Health Insurance Blog

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.

The UnitedHealth Group is now offering UnitedHealth Continuity, a policy for those that already have health insurance but are worried that they may lose it in the future. These people may be considering early retirement, or may fear unemployment and the resulting loss of health care coverage. Reed Abelson says in the New York Times that applicants must pass a medical review before being accepted. However, many individuals who have been unable to get insurance on their own are those with pre-existing conditions. The Continuity plan doesn’t seem to be helpful for them.

The UnitedHealth Continuity policy charges members 20% of the current health insurance premium to reserve the right to future coverage, and varies due to age, gender, location, and level of coverage selected. The monthly fee is also subject to increase in the future. There is also the danger of the plan becoming a costly high-risk pool that attracts people more likely to develop serious conditions.

Reed also speculates that proposed health care reforms from the incoming Obama administration include a requirement that private insurers offer individual health coverage to everyone, no matter the state of their health. That type of law would make the new UnitedHealth guarantee unnecessary. The president of UnitedHealth’s individual insurance unit, Richard A. Collins, claims that political wrangling and legislative delays make the Continuity plan viable, at least in the short term.

UnitedHealth Continuity is currently available in 25 states in which UnitedHealth already sells individual insurance. It believes that it will soon be able to offer the Continuity plan in 15 more states.

(Photo credit: Shahram Sharif under CC 2.0)