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Federal Government Premium Review Ignores Real Factors Driving Healthcare Costs

Strong delivery system and carefully crafted insurance reforms critical to achieving affordability

WASHINGTON, Feb. 22 /PRNewswire-USNewswire/ -- The Blue Cross and Blue Shield Association (BCBSA) issued the following statement regarding President Obama's healthcare reform proposal:

"Reining in healthcare costs, along with improving quality and expanding coverage to everyone, is a goal that the Blue Cross and Blue Shield Association (BCBSA) shares with the Obama administration and the Congress.  We agree escalating premiums continue to burden everyone.  That's why we have consistently advocated for healthcare legislation that makes important insurance and delivery system reforms to make insurance affordable without jeopardizing the coverage that people enjoy today.

President Obama's proposal to establish a new Health Insurance Rate Authority ignores the unique cost drivers in each of the 50 state insurance markets.  Several governors from both parties have recently expressed reservations about a one-size-fits-all approach to healthcare reform.

This new agency, which creates a highly politicized federal review process, would divorce premium review from the state regulators' responsibility of assuring that health plans have enough funds to pay future policyholder claims, potentially leading to multi-plan insolvencies across the country.  The risks of such a proposal – namely undermining the security and stability of Americans' health insurance – must not be ignored.

Any reform proposal needs to address the underlying drivers of healthcare costs:

  • Higher prices resulting from cost-shifting by healthcare providers to the private sector because of government programs underpayments; higher priced technologies and pharmaceuticals; and reduced provider competition;
  • Increased utilization attributable to an aging population, rise in obesity and chronic illnesses, new treatments, more intensive diagnostic testing, and the practice of defensive medicine; and
  • Lack of care coordination and a delivery system that rewards volume rather than quality.

We are troubled that several provisions in the president's proposal would make coverage even more expensive.  These provisions include putting new taxes on people's insurance, requiring many people to buy richer benefit packages than they do today, and allowing millions of people to forgo coverage until they are sick – driving up costs for everyone.

We have long supported many insurance reforms included in this proposal, like guaranteeing coverage regardless of pre-existing conditions, and to not vary premiums based on health status.  This only works if these reforms are coupled with an effective requirement for everyone to obtain and maintain coverage.

As new details of the president's proposal emerge, Blue Cross and Blue Shield companies will remain committed to bipartisan solutions to achieve a sustainable healthcare system."

The Blue Cross and Blue Shield Association is a national federation of 39 independent, community-based and locally operated Blue Cross and Blue Shield companies that collectively provide healthcare coverage for more than 100 million members – one-in-three Americans.  For more information on the Blue Cross and Blue Shield Association and its member companies, please visit

SOURCE Blue Cross and Blue Shield Association

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SOURCE Blue Cross and Blue Shield Association
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