverage Gap in the Medicare (Part D) Drug Benefit 
  • Small Business Tax Credits 
  • Ensuring Value for Premium Payments 
  • Patient Protections 
  • Extension of Dependent Coverage for Young Adults 
  • Free Prevention Benefits 
  • No Lifetime Limits on Coverage 
  • Restricted Annual Limits on Coverage 
  • Protection from Rescissions of Existing Coverage 
  • Prohibits Discrimination Based on Salary 
  • Public Access to Comparable Information on Insurance Options 
  • Health Insurance Consumer Information 

(Read more about each of these immediate benefits.)


President's Proposal Reforms America's Broken Insurance System

  • Beginning in 2014, annual limits and restrictions on pre-existing conditions and other decision-making based on health status would be banned. Meaningful health reform absolutely requires that pre-existing condition exclusions be outlawed – Americans should be able to get coverage regardless of their health conditions.
  • Lifetime caps on benefits would be banned immediately.
  • Young adults could stay on their parent’s insurance until age 26.
  • Limitations are placed on insurers rating based on age and illness.
  • Insurers must cover lifesaving preventative benefits and eliminate the cost sharing when accessing these benefits. 
  • Administrative simplification requirements significantly reduce the red tape, and thereby reduce cost.
  • Appeals standards are created to protect consumers. 
  • HHS and the states would immediately begin to review and if necessary disapprove insurance company premium increases.
  • In 2014, Health Insurance Exchanges are created that provide the opportunity for people to comparison shop for coverage that meets their needs.  The Exchanges can negotiate with insurers to protect consumers and ensure that they get the most value for their dollars.  Plans in these exchanges will be required to cover an essential benefits package and meet consumer protection requirements.  

 
Why Insurance Reforms Are Needed

Insurance Companies Fail to Cover Millions of Americans

  • 56 million Americans who currently have insurance are subject to pre-existing condition restrictions that limit their insurance coverage because of their health history
  • Almost 13 million individuals were denied coverage due to pre-existing conditions in the previous three years
  • More than 1/3 of individuals seeking insurance are denied, charged higher premiums or offered limited coverage due to pre-existing conditions.
  • Almost any condition can be considered a pre-existing condition – Blue Shield of CA considers adoption, AIDS, anemia, arthritis, back sprain, breast implants, cleft palate, infertility treatments, kidney stones, pregnancy, sleep apnea, ulcers, and varicose veins as possible pre-existing conditions.
  • Young adults are the largest group of the uninsured in the U.S – more than one in four Americans (13 million) between the ages of 18-26 are uninsured, representing 30 percent of the uninsured.
  • More than half of Americans in employer-sponsored coverage (approximately 90 million) are subject to an annual or lifetime limit.  As a result of meeting a lifetime limit cap, approximately 20,000 to 25,000 people with employer-sponsored plans were effectively uncovered and de facto uninsured in 2009.


Insurance Company Premiums and Profits are Sky-Rocketing

  • The combined profits for the top five insurance companies -- UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Humana Inc., and Cigna Corp. -- hit new highs in 2009 – $12.2 billion in 2009, an increase of $4.4 billion or 56 percent from 2008, with Cigna Corp. reporting a profit increase of 346 percent.   Yet 2.7 million Americans lost their private health insurance in 2009, with four of the five companies showing losses in private enrollment.
  • Profits for the ten largest insurance companies increased 250 percent between 2000 and 2009, ten times faster than inflation. 
  • Anthem Blue Cross of California recently tried to increase individual market premiums by up to 39 percent.  Anthem of Connecticut is requesting an increase of 24 percent and Anthem of Maine has requested 23 percent premium increases.  In addition, Blue Cross of Michigan has requested a premium increase of up to 56 percent and Blue Cross of Oregon has requested a 20 percent premium increase.