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House Healthcare Bill: Government-Run Plan, Other Key Provisions Undermine Goals of Access and Affordability
Date:10/29/2009

WASHINGTON, Oct. 29 /PRNewswire-USNewswire/ -- The Blue Cross and Blue Shield Association (BCBSA) issued the following statement regarding today's announcement by the House leadership of healthcare reform legislation that would include a new government-run health plan:

The 39 independent Blue Cross and Blue Shield companies strongly support passing bipartisan comprehensive healthcare reform this year that will expand access to affordable coverage and rein in costs for everyone. We agree with the goal of the legislation to cover all Americans.

While we are still reviewing the legislation, we are very disappointed that many of the provisions in the "Affordable Health Care for America Act" unveiled today would undermine the very policy objectives we collectively hope to achieve. The proposed creation of a new government-run health plan -- which could be open to everyone through the new federal exchange beginning 2015 -- would jeopardize affordability and access to coverage for the 160 million people who receive their benefits through their employers today. The bill also would undermine affordability by allowing people to wait until they are sick to buy coverage, setting higher minimum benefit packages than people commonly purchase today, and placing an unfair burden on younger people by restricting age discounts.

Government-run health plan

A new government-run plan is unnecessary to achieve reform and would have devastating consequences. Millions of people would lose their current private coverage they are happy with. In addition, the government will underpay providers - even if negotiated rates are initially used - creating major access issues, including long waits for services with some providers closing their doors. It also would undermine delivery system reforms critical to improving quality and controlling costs.

A government-run plan will use its built-in advantages - no matter how it is initially structured - to take over the market. Although House leadership is now proposing to use "negotiated" rates to pay providers, the government does not negotiate. It would quickly resort to price-setting based on Medicare or use existing government programs as leverage for negotiations, creating similar effects.

The House bill would give the government-run plan many financial advantages right from the start, including an exemption from federal and state taxes and other assessments that private plans must pay, immunity from state lawsuits, as well as a host of other state rules and regulations. Moreover, the government plan would receive at least $2 billion in start-up capital.

Affordability

For healthcare reform to succeed, insurance premiums must be affordable. However, the House bill's proposed insurance reforms would allow people to wait to purchase coverage until they are sick, which will result in higher costs for everyone. Moreover, the bill requires minimum benefit levels that are higher than the average policy purchased in the market today, which will significantly increase costs for consumers.

We also are very concerned that the age-related discounts for the young proposed in this legislation are significantly lower than what exists in nearly all states today. This would unfairly burden the youngest and healthiest individuals, raising their premiums by an average of 69 percent, according to actuarial firm Oliver Wyman, Inc. Premium discounts for younger individuals are critical to encouraging them to buy coverage and provide cross subsidies essential to pay for the care of older individuals.

Federal exchange

The House bill would create a new federal agency to administer a national exchange that would be open to employers up to group size 100 within three years and could be expanded to everyone starting in 2015. While we agree that exchanges are needed to help individuals and small businesses shop, compare and enroll in coverage, the proposed federal exchange would result in a massive shift of authority to the federal government that would undermine existing state authority and create conflicting state and federal rules.

Blue Cross and Blue Shield companies continue to push for comprehensive and sustainable healthcare reform that expands coverage, reins in costs and assures affordable premiums for everyone. Unfortunately, the House bill does not achieve these goals. We want to continue to work with Members of Congress to enact a workable healthcare reform bill.

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 www.BCBS.com.

SOURCE Blue Cross and Blue Shield Association


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SOURCE Blue Cross and Blue Shield Association
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