Shays sponsors plan to make health insurance affordable for all

HEALTHCARE

Norwalk Hour

Erin Kutz

Boston University Washington News Service

February 15, 2008

WASHINGTON – Presidential campaigns are not the only front in the debate over expanding health care coverage across the nation. As presidential candidates have laced their stump speeches and debates with talk of overhauling health care, U.S. Reps. Christopher Shays, R-4, and James Langevin, D-R.I. have made a bipartisan effort of their own to bring about affordable insurance for all.

The duo introduced legislation Monday that would require that all U.S. citizens and legal immigrants be enrolled in a health insurance plan at least equivalent to the plan that covers U.S. government employees. Any residents not covered by another program could enroll in a plan in Shays’ proposal.

Shays’ American Health Benefits Program would provide affordable insurance, as it offers a range of plans through various private insurance companies, Shays argued. He added that costs would become lower as a bulk of enrollees would allow the government to bargain for better prices. People would have the option of carrying their health plan with them even as they switch jobs and those who fail to obtain insurance would be automatically enrolled in the least expensive plan  in their region

While presidential candidates have proposed the expansion of the federal employees health insurance and have lauded the need for affordable health care insurance for all, Shays argued that his bill represents a concrete step in that direction.

“They’ve advocated it but they haven’t written the bill,” Shays said. “So we’re very eager to have them take look at it” once elected.

The bill would require the federal government to pay nearly three-fourths of the insurance premium, which would cost nearly $540 billion annually but would be heavily funded by a payroll tax levied on employers who don’t already offer health benefits. Individuals would pay the balance of the costs. Employers who offer coverage equivalent to American Health Benefit Program could continue to do so.

Even with the premium, the federal employee benefits may be far more extensive and pricey than what healthy or less affluent people are seeking, said Devon Herrick, senior fellow and health economist at the National Center for Policy Analysis, a conservative think tank.

“The Federal Employees Health Benefits Program is a very rich set of benefits,” Herrick said. “What if I don’t want that benefit?”

Herrick also worried that special interest groups lobbying on what constitutes necessary coverage could further drive up the cost of the healthcare plans. He said proposals that offer the same health tax-credit to everyone would better allow persons to choose how much they want to spend and how much coverage they want.

WellPoint, Inc., the largest commercial health benefits company in the country, favors health care proposals that offer consumers choice.

“In contrast to past health care reform efforts at the federal level, those being discussed this year focus on expanding coverage while maintaining the choices available to our individual members and employer customers,” Shannon Troughton, vice president of communications at WellPoint, said in an email. “We believe this reflects good public policy.”

Shays’ plan would prohibit insurance companies from denying prospective enrollees coverage because of poor health. Troughton said this guaranteed coverage would burden the entire health insurance system and instead advocated for the continued use of high-risk pools — nonprofits created by states to cover healthcare costs for those who have been rejected by insurance companies for medical reasons.

“Requiring insurers to offer coverage to individuals regardless of their health or ‘guarantee issue’ creates an incentive for people to wait to obtain health coverage until they are sick,” she said. “This has been tried in several states and in every state with such reforms, premiums have increased dramatically and insurers have left the market.”

Under Shays’s proposal, the government also would subsidize co-payments for doctor visits, a hurdle that often keeps low-income people with insurance from seeking medical care. The plan calls for the government to completely cover co-payments for individuals under 125 percent of the federal poverty level. All children and pregnant women in families under 250 percent of the federal poverty level would receive complete co-payment subsidies.

Shays said he hopes to get feedback from the employer and health care community in his district. Small businesses could especially benefit from the program because they won’t have to bear as heavy a burden of health insurance premiums for their employees, Shays said.

Shays predicted the bill could take two to four years to pass.

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