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Health Insurance Industry’s Smoke and Mirrors ‘Reform’ Proposal

(North Star) - Alarmed about the likelihood of substantive national reform legislation, the trade association for the U.S. health insurance industry recently wrote to four key U.S. senators offering to stop denying coverage based on pre-existing medical conditions.

Although the media mostly greeted this proposal as a major breakthrough, at least one more knowledgeable observer was not nearly as impressed. The entire letter is an empty gesture riddled with loopholes and really scary language, warns a Florida health insurance sales agent who has read the document.

It also sends a curiously mixed message about competition.

Although the letter from America’s Health Insurance Plans mentions “transitioning to a reformed system in which health-status-based rating is no longer used,” it immediately adds the caveat that “rating flexibility based on age, geography, family size and benefit design is needed to maintain affordability.”

“As people age, they incur more health care costs, so rating based on age is essentially health-status-based rating,” says John Sinibaldi, a St. Petersburg-based health insurance broker who specializes in policies for companies with 50 or fewer employees. “This whole letter is smoke and mirrors.”

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