During yesterday’s hearing before the Senate Finance Committee, America’s Health Insurance Plans President and CEO Karen Ignagni attempted to discourage Democrats from enacting a new public health care plan by reiterating the industry’s support for guaranteed issue — offering coverage to every applicant — and modified community rating — charging everyone the same premiums — (so long as both regulations are paired with an individual requirement to buy insurance).

Press coverage of the event centered around the insurance industry’s so-called “concessions”:

- AHIP Pleads Its Case: Regulate Us: “In a rare sight on Capitol Hill for any industry, health insurers practically begged senators Tuesday to regulate their livelihood rather than subject them to the fierce, and potentially lethal, competition that would ensue if lawmakers unleash a government-run public insurance option on them.” [National Journal, 5/06/2009]

- Insurers Offer Concession On Premiums: “Health insurers have offered to submit to a series of restrictions they contend would add up to a fairer marketplace and cut into the ranks of the 50 million uninsured.” [Boston Globe, 5/06/2009]

- Health Insurers Agree to End Higher Premiums for Women: “It was the latest concession by insurers as Congress drafts legislation to overhaul the $2.5 trillion health care industry.” [NY Times, 5/06/2009]

The industry had offered similar concessions in December 1992, before launching an all-out attack on President Clinton’s health care reform efforts. Of course, that’s not to say that insurers will adopt a similar strategy this time around. Ignagni and her team may run issue ads against certain provisions but are unlikely to oppose the entire effort.

Still, before we credit the industry for cooperating with progressive reformers, we should consider Ignagni’s proposal. The industry envisions a reformed marketplace in which everyone is required to purchase coverage. In return, insurers would no longer deny coverage to Americans with pre-existing conditions or charge sicker Americans higher premiums than healthier Americans. Women would not pay more than men and insurers would invest more in preventive care and care coordination.

But as Howard Dean pointed out in an interview with ThinkProgress, “if we only get community rating and guaranteed issue that’s great insurance reform, but that is not health care reform and nobody should mistake it.” Indeed, reforming the insurance industry is all about restoring competition. Already, “1 in 6 metropolitan areas in a 2008 study of more than 300 U.S. markets is dominated by a single health insurer that controls at least 70% of consumers enrolled in health maintenance organizations or preferred provider organizations.”

Such consolidation negates any real competition, preventing insurers from having to negotiate prices and lower premiums. In fact, while “there have been over 400 health care mergers in the last 10 years,” premiums have risen “nearly eight times faster than average U.S. incomes.” Insurers fear a public plan because it has the potential to work all too well, force private plans to lower prices and cause some enrollees to shift to public coverage. And it’s this fear that’s drawing insurers to the reform table.

A new public plan, after all, would complement the private market and offer Americans a real choice of coverage. It would also help pioneer new payment and quality-improvement methods that could set the standard for private plans and use its lower administrative costs and bargaining power to better control health care costs.

Ignangi points to the Federal Employees Health Benefits exchange — which does not include a public health option — as an example of a successfully regulated health care market. But as Jacob Hacker argues, “FEHBP’s annual growth rate of per enrollee spending averaged 7.3 percent from 1985 to 2002 (the most recent currently available data year) compared with 5.8 percent for Medicare. Indeed, the growth rate for FEHBP is virtually identical to that for private health insurance over this period.”

The industry’s so-called “concessions” are designed to protect their monopoly over the health insurance market, not lowering health care costs or offering Americans better quality care.

GOP wordsmith Frank Luntz has authored a new messaging memo defining the Republican rhetoric on health care reform (READ FULL MEMO HERE). The memo is titled “The Language of Health Care 2009″ and it lays out the argument for “stopping the Washington takeover” of health care.” But if fully implemented it may very well stop health care reform:

This document is based on polling results and Instant Response dial sessions conducted in April 2009. It captures not just what Americans want to see but exactly what they want to hear. The Words That Work boxes that follow are already being used by a few Congressional and Senatorial Republicans. From today forward, they should be used by everyone.

Luntz warns that “if the dynamic becomes ‘President Obama is on the side of reform and Republicans are against it,’ then the battle is lost and every word in this document is useless.’” The trouble is, it already is useless. Because rather than challenging the tenets of American reform proposals, Luntz establishes a straw man argument against a non-existent health plan.

Buried amongst the usual rhetoric about government-run health care is Luntz’s predictable contradiction: he instructs Republicans to “be vocally and passionately on the side of REFORM” but then urges GOP lawmakers to misrepresent and obstruct any real chance of passing comprehensive legislation.

“Humanize your approach,” but argue that health care reform “will result in delayed and potentially even denied treatment, procedures and/or medications.” “Acknowledge the crisis” but ask your constituents “would you rather… ‘pay the costs you pay today for the quality of care you currently receive,’ OR ‘Pay less for your care, but potentially have to wait weeks for tests and months for treatments you need.”

In other words, say there is a crisis but then argue that health care reform would lead to “the government setting standards of care,” government “rationing care,” and would “put the Washington bureaucrats in charge of health care.” “This plays into more favorable Republican territory by protecting individual care while downplays the need for a comprehensive national plan,” the memo states.

Readers are also instructed to conflate Obama’s fairly moderate hybrid approach to reform (i.e. building on the current private/public system of delivering health care) with “denial horror stories from Canada & Co.”

Focus on timeliness — “the plan put forward by the Democrats will deny people treatments they need and make them wait to get the treatments they are allowed to receive” — and argue that Republicans will provide “in a word, more: ‘more access to more treatments and more doctors…with less interference from insurance companies and Washington politicians and special interests.’”

But that’s the major problem with Luntz’s memo: it tries to obstruct health reform by ignoring what Obama is actually offering. Instead, Luntz is attacking an easy extreme — what he wishes the Democrats were proposing — and pretending that the Republicans actually have some kind of health care solution (the memo instructs Republicans to focus on targeting waste, fraud and abuse).

So it’s up to the administration to define health care reform as a way to lower health care costs through competition, expand coverage to all Americans and give everyone a choice of health care providers and health insurers. If the Democrats do this successfully, then Republicans will look like the bureaucratic obstructionists that they warn the public about.

READ FULL MEMO HERE