Blue Cross Wary of Mandates in Governor’s Health Reform Plan
Blue Cross of California is opposing Gov. Arnold Schwarzenegger's (R) health care reform proposal, the only major insurer in the state so far to do so, the San Jose Mercury News reports.
Blue Cross' opposition to the plan could be a significant obstacle for the governor in part because the insurer provides coverage to about one in four of the state's insured residents. Moreover, Blue Cross leads insurers in California in political spending and also makes substantial donations to community organizations.
Blue Cross officials cite concern over a provision of the governor's plan that would require insurers to spend 85% of premiums on health care services. Blue Cross currently spends 51% to 79% of premiums on health care, depending on the type of plan, according to financial data submitted to the state.
Blue Cross also is resisting a provision that would require insurers to sell policies to all California residents, regardless of pre-existing medical conditions. The company in a February letter to lawmakers wrote that providing coverage to all applicants would cause premiums to "spiral out of control" (Zapler, San Jose Mercury News, 4/15).
The state in March fined Blue Cross $1 million for improperly canceling individual health insurance policies after some members became pregnant or sought medical treatment for chronic conditions.
Blue Cross cancels about 1,000 policies annually in California (California Healthline, 3/23).
Ruth Liu, an adviser to Schwarzenegger and undersecretary of HHS, said the administration believes that mandating how insurers spend premium costs is "a legitimate request because we're sending a lot of business their way" as millions of new enrollees obtain coverage. She added, "We're not singling out any particular health plan" (San Jose Mercury News, 4/15).
Speaking on behalf of Gov. Schwarzenegger in his weekly radio address, Department of Health Services Director Sandra Shewry discussed provisions of the governor's health care overhaul proposal that would seek to expand health insurance coverage to all state residents (Office of The Governor, 4/14).
Audio of the address and a Spanish translation are available on the governor's Web site.
PBS' "The Charlie Rose Show" on Thursday included an interview with Schwarzenegger in which the governor discussed his health care reform proposal and stem cell research, among other topics (Rose, "The Charlie Rose Show," PBS, 4/16).
Video of the segment is available online.