Jun ‘11
6
Health Reform Is Too Important To Be Left To Insurance Agents
When the Congress passed the historic health policy reform law in March 2010, a centerpiece was new rules for the private insurance industry. The best argument against moving to a single payer system in this country has been the ability of some health insurance plans, working with health care providers, to improve care quality, efficiency, utilization, costs and satisfaction. Most traditional Blue Cross and Blue Shield plans have demonstrated how to use data to drive value. In a few states, North Dakota for sure, BCBS was given a near monopoly in exchange for its demonstrated ability to engage providers in improving care quality and provider satisfaction, and reducing utilization and per-member-per-month costs. Experiments with HMOs in other states demonstrated the same thing, especially with the Medicare population in the first demos of “premium support” in the 1980s.
The new law benefits from this experience and sets us on the path to reforming the rules by which a insurance companies will play. Included, of necessity, is a requirement that favors large group coverage, risk assumption, and efforts to resource medical systems’ efforts to reduce costs and improve quality. To make the new insurance markets competitive, the “medical loss ratio” requirement provides a plan must commit 85% of premium dollars to health care services in large groups, and 80% in small groups. Insurance agents are complaining that this will put them out of business, a business in which they thrived on selling individual indemnity plans, with high deductibles, and medical loss ratios as low as 50-60%, to healthy individuals. Republicans agree with insurance agents and part of their “repeal and replace Obamacare” strategy is to put all these agents back in the business of fighting the reduction in health costs.
Agents and Republicans argue that consumers will reduce costs by purchasing “skin-in-the-game insurance” and on the margins of a $2.5 trillion annual purchase I’ll agree. But insurance companies, like medical clinics and health care systems, should be in the business of taking all comers and reducing the costs of care for everyone by improving their health. Putting the elderly, the disabled, the chronically ill, the homeless, and so many more in a “skin-in-the-game” market” makes this impossible. The problem for elected representatives is there is only one national association of insurance companies (AHIP) speaking for two distinct approaches to health care.
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