AHIP:  There is Still Hope for Health Reform

More ideas on reforming health care reform…..

Published 10/26/2010

America’s Health Insurance Plans (AHIP) President Karen Ignagni today started a speech about health reform by repeating Winston Churchill’s observation that, “You can always trust the Americans to do the right thing — once they have tried everything else.”

The quote drew laughs from audience members who had gathered for a briefing in Franklin, Tenn., organized by the Nashville Health Care Council.

Ignagni talked about her ideas for changing the implementation of health care reform to address what she believes to be a lopsided focus in the Affordable Care Act on accessibility, to the detriment of cost containment. The Affordable Care Act is the legislative package that includes the Patient Protection and Affordable Care Act (PPACA).

Ignagni recalled that, after President Obama’s election in 2008, the president noted that health care costs were crushing the economy. “They are still crushing the economy,” Ignagni said, “and unless we as a country can get our hands around that, we will not be able to move into the 21st-century health care system that all of us want to see.

A key sticking point, Ignagni said, is cost containment. “My cost containment is somebody else’s revenue suppression,” she said, citing the inherent difficulty in getting buy-in from stakeholders across the industry when it comes to implementing financially sound health care reform. She talked about a meeting AHIP held in 2006, when it decided to take a strategic role in what the group saw as an inevitable national discussion on health care reform.

“We went into the discussion with the position that all Americans should have access to health care coverage, that in the individual market people should not be denied based on pre-existing conditions, and that ratings should be done across the board and not by age and or gender,” Ignagni said.

AHIP also said any health care reform package that was going to succeed needed two things.

The first was universal access. In the states that have already attempted their own form of health care reform, having a system in which not everyone participated inevitably led to sharply increased pricing, Ignagni said. This rate shock, in turn, drove healthy participants from the system, which only further exacerbated cost problems.

The other crucial ingredient was cost containment. “We see data before others in the delivery system do,” Ignagni said. “We knew what was happening on the unit cost front. We knew it was going up quite significantly. We knew it was likely to continue, because we were seeing the bills. As a result, we pointed out to Congress that now is the time, as we think about getting everyone in, to think about laying down enduring cost containment.”

Ignagni said several key components of health reform need to be re-evaluated by both the private and public sectors. Those components include malpractice reform, the overall cost of health care (which, she noted, amounts to an additional 3% sales tax on small businesses in addition to increased premiums), adjusting ratings bands so that young familes do not bear an excessive share of health care costs, and implementing a mandate for health care.

“For the states that have already tried this, there have been massive problems if everyone doesn’t participate,” Ignagni said.

The federal health care mandate imposes only a $95 penalty—or 1% of income, whichever is greater—in year one, Ignagni said. “If you’re facing a $20,000 hospital bill, $95 is not very much,” she said. “Add to that the compression of ratings bands, the sales tax in ’14, and we have sown the seeds for a major problem.”

Ignagni laid out a 5-part solution for sustainable health care.

  1. The Obama administration should continue its work at making sure the transition steps needed to implement heath reform cause as little disruption to the current system as possible.
  2. More has to be done to ensure that employers can keep the health plans they have.
  3. Renew the focus on cost containment.
  4. Promote health care delivery and payment reform, by, for example, helping to come up with definitions for the services that should go into standard bundles of hospital services.
  5. Do more to improve the safety and effectiveness of care. “Too many are still on the wrong end of medical errors,” Ignagni said.

Ignagni concluded by saying that the current health care system has an opportunity to move forward in a way that the economy can be sustained, there can be relief on cost, and improvements can be made to productivity, value and consumer satisfaction. She also noted that the ideal solution would be a blend of both public and private resources.

“There are a number of forks in the road, and many paths left to travel,” she said, “but the path that all of us have a strong stake in is one that makes health care sustainable and workable and cost effective not just for the next decade, but for the next generation.”


  1. Steve Saucier

    Thank you for your reply. Since this was a post attributable to remarks made by (AHIP) President Karen Ignagni, we are not in position to defend her statements. However, your inquiry has peeked our curiosity. What, specifically, are you in disagreement on? And what evidence do you seek?

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