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Thursday, March 18, 2010

More on healthcare

This piece on NPR's Morning Edition gives an excellent rationale for why we need government to have a larger role in health care in this country:

Anthem Blue Cross of California has become central to the political debate over controlling and regulating health insurance companies. Critics say the company is an example of what happens when federal or state regulators don't or can't control them. California regulators have tangled with Blue Cross for decades but the company has had many reincarnations

It may be hard to imagine now, but back in the 1930s, membership in a Blue Cross plan was practically a civic duty. Boy Scouts handed out enrollment brochures and preachers urged their congregation to enroll.

Blue Cross and Blue Shield plans formed as not-for-profits to give communities access to medical care and protect against personal financial ruin. All members paid the same amount no matter how old or sick, and no one was turned away. The Blues became one of the most trusted brands in America.

By the 1970s and '80s, though, Blue plans faced competition from for-profit insurance companies. Because the Blues accepted all comers, regardless of health status, their rates were typically higher. These new insurers who didn't offer universal coverage attacked younger, healthier people with better deals. In response, most Blue plans started charging sicker and older people more. Even so, Blue plans around the country were losing market share.

Many Blue plans saw the stock market as their savior. If they became for-profit, publically traded companies, they could sell stock and raise a lot of cash. So in 1994, the Blue Cross Blue Shield Association made a big change. For the first time, they would allow their franchises to convert from nonprofit charities to for-profit public companies. Blue Cross of California was the first to do so and became WellPoint Health Networks.

WellPoint used the capital that they raised from stock sales to acquire other companies to grow, to get bigger, and in so doing, put them in a position where they could sell to national accounts, 'cause that's where a lot of the money is in the group health insurance market.

WellPoint bought non-profit Blue plans in Missouri, Wisconsin and elsewhere. At the same time, Anthem, the for-profit owner of Indiana's Blue plan, went on a multi-state buying spree of its own. Then in 2004, WellPoint and Anthem merged and became the largest health insurance company in the country. And that meant the non-profit Blue plans that remained faced an even tougher marketplace.

As Blue plans across the country went for-profit,
the original mission of Blue Cross Blue Shield, to provide affordable, accessible health care to people in the state, has been lost. And now the mission is to make money for stockholders.

In a written statement, the National Association that controls the Blues trademark said all Blue Cross and Blue Shield companies are committed to providing affordable, quality health care. Still, some believe the only way to insure the Blues make good on that promise is to return them to their origins -sort of. Under the proposed health care bills, all insurance companies, for-profit and not-for-profit, would have to accept everyone and couldn't charge sicker people more . . .



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