Does the Health Insurance3 Industry Care About the Uninsured?

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What is the Health Insurance Association of America (HIAA), the leading trade association representing for-profit insurance companies, proposing to help the uninsured in this country? The resolution of this, a vitally important public policy issue, will have an impact on the lives of some 42 million uninsured Americans.

Writing in a news release from earlier this year, Chip Kahn, president of HIAA, explains that his organization has proposed a very ambitious program called Insure USA (www.insureusa.org). This program covers not only people with incomes below the federal poverty level ($8,550 individual, $11,376 couple), but also those who are working but can't afford to pay full insurance premiums. Another aspect of the Insure USA program is the creation of an insurance program for those people who cannot purchase private health insurance because of poor health.

How exactly does HIAA propose to finance the program? The core of the plan is a voucher system, financed through the federal and state governments. These vouchers are used to purchase private insurance or may be applied to the cost of insurance purchased through an employer. Each voucher is worth approximately $2,000--75 percent of the average Federal Employee Health Benefit premium--with the shortfall picked up by the individual.

The real sticking point, though, is what type of insurance can you purchase for the value of the voucher? Given that the average per employee spending by businesses is about $3,800, that $2,000 voucher probably won't buy you much insurance coverage. The situation becomes even more critical if you need family coverage.

Ability to purchase insurance coverage aside--what about those people ineligible to purchase private insurance because of poor health? For these folks, HIAA proposes that the federal government encourage states to create high-risk pools. Federal seed money would help establish these risk pools and also aid the states in defraying the cost of purchasing insurance for these high-risk people. Thus far, Congress has given no indication that it favors legislation creating these risk pools, let alone, funding them.