Pennsylvania's Blues avoid battle

Highmark sues to block state review of Blues competition

By Emily Berry
American Medical News
April 5, 2010

Highmark Inc. has asked a state court to block the Pennsylvania Dept. of Insurance from investigating or releasing any findings about the state of competition between the state's four BlueCross BlueShield-affiliated plans.

In a lawsuit filed March 16, the Pittsburgh-based company accused Pennsylvania Insurance Commissioner Joel Ario of planning to try to break up the Blues plans' current licensing arrangement, set by the BlueCross BlueShield Assn.

The state's four Blues plans split their business into distinct territories. The only overlap is in central Pennsylvania, where Highmark, which has a Blue Shield trademark, and Capital BlueCross compete.

Pennsylvania Gov. Ed Rendell criticized Highmark's decision to block the state's review. "I am disappointed -- but not surprised -- that Highmark has chosen to fight our efforts to ensure the protection of consumers and guarantee a free and fair marketplace," he said in a statement. "Health insurance is a big business. Historically, it has operated -- and especially here in Pennsylvania -- with limited regulation and weak oversight."


By Don McCanne, MD

Pennsylvania's four BlueCross BlueShield plans have staked out different territories, effectively eliminating market competition between the Blues. One of the reasons that the reform model was based on private health plans was that market competition was supposed to bring us higher quality insurance products at lower costs. Instead, Pennsylvania is getting higher costs at whatever quality.

What is in the recently-enacted health reform legislation that will prevent such anti-competitive practices? The state health exchanges? This is an industry that is suing to block the release of any information about anti-competitive behavior. Just because they've been granted a new marketing tool in the form of the exchanges doesn't mean that they are going to change their ways. The major markets are already concentrated amongst a few insurers, and they will continue to remain so.

Since we have lost the benefit of competition, why should we spend so much more merely to keep the private insurers in control? Let's recover the resources that they waste and use the funds for a truly universal program that actually does cover all of us. That will require new, preemptive legislation, but it's just what we need - an improved Medicare for everyone.