barney-tobey-and-remember-kid-you-ve-got-blue-cross-new-yorker-cartoonFrom an anti-trust lawsuit as recounted in How are Blue Cross and Blue Shield Connected?

In the late 1930s, the Blue Cross plans, developed in conjunction with the American Hospital Association, were designed to provide cover the cost of hospital care, while the Blue Shield plans, developed in conjunction with the American Medical Association, were designed to cover all health care. At first, Blue Cross and Blue Shield were strong competitors. But over time, to address competition between each other and other commercial insurers, the Blues agreed to centralize the ownership of their trademarks and trade names. In 1982, Blue Cross Association and the Blue Shield Association merged and the board of directors of the combined associations adopted a strategy not to compete with each other. By 1984 health plan members of the association consolidated at the local level and by 1985 all Blue Cross plans and Blue Shield plans within a state should consolidate so there was only one plan per state.

Conversation at a Christmas Party:

Friend: I have insurance for the first time in years. Looking forward to getting some things fixed

Friend’s partner: Not too much. You know about those high deductibles.

Friend: Let me tell you about this foot. A couple of years back I had a Blue Cross policy and called to see if I could have surgery for this chronic bone spur that’s causing me pain. The nice person on the phone says “Sure, let me just get some information and we’ll get back to you.” After she updates my information I get a letter canceling my policy. I’ve been uninsured since. Now I have my card, and I’m getting my foot fixed.

Al.com ran a very nice set of stories on Blue Cross of Alabama (and the US) today. In case you are unfamiliar with Blue Cross of Alabama, it provides health insurance for 86% of all non-governmentally provided health care coverage in our state, collects $4 billion in revenue, has $800,000,000 in cash in hand, and has over 7 executives in the $1,000,000 annual salary club. What else do they do with their “savings?”

Mackin said reserves are maintained to protect insured Alabamians from “the burdens of unpaid medical bills.” Reserves are regulated by the Alabama Department of Insurance, she pointed out.

I have previously written quite a bit about Blue Cross of Alabama which I will not repeat. Living in Alabama, you simply get used to Blue Cross being the 800 lb. gorilla. You get used to them having a pre-existing condition clause that precludes adequate care for chronic illnesses and occasionally resulting in bankruptcy as a consequence of a catastrophic illness. You get used to them cancelling policies on a whim. You get used to them dictating that you accept hospital rates that are below Medicare and daring you to challenge them (What’s the worst they can do? Oh, yeah, they can deny you access to 86% of insured patients). In exchange, if you are 27 years old and healthy, you get to pay the least amount for health insurance in the United States. The level of oversight in Alabama is, one might say, minimal. The insurance regulators last reviewed the books in 2009.

The Affordable Care Act is being blamed by Alabamians for increasing the cost of commercial insurance for Alabamians. Those like my friend who had insurance canceled when they tried to use it are much less vocal than those who blame “Obummer” for, well, everything they perceive as bad. The Republicans are still looking for the replace part of “Repeal and Replace” to capture this hatred of all things Obama. They have re-latched onto “sell insurance across state lines to increase competition”  as an alternative. Al.com points out that today the Blue Cross confederation already provides insurance for ONE IN THREE Americans in multiple states who are accountable to multiple regulators. Wonder if the Alabama regulators are ready for the national stage?

In a poll of health care executives about the Affordable Care Act, 93% felt that their system would provide measurably better care as a consequence of the implementation of the law. They said it would do this through:

Reducing the number of hospitalizations (54 percent), reducing the number of readmissions (49 percent), and reducing the number of emergency room visits (39 percent). Other likely sources included reducing costs for medical devices (36 percent) and drugs (27 percent), along with improving back office efficiency (23 percent)

They were not asked how they felt about Blue Cross of Alabama taking over the nation’s health care.

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