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Insurers key in health care reform

Insurers key in health care reform

LAS VEGAS--Insurers are a vital part of the U.S. health care delivery system and proposals to develop a government-run, single-payer system are wrong, said California Gov. Arnold Schwarzenegger.

"The private sector--not government--should run health care," Gov. Schwarzenegger told attendees at America's Health Insurance Plans' annual meeting June 20-22 in Las Vegas.

While states such as California, which has 6.5 million people without insurance, are leading efforts to facilitate coverage for the uninsured, the government must partner with the private sector to fix market inequities so everyone has coverage and access to medical care when they need it, he said.

Earlier this year, Gov. Schwarzenegger outlined a plan to require employers with 10 or more employees to provide health insurance or pay a 4% payroll tax into a pool to cover uninsured workers, who would be required to enroll in either an employer-sponsored or a state-sponsored plan.

Requiring everyone to have health insurance is important because it would dramatically reduce the so-called "hidden tax" that the insured population pays when insurers boost their charges to offset uncompensated costs of care for the uninsured, he said.

In the current system, employers are being hit with hefty health care cost increases each year--costs that are harming their ability to compete, Gov. Schwarzenegger said.

"It nearly is impossible to stay competitive with those kinds of costs, and you can't pass those costs on every year to the consumers," he said.

His proposal also would require insurers to devote at least 85% of all premium revenue directly to patient care. While the governor acknowledged that some insurers are not yet at that level, he said reducing administrative expenses and overhead is necessary if the state is to achieve universal health care coverage.

"If you want your industry to continue to thrive, you have to make sure that you provide a good product at an affordable price," Gov. Schwarzenegger said.

Insurance companies would benefit under the proposal because millions more people would be buying coverage from them. Insurers, though would have additional responsibilities, such as offering more products that emphasize wellness and preventive care, he said.

Gov. Schwarzenegger acknowledged that not everyone in the health insurance industry is in favor of the "guaranteed issue" provision in his proposal, requiring policies to be issued regardless of health status. But, he said, some of California's biggest health insurers have agreed to guaranteed issue if it is combined with an individual health insurance mandate.

"No one should be turned away because of age or because of some medical history," Gov. Schwarzenegger said.

If people cannot afford insurance, the government should help them get it, Gov. Schwarzenegger said. "But if they can afford it, then you should sell it to them," he said.