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The AHIP Plan In Context

By Igor Volsky on December 3, 2008 at 5:00 pm

"The AHIP Plan In Context"

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hillaryin1992-thumb.jpgWhile considering the merits of AHIP’s latest health care proposal, it’s important to keep in mind that the organization — under its previous incarnation as Health Insurance Association of American (HIAA) — embraced universal coverage once before, during Hillary Clinton’s efforts to reform the system.

Back in December of 1992, HIAA called for “a new Federal law that would require coverage for all Americans, define the basic set of benefits, and try to contain health care costs by limiting tax breaks for the purchase of insurance“:

- Every American was required to buy ‘an essential package’ of benefits

- The government would help define the essential package and private insurers would provide the standard package “regardless of a person’s medical history”

- Only the essential package would be protected from taxation. If employers bought more than the basic benefits, the premiums pad for the extra coverage “would be treated as income to the employees, and they would have to pay income tax on it.”

- The government would work with private insures to “stabilize health-care prices” and make sure private insures and government programs pay similar amounts for the same services in the same geographic area.

Recall that HIAA’s cooperation with reform did not last long. The insurers, afraid that the regional alliances in the president’s bill would bar some smaller insurers from the marketplace, opposed the plan’s premium growth constraints and rejected community rating. Seeking to “plant seeds of doubt” about Clinton’s reforms, the HIAA developed the influential Harry and Lousie ads, organized grassroots campaigns, hired field operatives in six states whose lawmakers were expected to be swing votes, and recruited ground troops from members companies’ networks of employees, managers, and agents.

By the end of its campaign, HIAA generated more than 450,000 phone calls, visits, and letters to Congress. “The government may force us to pick from a few health care plans designed by government bureaucrats. Having choices we don’t like is no choice at all. They choose. We lose,” the Harry and Louise ad warned.

AHIP’s new proposal contains some reforms progressives could generally support. Sen. Ted Kennedy (D-MA) issued a statement praising AHIP’s plan:

There’s a spirit of optimism about our work to ensure quality, affordable health care for all Americans – and today’s announcement adds to that optimism. The insurance industry has advanced serious proposals that deserve serious analysis and consideration.

But today’s plan, like their 1992 proposal, is profit-conscious. As Carl Schramm, president of HIAA pointed out, the 1992 plan was “the only way you preserve the private health insurance industry. It’s plain-out enlightened self-interest.”

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