Insurance Executive: Overhaul May Bring Disruptions

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Karen Ignagni, president and CEO of American's Health Insurance Plans, talks with Robert Siegel about her industry's concerns regarding the Senate health care bill. She says without cost controls, health care will be less affordable for millions of Americans and small businesses. She also says new regulations may cause disruptions for current policyholders.

ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MICHELE NORRIS, host:

And I'm Michele Norris.

It has been a long slog and it's not over yet, but early tomorrow senators plan to cast final votes on their health care overhaul. The vote is scheduled for 7 a.m. and then the senators can head home for the holidays. They'll return in January when they have their work cut out for them to resolve differences between their bill and the House bill. In the meantime, President Obama told us today in an Oval Office interview that despite how difficult to process has been he is very proud of the Senate's bill.

President BARACK OBAMA: This notion, I know among some on the left, that somehow this bill is not everything that it should be, that we still need a single-payer plan et cetera, et cetera, I think just ignores the real human reality that this will help millions of people and end up being the most significant piece of domestic legislation at least since Medicare and maybe since Social Security.

NORRIS: President Obama speaking with NPR in the Oval Office. You can hear our interview with the president elsewhere in today's program.

SIEGEL: In they lead up to the Senate's final vote, we've been checking in with big interest groups that have been busy lobbying Congress over the past year. Yesterday, we heard from the heads of the American Medical Association and the American Hospital Association. Today, a labor leader and the insurance companies, and we are going to start with the insurance companies. Karen Ignagni, is president and CEO of American's Health Insurance Plans, the big industry trade group, welcome back.

Ms. KAREN IGNAGNI (President, CEO, American's Health Insurance Plans): Thank you very much.

SIEGEL: Let me start by asking you what I asked the representatives of the AMA and the AHA. Liberals say the Senate bill is toothless and doesn't get at the fundamental problems of our health care system, conservatives seem view it as a harbinger of the apocalypse. For you, how big a bill is this Senate bill?

Ms. IGNAGNI: Well, it's an important step toward assuring all Americans that they will have health care coverage. But I do think the observation the liberals have made with respect to some of the concerns about cost are definitely correct. From a cost perspective, the focus of the legislation has been to significantly restrict everything that insurance plans spend and how they operate. But the point is that we are not driving health care cost. So, for a rank-and-file person�

SIEGEL: You would say you are reflecting cost which you would say are not being sufficiently�

Ms. IGNAGNI: The costs come to us and we package benefits so the drivers of health care costs have been largely ignored still.

SIEGEL: But this bill does seem to be a big win for the insurance industry. The government's planning to mandate that most uninsured Americans buy health coverage. You didn't want a public health insurance plan, a public option, competing with you and it's not going to be there. And yet your organization has made clear that you're not all that happy. You have problems with the degree of unprecedented regulation...

Ms. IGNAGNI: The public option is one part or was one part of this discussion. If you look at the bill, page after page is about how our health plans operate and there is an unprecedented amount of regulation. So, they have limited every part of how we operate. And then there has been a conscious effort not to necessarily take that same principal and carry it forth to the other stakeholders.

SIEGEL: But in terms of mandating coverage and in terms of ending the exclusions of people with pre-existing conditions ending lifetime caps, does all of that mean that the typical person who has a health insurance policy will see their premiums go up more or does the bill prevent you from increasing their premiums?

Ms. IGNAGNI: This is a very important point. What people will see is piece of mind knowing that they can get into the system and they will not be locked out. We support that principle, we advocated that principle. That's very important.

SIEGEL: But will they pay more for that piece of mind?

Ms. IGNAGNI: Well, the answer to that question depends on whether the mandate works. Will we have everybody covered? Will the younger and healthier people decide not to participate? Second, the so-called rating rules: In 85 percent of the country, they don't have the kinds of - anything near the kinds of restrictions that will be imposed in this bill which means that we will have to significantly - to meet these requirements, significantly increase the cost of services for people under 35.

SIEGEL: Just to give our listeners an idea here, I want you to give us a couple of - just name a couple of states where because of what state insurance regulations already exists where premiums are likely to go down and a couple of states where, given what regulations do or don't exist, premiums are much more likely to go up.

Ms. IGNAGNI: Massachusets is a very good example of premiums in the individual market going down. In New York, we will see premiums go down. California, Texas, Florida, Ohio a range of states around the country who are not in the category of guarantee-issue states or having rating bands will see costs go up. Just so people can understand, our rating band is a ratio between what you can charge the person who has the lowest cost, relative to the person who has the highest cost. The whole objective is to assure people that all of these changes will work and that the cost will be as they expect, which is affordable.

SIEGEL: Karen Ignagni, president and CEO of American's Health Insurance Plans, thank you very much for talking with us.

Ms. IGNAGNI: Thank you.

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