WASHINGTON — The health insurance industry offered Tuesday for the first time to curb its controversial practice of charging higher premiums to people with a history of medical problems.
The offer from America’s Health Insurance Plans and the Blue Cross and Blue Shield Association is a potentially significant shift in the debate over reforming the nation’s health care system to rein in costs and cover an estimated 48 million uninsured people. It was contained in a letter to key senators.
In the letter, the two insurance industry groups said their members are willing to “phase out the practice of varying premiums based on health status in the individual market” if all Americans are required to get coverage, although the letter left open some loopholes.
Insurance companies now charge very high premiums to people who are trying to purchase coverage as individuals and have a history of medical problems, such as diabetes or skin cancer. Even if such a person is offered coverage, that individual is often unable to afford the high premiums. About 7 percent of Americans buy their coverage as individuals while more than 60 percent have job-based insurance.
The companies left themselves several outs, however. The letter said they would still charge different premiums based on such factors as age, place of residence, family size and benefits package.
“If the goal is to make health care affordable, this concession does not go far enough,” said Richard Kirsch, campaign manager for Health Care for America Now. “It still allows insurers to charge much more if you are old.” His group, backed by unions and liberals, is trying to build support for sweeping health care changes.
Importantly, insurers did not extend to small businesses their offer to stop charging the sick higher premiums. Small employers who offer coverage can see their premiums zoom up from one year to the next, even if just one worker or family member gets seriously ill.
Karen Ignagni, president of America’s Health Insurance Plans, the leading trade group, said the industry is working on separate proposals for that problem.
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