AHIP opposes creation of government health plan to rival private insurers

According to a new Wall Street Journal poll, 38.7 percent of respondents believe that Congress should create a government-run health plan to compete with private insurers, while 52.9 percent said "no way" and the remaining 8.4 percent are undecided. America's Health Insurance Plans and the Blue Cross Blue Shield Association are locking horns with the Obama administration, members of Congress and consumer advocates over the proposed establishment of a government backed insurance coverage that could directly compete with established private insurance plans.

President Obama has introduced a possible strategy that would offer Americans a federally backed Medicare-like plan as an option to commercial plans, reports the New York Times. Sen. Max Baucus (D-MT), among many others in Congress, supports the now loosely defined government alternative. Supporters, in principle, say that the introduction of a government-sponsored plan would, at the very least, put private insurers on notice and impose more discipline on them, forcing them to offer competitive pricing and to make other concessions. Arguably, the debate has already forced the hand of private insurers who have agreed to change pricing and eligibility for patients with pre-existing conditions.

The American Medical Association is worried that price competition will lower reimbursement rates even further. "Advocates for a public plan need to be put a concrete proposal on the table so that we can evaluate the details," the AMA said in a statement. "We have a long history of public programs that are not adequately funded, resulting in cuts to those who provide health care."

AHIP CEO, Karen Ignagni argues that "there's no way to run a side-by-side comparison within the current structure." She in effect has said "bring it on" by inviting the Obama administration and other backers of a government plan to " have a debate on a government-run system."

To learn more:
- read the WSJ article [1]
- check out the blog [2]
- here's the New York Times story [3]