Reform Is No Cure for Insurer Discrimination, Health Experts Say

Sens. Charles Schumer with Max Baucus prepare the mark up of the Senate Finance Committee's version of health care reform, which calls for mechanisms to dissuade insurers from limiting coverage based on prior conditions. (By Melina Mara -- The Washington Post)
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America's Health Insurance Plans, a lobbying group for health insurers, has endorsed the idea of guaranteeing individuals access to coverage regardless of their medical history -- if that guarantee is part of a larger plan to help the uninsured pay for coverage and bring everyone into the insurance market.

At a more nuts-and-bolts level, AHIP has been trying to shape the legislation in ways that could help insurers attract the healthy and avoid the sick, though it has given other reasons for advancing those positions. In a recent letter to Baucus, AHIP President Karen Ignagni said benefit packages "should give consumers flexible options to meet diverse needs."

There are myriad ways health plans can attract healthier members, from the messages they advertise to the overall level of coverage they provide and the smallest enticements they add to their benefits packages.

Anthem Blue Cross markets a line of insurance called Tonik that is explicitly aimed at young adults. "You're young. You're healthy. You're in shape," the Tonik Web site says, addressing its target market. Tonik policies bear such names as "Part-Time Daredevil" and "Thrill-Seeker." The latter is for people who "live life on the edge, and happily go over it," says the Web site, whose graphics and color scheme bring to mind an ad for the Apple iPod.

At the other end of the age spectrum, ads for private health plans serving senior citizens on Medicare seldom feature people who are sick, said Tricia Neuman, who has studied the ads for the Kaiser Family Foundation. Many of the plans have offered benefits such as health club memberships, help buying eyeglasses, and preventive dental care, which may be more likely to sway healthy seniors than seniors who have severe and complex medical needs.

Some private Medicare plans have offered relatively inexpensive enticements while requiring members to pay more out of pocket than they would under conventional Medicare for major expenses, said the Medicare Rights Center's Precht. In 2008, a quarter of the private Medicare plans charged members more out of pocket for Part B medications, which include chemotherapy drugs for cancer patients, according to a March study for the AARP Public Policy Institute.

The government has been cracking down on those practices. As a Medicare official put it in a March 2008 letter to health insurers, charging beneficiaries more out of pocket than conventional Medicare for Part B drugs, dialysis and time spent in skilled nursing facilities "may be considered discriminatory."

In response to questions about the risk of continued cherry-picking under his legislation, Baucus provided a statement that "the difference in the market will be like night and day" compared with today's "wild West." But he also offered a qualification.

"These regulations are the first step to a market where consumers can be confident in the coverage they purchase," he said.