Blue Cross denies ill intent on health reform

Critics say plan will gut reforms

Staff WritersMarch 2, 2011 

  • Under the federal health care law, the state will establish a marketplace to offer insurance coverage to small businesses and people who do not have affordable health insurance through their employers.

    The exchange will maintain a website where people seeking coverage can search for plans and compare them.

    It will certify that the plans offer the minimum benefit outlined in the federal law and rate them.

    It must be in place by Jan. 1, 2014.

Consumer advocates are battling what they say is a blatant bid by North Carolina's largest health insurer to undermine health reform in this state.

The advocates claim that Blue Cross and Blue Shield of North Carolina didn't like the direction that some state lawmakers were considering for establishing a health insurance exchange. So the insurer, which is known for its lobbying clout, orchestrated a friendlier bill in the General Assembly and is trying to rush it through the legislature.

Blue Cross officials say that they support the proposed bill but didn't write it. And they simply want a place at the table as the state's health exchange is developed.

The health exchanges are a central piece of the new federal health overhaul. States are required to set up marketplaces where small businesses and people without health insurance through their jobs will shop for coverage.

One point of dispute involves the composition of the board that will help set up the health exchange, which is required to be in place by 2014. The proposed bill would give Blue Cross a representative with a permanent seat on the board. Other spots are reserved for two more insurance companies, the business community, the state medical society and the hospital association.

That has outraged consumer advocates, who are frantically lobbying lawmakers against it. They want a board with health economists and others that don't work for insurers. If the health exchange begins with a bias in favor of Blue Cross, it could hurt millions of consumers in the state for years, advocates say.

Advocates will introduce a coalition at a news conference today to fight for its vision of a "pro-consumer marketplace." The coalition includes AARP, the American Cancer Society, Action for Children North Carolina and others.

Scathing criticism

The proposed bill that Blue Cross supports "would bring the complete destruction of health-care reform from the inside in North Carolina," said Leslie Boyd, who runs Life O'Mike, an advocacy group in Asheville. Boyd named the nonprofit after her son, whom she says died from cancer because he couldn't afford health coverage.

"It's a clear conflict of interest for them to regulate themselves," she added. "They don't belong on a board that oversees their business. They'll never vote for anything that hurts their bottom line."

The board will help determine how the exchange operates, regulate health plans offered, oversee federal subsidies that will help the poor pay for coverage and more.

While Blue Cross supports the bill proposed by Rep. Jerry Dockham, a Republican from Denton who until last year owned an insurance agency, company officials insist they didn't help craft it. The bill is based on a model developed by the National Association of Insurance Commissioners, Blue Cross officials said.

"It's important for consumers to understand that insurers on the board won't undermine anyone's rights to get coverage," said Barbara Morales Burke, the company's vice president of health policy.

As the state's largest health insurer, Blue Cross has expertise on plan design, costs and other issues, she added. Before joining Blue Cross, Morales Burke was a chief deputy commissioner at the N.C. Department of Insurance.

Bill's author defends it

Dockham said his bill is just a starting point - a way to get all the interested parties to work out a compromise. The permanent seat for Blue Cross is one of the details that could be changed, he said, but they need to have a say in how the exchange is developed.

"They're going to be a big player in this whole concept."

The board needs to have a member with knowledge of the health insurance business, he said. But a few insurance-company representatives won't take over an 11-member board, Dockham said.

A rival bill proposed by Rep. Verla Insko, a Democrat from Chapel Hill, wouldn't allow any insurance representatives on the board, although they could have an advisory role. That bill was developed with consumer advocates, health professionals and others, based on a report from the N.C. Institute of Medicine.

Critics see scheming

Advocates say that Blue Cross worked with them on the Institute of Medicine report, but then subverted the process to reach a compromise and filed a bill that only advances its interests. Their fear is that Dockham's bill has a good shot of getting through the Republican-controlled General Assembly, and Insko's will not get a fair shake.

"We're establishing this new competitive marketplace in North Carolina, and consumers need to have faith and confidence in that marketplace," said Adam Linker, a policy analyst with the N.C. Justice Center's Health Access Coalition, a liberal advocacy group in Raleigh and frequent critic of Blue Cross. "They would not have that if insurance companies were running it."

Blue Cross also supports provisions in Dockham's bill that would limit the scope of this state's health-care exchange to what's outlined in the federal legislation that Congress passed last year. That legislation is being reviewed by various courts, and the General Assembly recently passed a bill that would make North Carolina the 27th state to challenge the constitutionality of the law.

In the meantime, officials in North Carolina are moving ahead with provisions that the law requires, such as establishing a health exchange.

"Should North Carolina's exchange go further than the federal legislation requires? We believe it should not," Morales Burke said.

alan.wolf@newsobserver.com or 919-829-4572

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