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Health Reform Compromise: Insurance Company-Style

Posted By Adam Searing On December 8, 2009 @ 2:20 pm In Uncategorized | Comments Disabled

An AP report [1] 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.


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[1] report: http://www.wral.com/business/story/6570359/

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