House Healthcare Bill: Government-Run Plan, Other Key Provisions Undermine Goals of Access and Affordability

House Healthcare Bill: Government-Run Plan, Other Key Provisions Undermine
Goals of Access and Affordability

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

Jeff Smokler of the Blue Cross and Blue Shield Association, +1-202-957-7825,
jeff.smokler@bcbsa.com