Health Insurance Blog

Blue Cross Blue Shield of North Carolina (BCBSNC), has broken rank with the health insurance industry and will air TV ads which attack Barack Obama’s proposed health care plan.

In recent times the health insurance industry, led by the AHIP, has made some consessions to the government such as agreeing to keep health insurance premiums in check and accepting all customers regardless of medical conditions.  The concessions were not completely altruisitc as they were designed to fend off the governments desire to create a government health plan which would compete with the private health plans in each market.

In three 30-second videos, sponsored by BCBSNC, the North Carolina health insurance company paints a picture of a future system in which patients wait months for appointments and can’t choose their own doctors.  Storyboards of the BCBSNC videos were obtained by the Washington Post.

A recent report prepared by PriceWaterHouseCoopers and released by AHIP breaks down how each dollar that is spent by Americans on health insurance is broken down.

According to the report:

• $0.33 is spent on physicians services
• $0.20 is spent on inpatient costs
• $0.15 is spent on outpatient costs
• $0.14 is spent on drugs
• $0.05 is spent on other medical services
• $0.06 is spent on government payments, compliance & other administrative expenses
• $0.04 is spent on consumer services, provider support & marketing
• $0.03 health insurance company profits

The Complete report can be found here http://www.americanhealthsolution.org/assets/Uploads/risinghealthcarecostsfactors2008.pdf

Several leading consituents in the health care industry have offered to do their part to keep health care costs in check by offering to create $2 trillion in savings over the next 10 years by keeping projected rate increases in check over time.

The health care groups participating in this agreement include:  Hospitals, health insurance companies, drug companies, and doctors (listed below).  They plan to achieve the proposed savings will stem from realizing efficiencies in the health care system that will trim health care costs by 1.5% per year.

An important facet of this move by health care leaders is that President Obama picks up key allies that were major roadblocks to Bill Clinton’s atempt to overhaul the ailing health care system.

Health Care Industry Participants:  American Medical Association, The Pharmaceuticals Research and Manufacturers of America, America’s Health Insurance Plans, Service Employees International Union, American Hospital Association, Advance Medical Technology Association.

Timothy P. Carney, a columnist with the Washington Examiner, recently penned an article about the pending health care reform proposals that are being debated.  Mr. Carney’s speculation is that the health insurance companies will win at the end of the day and their proposal will be accepted by Obama and his administration.

The health insurers plight has been championed by America’s Health Insurance Plans (AHIP), a trade group that has been more than $4 Million over the past 6 months lobbying for their cause.

The key points in AHIPs proposal include:

1. Health insurers must cover everybody who is willing to purchase health insurance coverage, regardless of pre-existing or other health conditions
2. Health insurers would agree to charge customers the same monthly premium regardless of age or health status
3. Health insurance would be compulsory - All Americans would be required to purchase and maintain health insurance coverage, whether via an employer group, Association, or an individual health insurance plan.
4. The Government would subsidize people’s health insurance premiums

Obama’s plan no longer calls for a “single-payer” environment, but rather a marketplace where the federal Government would compete with private health insurance companies for membership.

The heavy lobbying and campaign contributions put forth by health insurers make them very influential and in the end might help them get their way in this important health care reform debate.

Blue Cross Blue Shield, and AHIP, issued a joint statement opposing President Obama’s proposal to create a government run health plan.  They believe that the creation of a government run health plan would be detrimental to a overhaul of our ailing health system.

In their statement sent to key senators, AHIP and the Blue Cross Blue Shield Association (BCBSA) said that any such program “would thwart the ability of the healthcare sector to implement meaningful delivery system reforms, exacerbate the cost-shift from public programs to consumers and employers in the private market, and destabilize the employer-based system.” The two groups said that more than 100 million Americans would leave their existing private health insurance plan for the proposed federally subsidized health plan.

Both AHIP and BCBSA said they would guarantee health insurance coverage to all families and individuals, including those with pre-existing medical conditions, but only if there is a federal mandate that requires Americans to obtain and hold health insurance coverage. Even so, “rating flexibility based on age, geography, family size and benefit design would be needed to maintain affordability.”

This is a interesting development in the ongoing debate about how to fix the broken health care system in the United States.  This proposal seems like it would make sense for health insurance shoppers if the rates would indeed be affordable.  My gut feeling says that  if health insurance companies are required to cover unhealthy individuals at the same rates as healthy individuals, the healthy people will bear the financial brunt of this compromise.