Health insurance industry supports change

Dwindling customer base brings push for mandatory health coverage for allBy Lisa Girion • LOS ANGELES TIMES • June 8, 2009 Some people may find it hard to believe that the U.S. health insurance industry supports making major changes to the nation's health-care system. The industry, after all, scuttled President Bill Clinton's health-care overhaul bid with ads featuring "Harry and Louise" fretting about change. But this time, it turns out, the health insurance industry has good reason to support at least some change: It needs it. Private health insurance faces a bleak future if the proposal they champion most vigorously — a requirement that everyone buy medical coverage — is not adopted. The customer base for private insurance has slipped since 2000, when soaring premiums began driving people out. The recession has accelerated the problem. But even after the economy recovers, the downward spiral is expected to continue for years as baby boomers become eligible for Medicare — and stop buying private insurance. Insurers do not embrace all of the health-care restructuring proposals. But they are fighting hard for a purchase requirement, sweetened with taxpayer-funded subsidies for customers who can't afford to buy it on their own and enforced with fines. Such a so-called individual mandate amounts to a huge booster shot for health insurers. "They really could be licking their chops over the potential here," said Jane DuBose, an analyst with HealthLeaders-InterStudy, which tracks the industry. Public frustration cited The industry says its interest in change flows not from narrow self-interest but from broader concerns. "What's driving this is we have 47 million people who don't have access to the system, who get help through emergency rooms, and that results in higher costs and inefficient care," said Robert Zirkelbach, a spokesman for the industry trade group America's Health Insurance Plans. "Public frustration with many of the problems in the system (is) increasing pretty significantly," said Jay Gellert, chief executive of Woodland Hills, Calif.-based Health Net. He added that other industries, such as auto and financial services, "haven't dealt with issues early enough." Still, industry observers say, private insurers need the government's help in transforming some of the nation's millions of uninsured residents into paying customers.