Health care reform will revolutionize insurance industry – but less so for Michigan Blues

Blue Cross Blue Shield of Michigan has consistently supported health care reform that expands access to care, improves quality and patient safety, and reins in costs.

The New York Times on Sunday published a good summary of what the historic U.S. House vote to approve health care reform means for the various players in the industry. The story concludes the new laws will be a financial boon for the nation’s hospitals and drug makers while presenting myriad new challenges for the mostly for-profit insurance industry:

One place where the rules of the insurance game may shift most significantly is in a new kind of state-supervised marketplace, called exchanges, in which insurers would be required to sell their policies for individuals and small businesses. The exchanges are expected to involve much greater regulatory oversight than insurers now typically face and to alter their business models drastically. Currently, insurers seek to protect profits by trying to enroll only the healthiest individuals, while also charging enough to recoup the expense of covering sick people. But the legislation requires insurers to cover even people with potentially costly pre-existing conditions.

As a heavily regulated nonprofit insurer in Michigan, Blue Cross already operates its business within many of these new parameters. As a nonprofit, we never deny coverage or claims based on pre-existing conditions or health status, we community rate our coverage to provide the same premiums for individuals regardless of health conditions, and state law requires us to obtain state regulatory approval before we raise premiums. What’s more, we’ve long argued for reforms to state law that would end the insurance-industry practice of cherry picking patients described in the Times piece above.

We have concerns with the recently passed legislation, but we are encouraged by some of the changes that will impact our industry and the rules that we and our competition must follow in covering Americans.