KC Health Care Reform

Part V of V: A Perspective from Greater Kansas City’s Largest Insurer

Download this piece

At Blue Cross and Blue Shield of Kansas City, we’re listening intently to your thoughts and concerns about health care and the proposed reforms now before Congress. In this fifth in a continuing series, we’d like to take the opportunity to address some of the key issues surrounding this complex and rapidly evolving issue.

What is a Public Option?

• Some House and Senate bills call for a panel of health insurance options to be made available to both the insured and uninsured.
• These options might include coverage plans from Blue Cross and Blue Shield, Aetna, Coventry, United, and “a Public Option,” which would look like Medicare.
• State Insurance Exchanges would oversee this panel of health insurance options to certify that the rates and benefit designs comply with health reform standards.
• The stated purpose of a Public Option is to keep health insurance companies “honest” and to reduce costs through “more competition.”

Is a Public Option Necessary for Health Insurance Reforms?

A Public Option is not necessary to implement health insurance reforms like:

• The guaranteed issuance of coverage;
• The ban on pre-existing conditions; and
• The ban on using health status to set rates.

These health insurance reforms are supported by the health insurance industry and other groups such as the American Medical Association and the National Association of Insurance Commissioners.

Is a Public Option Needed to Keep Health Insurance Companies “Honest”?

• Our company is regulated by the Kansas and Missouri Insurance Departments and numerous federal agencies.
• Our service to customers, physicians and hospitals has the highest ranking in Kansas City.
• We invest heavily in our community with dollars and volunteer service.
• We have the number one market position in our community because we are considered “honest.”

Why is Blue Cross and Blue Shield of Kansas City Opposed to the Public Option?

Blue Cross and Blue Shield of Kansas City opposes a Public Option because critical questions are not being answered:

• Would a Public Option have a negative impact on physicians and hospitals by paying less than private insurers pay for the same services? Would there be fewer physicians and hospitals to serve patients on the public option and thus actually decrease the choices for those patients?
• Would a Public Option be run on a financially sound basis? Or would it be allowed to accrue losses that would add to the federal deficit?
• Would so many private insurance policyholders switch to the lower cost Public Option that private insurance companies would go out of business thus limiting the choice of health plans for employers and individuals?
• Would there be a level playing field? Would the Public Option be exempt from federal and state taxes? Would it be exempt from solvency and reserve requirements? Would it be exempt from state mandates and other provisions that add regulatory costs to private insurance?
• How would the government assure fairness if it has the dual role of regulating while competing in the insurance market? Would it create unfair competition?

Can a Public Option Work?

The current House and Senate bills have different definitions of a Public Option. We believe the promises for more choice and lower costs are illusory, and, therefore, we have serious concerns about how it will affect the future of health care in America.

Yours truly,

Tom Bowser
President and Chief Executive Officer
Blue Cross and Blue Shield of Kansas City