U.S. health insurers seek individual coverage mandate

* Insurers want coverage mandate for Americans

* Insurers could then guarantee coverage

* Study shows premiums rising faster than incomes

WASHINGTON (Reuters) - All Americans should be required to obtain health insurance as part of a sweeping overhaul that President Barack Obama says is needed to expand coverage and reduce soaring costs, insurance industry representatives told Congress on Tuesday.

If insurers are required to end the practice of excluding coverage for pre-existing medical conditions, then such a mandate will be necessary to keep insurance premiums affordable, Karen Ignagni, who heads the America’s Health Insurance Plans, told a Senate panel.

“Clearly the market today doesn’t work because we don’t have everyone in,” Ignagni told the Senate Health, Education, Labor and Pensions committee.

Insurers are worried that without the individual mandate, people would wait until they become sick to obtain insurance.

The requirement that health insurers enroll all who seek coverage regardless of their medical history is likely to be part of the healthcare overhaul legislation being drafted in the Democratic-led Congress. It is less clear whether a mandate for individuals to obtain insurance also will be part of the plan or how such a mandate would be enforced.

A number of lawmakers from both parties do not like the idea of imposing an insurance mandate on people who may or may not be able to afford it. During his presidential campaign last year, Obama argued against an insurance mandate, while his rival for the Democratic nomination, Hillary Clinton, backed the idea.


About 200 million Americans have private health insurance, including about 170 million with insurance provided through their employers. An estimated 46 million Americans are without any health insurance.

A study released by the Robert Wood Johnson Foundation on Tuesday showed that since 1994, when Congress unsuccessfully tried to overhaul the U.S. healthcare system, the costs of purchasing individual health insurance have risen nearly eight times faster than average U.S. incomes.

Obama wants Congress to enact by the end of this year legislation revamping the $2.5 trillion U.S. healthcare industry to expand coverage and control soaring costs that have put many U.S. companies that provide health benefits to workers at a competitive disadvantage.

“An enforceable individual coverage requirement, combined with subsidies and other changes to make coverage affordable, is the best way to ensure that all Americans have continuous access to insurance coverage and high-quality care,” Aetna Inc Chairman and Chief Executive Ronald Williams told the committee.

Len Nichols of the New America Foundation, a nonpartisan think tank, agreed that the overhaul should include an individual mandate. He also said a government plan should be among the insurance options available to people.

A government option is a central issue in the overhaul debate and Republicans and Democrats are sharply divided over it.

The insurance industry opposes a government plan, saying it would put the private industry at a competitive disadvantage. But many health reform advocates say a public plan is needed to promote competition in the insurance industry.

“The market is broken now, it is not working, and the consequence of that is a lot of people have lost their trust” in private insurance, Nichols told the panel. He said a public plan offering could be designed in a way so that it does not undermine private insurance and competes with it on an even playing field.

Editing by Mohammad Zargham