Blue Shield of California used to sell policies to individuals in every county in the state, according to the Department of Managed Health Care, one of Californias two teams of health insurance regulators. But by 2014s open enrollment period, Blue Shield had pulled out of 250 zip codes throughout the state, including four entire counties: Alpine, Monterey, Sutter, and Yuba.
The gaps are particularly felt in the top third of the state, where thousands of residents now have only one choice of insurer if they want to buy a health plan on the exchange.
Blue Shield of California declined an interview with NPR. But in a written statement, the company reported that its not selling in certain areas of California because it could not find enough health providers willing to accept a level of payment that would keep premiums low. According to the statement, the company also is not selling in areas where there is no contracted hospital within 15 miles.
Comment by Don McCanne of PNHP: Blue Shield of California has pulled out of 250 California zip codes in the Covered California program (Californias insurance exchange under the Affordable Care Act), citing inability to negotiate low prices with the local health care providers.
Nonprofit Blue Shield of California and for-profit Anthem Blue Cross were the only Covered California insurers in many zip codes in the state. It is ironic that the for-profit Blues plan - Anthem Blue Cross - has continued to serve areas where coverage is more difficult, whereas the nonprofit Blues plan - Blue Shield - has pulled out. So much for the theory that nonprofit Blues plans are public service models while for-profit Blues are primarily profit-making business models. They have become the same animal, with the for-profits leading the way.
Blue Shield blames regulatory guidelines requiring that patients have access to care. By refusing to contract with the local providers, patients would have been required to travel long distances for care - a violation of the Affordable Care Act.
Some might blame Blue Shield for demanding rates that were too low to adequately cover costs, whereas others might blame the providers for demanding rates that provided excessive profits, but the primary blame does not lie with either party. It is the model that uses private insurers as financial intermediaries that is defective and should be blamed.
Contrast that with Medicare, which is a public insurer that administers the rates to be paid. Medicare is not setting rates to ensure that the government is profiting off of the program. Rather it is setting rates to be sure that the health care delivery system is adequately funded so that it will be there when patients need it.
It is true that Medicare rates are not always optimal, but that is because it is only one payer in a dysfunctional, multi-payer system which makes rate setting much more difficult. If Medicare were the only payer for the entire nation, it could set rates with much greater precision, paying legitimate costs and fair margins.
Although the Blues had their day as health insurers serving in the public interest, those days are long gone. It is time for a single payer, improved Medicare for all.
As the new Congress convenes and the Supreme Court prepares to hear arguments in the King v. Burwell case challenging tax subsidies for insurance purchased through the federally facilitated marketplaces, proposals to repeal and replace the Affordable Care Act (ACA) are resurfacing. Many of these rely on high-risk health insurance pools to cover people with preexisting health conditions.
In fact, the risk pools are suggested as a viable alternative to the ACA's ban on preexisting condition exclusions in the individual market and the marketplaces. My recent analysis of high-risk pools, however, explains why these entities simply are not a realistic alternative to coverage requirements under the ACA. In a nutshell, high-risk pools:
1. are prohibitively expensive to administer,
2. are prohibitively expensive for consumers to purchase, and
3. offer much less than optimal coverage, often with annual and lifetime limits, coverage gaps, and very high premiums and deductibles.
Comment by Don McCanne of PNHP: Those who wish to repeal or at least drastically reduce the provisions of the Affordable Care Act realize that they must come up with a replacement.
Most of the proposals would grant much greater flexibility to insurance products while reducing regulatory oversight. The problem that creates is that individuals with high medical expenses tend to be shut out of the insurance market. To ensure coverage for these individuals, high-risk insurance pools have been proposed.
This article and the brief that it is based on explain why high-risk pools are not a satisfactory solution. The premiums are unaffordable, and the pared-down benefits are unsatisfactory. These over-priced plans do not provide the financial protection that patients with chronic disorders need.
Even with the Affordable Care Act, enrollment in the temporary high-risk pools had to be closed early because they proved to be too expensive, threatening depletion of the allotted funds. They provide poor coverage at a very high cost.
With a single payer system this problem disappears. Funding is based on ability to pay, through the tax system, and not on the basis of anticipated medical expenses. Everyone receives the care they need, regardless of their health status. The fragmented plans supported by the repeal and replace people cannot do that.
By Don McCanne, PNHP
This week the Forum Club of Sun City Palm Desert (a California retirement community) held a forum on single payer health care. Forum Club Secretary Mike Wedekind, a Canadian, spoke on Canadas single payer system, and I spoke on the problems with the U.S. system that would be amenable to enactment of a single payer system.
Since it was an after-dinner meeting, I expected the usual laid-back audience with a few partaking of postprandial snoozes. On the contrary, we received great feedback from the attendees. Many attending were snowbirds - relatively affluent and generally politically conservative Canadians who maintain a winter residence in this desert community.
After we each spoke for twenty minutes, the attendees met at round tables to discuss various aspects of U.S. and Canadian health policies. Then a moderator from each table presented their quite astute observations.
I spoke individually with several of the attendees. Even though the Forum Club is explicitly non-partisan, I received no negative comments about a single payer system for the United States. In fact, the reason that I decided to write this commentary was the response of the Canadians. Though most seemed to be politically conservative, there was absolutely no indication that they thought that somehow their single payer system was deficient, especially compared to ours, except for a problem with queues for some elective services such as joint replacement. There was no mention of the need to privatize health care since they already have a private health care delivery system. They certainly see no need for intrusive, wasteful private insurers, other than to provide supplementary benefits outside of their Medicare.
It made me wish that it was as easy to converse on this topic with conservatives here in the United States. A poll last month revealed that 23 percent of Republicans already support an expanded, universal form of Medicare (as do 79 percent of Democrats and 45 percent of Independents).
Everyone should give some thought as to what the message might be that resonates with the Independents and Republicans who are supportive, but, above all, what is it that causes Canadians across the political spectrum to be so supportive of their Medicare? We have to deliver that message here in the United States.
Email from Medicare advocates--
This week, the White House released the Presidents proposed fiscal year (FY) 2016 budget. Similar to years past, there are proposals that the Center endorses and proposals that cause us concern.
On the positive side, proposals we support include several that would yield savings on prescription drugs, including a new proposal that would give the Secretary of Health and Human Services (HHS) the authority to negotiate drug prices for biologics and high cost drugs in the Part D prescription drug program. The budget would also close the Part D Donut Hole three years earlier (by 2017) than is currently planned under the Affordable Care Act. In another new proposal, the current 190-day lifetime limit on inpatient psychiatric hospital days would be eliminated, reducing a long-time barrier to true mental health parity in the Medicare program.
Among the proposals we oppose are many provisions that would shift additional costs to Medicare beneficiaries, including adding a copayment for certain home health visits, increasing the Part B deductible, further income-relating (means testing) Part B and D premiums, and adding a surcharge to Medicare supplemental (Medigap) policies that offer cover all or most out-of-pocket expenses. We are also concerned about proposed changes to the Medicare administrative appeals process.
For more analysis by the Center, see http://www.medicareadvocacy.org/the-presidents-proposed-fy-2016-budget-the-impact-on-medicare/.
On February 3rd, the Kaiser Family Foundation published a summary of the Medicare-related provisions in the Presidents budget, available at http://kff.org/medicare/issue-brief/summary-of-medicare-provisions-in-the-presidents-budget-for-fiscal-year-2016/.
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About eridaniMajor policy wonk interests: health care, Social Security/Medicare/Medicaid, election integrity
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