Health Insurers Try to Scuttle Obama Plan

May 6, 2009 -- In an effort to scuttle a major part of President Obama's plan to reform the nation's health-care system, private health insurers are taking the unusual step of asking Congress to increase regulation of their industry.

"We are not asking people to trust us," Karen Ignagni, the president of America's Health Insurance Plans, told a key congressional panel on Tuesday. "We are asking people to trust government."

The insurance industry's surprising request for more government rules and oversight is its latest attempt to convince Congress to reject a main component of Obama's health care reform plan -- a government run insurance program that would be open to all Americans under 65 and compete with private insurance plans.

The insurance industry's plea to the Senate Finance Committee came just one day before Sens. Max Baucus, D-Mont., and Chuck Grassley, R-Iowa, the panel's Democratic chairman and top Republican, were scheduled to have lunch with Obama in the president's private dining room.

To persuade members of Congress not to create the government insurance option, insurers are offering to accept a series of new consumer protections that they contend would achieve universal coverage.

The insurance industry's latest olive branch was a Tuesday offer to Sen. John Kerry, D-Mass., to end the practice of charging women more than men for the same health-care coverage. In the past, insurers have defended the practice by saying, in part, that women tend to use more health care than men during their childbearing years.

Other concessions from the insurance industry include a November offer to stop denying coverage to sick people, and a March offer to end the practice of charging higher premiums to those with a history of health problems.

"I know you guys are skeptical, I read it on your faces," Ignagni told reporters following the hearing. "This is truly what it is: It is a transparent call for a full-scale renovation and a complete overhaul of the existing regulatory mechanisms."

Republicans and at least three of the 13 Democrats on the committee -- Delaware Sen. Tom Carper, Oregon Sen. Ron Wyden, and Arkansas Sen. Blanche Lincoln -- seemed receptive, or at least open, to the insurance industry's argument that the U.S. should not create a public plan to compete with private insurers.