Blue Cross commences health reform war
Blue Cross funding campaign against governor’s health reform
By Laura Kurtzman
The Mercury News
May 24, 2007
California’s largest health insurer has set aside $2 million for what is likely to be a deep-pocketed campaign to undermine the health care reforms being pushed by Democratic lawmakers and Gov. Arnold Schwarzenegger.
The first shot in that campaign came Thursday when Blue Cross ran a three-quarter-page ad in The Sacramento Bee warning that the proposed insurance reforms could have unintended consequences like the energy deregulation that ushered in California’s electricity crisis.
A doctors’ group, the California Medical Association, called the Blue Cross ad “an abomination” and accused Blue Cross of a cynical attempt to maintain high profits. Health Access, a union-backed group that advocates for the poor, said that if the health care debate is like energy deregulation, then Blue Cross is playing the role of Enron.
While it is still early in the health reform debate — the Democratic bills have just been finalized — the company’s action shows that some businesses are moving to protect their interests as the governor and the Legislature ponder sweeping reforms.
Blue Cross — which has 8.6 million California customers, far more than any other health insurer — is adamantly opposed to a variety of proposed insurance market reforms, especially a requirement that they sell policies to everyone, regardless of their medical history.
Blue Cross says the reforms, which are part of the governor’s and the Democrats’ plans, will drive up insurance premiums.
(Ann-Louise Kuhns, a vice president with Blue Cross of California) said the company supports greater health coverage, for example by expanding public programs, but not insurance market reforms that could hurt its business.
http://www.mercurynews.com/news/ci_5980474?nclick_check=1
Comment:
By Don McCanne, MD
Blue Cross of California, a subsidiary of WellPoint, has been one of the nation’s leading innovators in modifying insurance products to protect and expand their market by keeping premiums affordable.
Blue Cross has led the way in excluding from coverage individuals with potential health risks, in rescissions for those who do submit claims, in shifting more costs to patients through aggressive marketing of high-deductible plans, in marketing stripped-down coverage such as the TONIK plans for the young invincibles, and in marketing strategies that avoid high-cost employer-sponsored groups.
These have been very effective business strategies for Blue Cross, making it the largest insurer in California. But they have been terrible strategies that have compounded our health care crisis by preventing affordable health care access to precisely those individuals with greater health care needs. Their successful business strategies have taken us in exactly the opposite direction from the reform that we need. Worse, in order to compete, the other private insurers have adopted similar, highly perverse strategies to keep their premiums affordable.
What does that tell us? Blue Cross is right! If private insurers are required to provide the insurance function of pooling risk by including those who actually use health care services, then their premiums would be unaffordable for the majority of us. Either Blue Cross must abandon their current business plan and accept a program of massive government premium subsidies (in a new, much more rigid regulatory environment), or they must convince our policymakers that their model should prevail, which is possible only by shifting actual patients (i.e., individuals with health care needs) to government programs.
Blue Cross has chosen the latter strategy, recognizing that it will require all-out warfare. But this is a battle that we need not fight. Since the government is going to be paying for health care anyway, we no longer need Blue Cross and its wasteful, expensive administrative services that are limited to the healthy.
We should declare victory now and move on with establishing our own publicly-administered and publicly-funded universal health insurance program. For those who believe that we should consider a truce with them, keep in mind that it is our money and our health care. Why would we ever consider rewarding the enemies of reform?