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Guaranteed Coverage on Pre-Existing Conditions and Individual Coverage Mandate Proposed by Health Plans

Guaranteed Coverage on Pre-Existing Conditions and Individual Coverage Mandate Proposed by Health Plans

Health Plans today have put forward this proposal that a guaranteed coverage for pre-existing medical condition along with an individual coverage mandate would be extended to applicants.

According to this proposal, health plans which are operating in the individual health insurance market will be required to provide coverage to all applicants as a part of a universal participation program in which all individuals will need to maintain health insurance.

Health Plans have also expressed that their observation was that support in terms of premiums to moderate-income people and spread of risk across a broad spectrum was very necessary to promote the affordability as well as maintain stability for premiums in the individual insurance market.

Health Plans have also reiterated that, they have had a long-standing support in terms of ensuring all Americans to be covered and that every American living in poverty to be eligible for Medicaid, and also making the Children's Health Insurance Program more robust.

Karen Ignagni, President and CEO, AHIP said that coverage for all is very much a possible reality and can be done by building on the existing system.

The announcement has followed a nationwide campaign undertaken by AHIP as a part of its “Campaign for an American Solution”. This was the result of repeated concern raised across the country for coverage on pre-existing medical conditions, continuity of coverage between changing jobs and the affordability factor for those already having insurance.

Ignagni further confirmed that the company's Board of directors had been responding to the concerns through a solution which ensures that no one is left out of the health care program because of their age, income and health condition or employment status.

The new proposal is an extension to the comprehensive plans of reform which were being released by the AHIP Board of Directors since November 2006. It can be anticipated that further proposals would be released which address to issues regarding the affordability, accessibility and quality of Health Care in coming weeks.

Summary of the AHIP Proposal to guarantee coverage for pre-existing conditions and to spread affordability in the individual insurance market:

No pre-existing medical conditions would be excluded from the guarantee-issue coverage.

Establish an individual coverage need with an insurance verification system, through an automatic enrollment process with ensures effective enforcement so that all individuals purchase and maintain insurance coverage.

Promotion of Affordability: Through provision of refundable and advance tax-credits for moderate-income group (individuals and families). Provision of tax equity in cases where insurance coverage is given through an employer or the individual insurance market.

Ensure stability in premium for existing insured people through a mechanism of broadly funded reimbursement which spreads costs to for the high-risk individuals.

Brief History of the Guarantee Coverage Issue and Individual Market:

A Survey conducted by the AHIP on the individual insurance market revealed that insurance purchased individually is much more accessible and affordable than is commonly known. The extent was till such an extent that 9 out of 10 applicants who were undergoing medical underwriting were being given coverage. Moreover the plans provide considerable financial protection and a wide range of benefits, including coverage of mental health, prescribed drugs and preventive care or immunization.

Since there are a lot of individuals who are unable to purchase insurance from the private market, because of their health status, the approach taken by the states to address this issue was through the enactment of guarantee issue legislation wherein health plans needed to provide coverage to all applicants. However these reform plans in the past have resulted in undesirable consequences like high premium costs for all policy holders.

According to a report released by the Milliman Inc. it has discovered that the enactment of guarantee law might lead to people deferring to seek coverage until they are faced with some health situation. His would very obviously cause problems for those who already insured in terms of costs. The report clearly states that it has been found that states in which such laws have been implemented have seen an unprecedented rise in insurance premium, decrease in number of people individually insured and no change in the number of people uninsured.

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