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Health Reform Compromise: Insurance Company-Style

An AP report today (I haven’t found it anywhere else yet) has yet another compromise from the Senate on a public option health plan. Here’s the idea – current nonprofit health plans (read NC Blue Cross Blue Shield and other similar nonprofit state plans) would be able to sell their health plans nationwide with a “government certification” of good quality. This would supposedly provide the competition we need to all those private plans in health care reform that have a lock on the market.

The problem with this latest move away from at least some limited role for a public plan in reform is that it would actually be much, much worse than no public plan at all. In fact, let me count the ways this is about the dumbest idea I’ve heard so far in the reform debate:

1. Supposedly “nonprofit” health plans are often just as bad in their actions, high executive salaries, and lack of commitment to lower health premiums as their for-profit counterparts. Look no farther than NC Blue Cross’s multi-million dollar executive salaries, millions spent deep-sixing health reform changes that might actually save money, and billions of dollars in reserves while they are raising rates 15-20% for many NC companies this year.

2. We tried this before and it didn’t work. Back in the 1930s and 1940s, instead of enacting national health reform we created nonprofit Blues plans in almost every state and, as they certainly were in North Carolina, gave them the “certification” of the state to help them get customers. I have a poster in my office of a former NC Governor proudly holding up the ten points of a health reform plan that includes a point entitled “more nonprofit blue cross health insurance.” We know how that turned out.

3. This is the dream of some of the most powerful insurers in the country, including our own NC Blue Cross. Can you imagine the cheering around the Blue Cross boardroom table in Chapel Hill today at this idea? Not only are insurers going to get thousands of new customers in their own state but now they can get those subsidized customers nationwide.

I can’t believe this is seriously being considered as an option instead of having a public plan that would actually compete with NC Blue Cross’s 96.8% individual market share here in NC.

15 Comments

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  2. Dean Supports Medicare Buy-In

    December 8, 2009 at 3:58 pm

    Howard Dean supports the Medicare buy-in for those of us 55+, it would be nice if it would be available early in 2010, so I can ditch my crappy $5000 deductible Blue Advantage/HSA plan.

  3. AdamL

    December 8, 2009 at 4:00 pm

    A Medicare buy-in is great. Allowing Blue Cross to go national is not so great.

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  5. Wellescent Health

    December 8, 2009 at 4:56 pm

    By the time the compromises are complete, the reforms will have been significantly watered down. This is very unfortunate and the only hope is that the changes open the door to further changes later on in some form of evolution.

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  7. Single Payer Action

    December 9, 2009 at 6:32 am

    are we going to be REQUIRED to buy Blue Cross ‘products’ with an individual mandate?

  8. The Progressive Pulse – The New Deal

    December 9, 2009 at 8:50 am

    [...] looks like the national non-profit plans that Adam Searing bashed yesterday will be included in the bill. If a non-profit national plan is not offered in a [...]

  9. Mike

    December 9, 2009 at 5:46 pm

    I would like to pose this question to any Senator worth their salt (assuming the senator is not a attorney). Why is TORT REFORM not a major component of this bill? Studies performed by http://www.BenefitsManager.net and http://www.DentalInsuranceUtah.net that liability insurance costs are approaching nearly one third of the operating expenses for specialty care physicians, units and facilities. Aside from medical provider costs, insurance carriers such as Humana Health Plans state that their costs of medical liability and defensive medicine accounts for nearly 10 cents out of every premium dollar collected (verified). Compare that to Humana’s reported pharmaceutical claims of 15 cents out of every premium dollar collected. Or better yet, 21 cents out of every premium dollar collected is paid back to physicians for physician treatments. Without TORT REFORM, medical provider costs will never drop.

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    December 12, 2009 at 4:25 am

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