Health care reform will cost how much?!?

The health care reform package that passed this week promises to promote sweeping change in the health care industry and in the lives of health care consumers. But all that change is going to cost a lot of dollars. How big will the bill for health care reform be? It’s estimated to cost about $940 billion over the next 10 years. That includes:
  • $434 billion for expansion of Medicaid and Children’s Health Insurance Plans enrollment
  • $466 billion for subsidies to fund insurance for individuals and families up to 400 percent of the federal poverty level (which was $22,050 for a family of four in 2009)
  • $40 billion for small employer tax credits
The health care reform package also includes proposed ways to fund reform, mostly through penalties and taxes. Proposed funding includes:
  • $328 billion in reduced Medicare scheduled payments and Medicare Advantage cuts
  • $210.2 billion in Medicare payroll tax increases
  • $70 billion from premiums for long-term care program
  • $69 billion in penalties paid by individuals and employers that don’t buy insurance
  • $60 billion in market share taxes on insurance companies
  • $36 billion in cuts to Medicare and Medicaid Disproportionate Share payments
  • $32 billion from taxes on “Cadillac” health plans
  • $27 billion from taxes on brand-name pharmaceutical companies
  • $20 billion from taxes on medical devices starting in 2013
If you’re interested in the tax provisions of the health care reform bill, read tax firm Deloitte’s comprehensive report.
The coming months will tell us more on how much health care reform will cost and how it’s going to be paid for.  What do you think?  Does the package contain adequate ways to fund reforms?

Got an opinion about health care reform? Blues Perspectives blog wants your comments

President Obama’s signing of sweeping health care reforms into law is dominating the news cycles and fueling heated conversations across the country. Love it or hate it, the passage of reforms by the slimmest of margins after nearly a century of failed attempts represents history in the making.
But as would be expected, given our current political climate and the scale of this policy change, the move is stoking fierce resistance from some quarters.

Here’s a response we received to our statement on reform from earlier this week. In responding to the U.S. House vote approving reform legislation, Blues President and CEO Daniel J. Loepp said the passage “does not mark the end of the process to reform health care. It is just the beginning.”
President Loepp,
Your statement sounds as if the fat lady has sung, and the healthcare reform issue is settled; I hope not. The Dems had to cheat to “pass” the vote; simple majority vs. required 60 votes. The fight goes on, don’t hang up your gloves just yet, lest you give the impression you are in favor of what passed for ‘reform’…that would make me nervous.
Cadillac, MI
We’ve written here about our own takes on health care reform and how we already play by many of the same rules that will soon apply to all insurers. And we’ll use this space to keep Blues members abreast of how the changes affect them. But we’d like to hear your opinions as well.
What do you think of the new reform laws? What are your concerns? Many of us here at Blue Cross Blue Shield of Michigan continue to have questions about reform. What are yours?
Leave your thoughts in the comments well below our individual blog posts. If we like your comments, we might even feature them in a new post.

What national health care reform means for Michigan Blues members

Today’s signing of health care reform legislation by President Barack Obama has many Blues members asking what the changes mean for them. While Blue Cross Blue Shield health policy staff continues to review the impact of what happened today, here is information that may be of help to BCBSM members.
 Q: I have coverage through an individual policy with Blue Cross Blue Shield of Michigan. What’s going to change?
A: If you currently have health insurance in our individual market, almost nothing will change.
Plans that were in existence up until March 23, 2010, when President Obama signed the underlying national health care reform bill into law, largely do not have to change, and nothing will require you to change plans. However, there will be some small changes that will impact your benefits.
Starting next year, you will be able to retain dependents up to the age of 26 on your policy. Additionally, no lifetime dollar limit will apply to your policy.
Since Blue Cross Blue Shield of Michigan already largely acts in compliance with the new law, many of the reforms will necessitate changes in other carrier’s policies, but not for ours. For example, the new law requires an 80 percent minimum loss ratio that requires insurers to spend at least 80 percent of premium dollars on medical expenses, as opposed to administrative costs. Blue Cross already has an individual market minimum loss ratio of more than 100 percent, meaning we lose money on individual policies. Blue Cross also already covers most preventive services without any cost-sharing, another new requirement.
New policies, however, will have many more changes. Stay tuned to this blog for more information as it becomes available.
Q: I have Blue Cross Blue Shield of Michigan coverage offered through my employer. How will my policy change?
A: National health care reform largely does not impact employer-based coverage that is currently in existence. Except for a few key provisions, these policies are grandfathered in as of the bill’s enactment on March 23, 2010.
The changes coming next year include the ability to add dependents up to the age of 26 on your policy and the elimination of any lifetime dollar limit for paying out claims. If any of the dependents on your policy are under the age of 19, they will not have any of their pre-existing conditions excluded from coverage. Additionally, your plan must meet an 85 percent minimum loss ratio, meaning at least 85 percent of your premium dollars must go directly to pay for medical care costs, not administrative expenses.
However, starting in 2014, there will be many changes in the way employers provide this coverage. These changes are specific and would differ from employer to employer based on the way they currently provide coverage. Stay tuned to this blog for more information as it becomes available.

“Get Moving U.P.” revs up winter activity of 500 in Blue Cross and WELCUP’s challenge

They could have just hibernated like some Upper Peninsula critters. Instead, more than 500 U.P. folks took on or turned up their winter activities. Payoffs? Healthier lifestyles. More energy. Weight loss. All in a six-week winter fitness challenge. It’s another activity the Michigan Blues sponsors, with partners such as the Wellness Council of the U.P., to help lead all Michiganders to a healthier future.

Passage of national health care reform shouldn’t stall Michigan reform efforts

Sunday’s historic vote by the U.S. House to approve health care reform means an end to the widespread insurance industry practice of denying coverage to patients with pre-existing conditions.

That’s essentially the same thing Blue Cross Blue Shield of Michigan has long sought as part of our push to enact individual health insurance market reforms in Michigan.
The prohibition against insurers being able to cherry pick younger, healthier patients doesn’t fully kick in until 2014. Meanwhile, the Blues continue to offer coverage to anyone who needs it regardless of health status or pre-existing conditions.
While we’re proud of our unique mission as insurer of last resort, we’ve suffered financially in an uneven playing field for insurers in Michigan. We lost more than $280 million in 2009 on our individual lines of business.
Reforming our own regulatory system to prepare it for the changes to come is like getting your house in order before guests arrive. Blue Cross supports efforts to enact guarantee issue, community rating to set all rates equally regardless of personal health status, and reinsurance, a mechanism whereby all insurers would share the costs of the most expensive claims. We also encourage state lawmakers to address our antiquated regulatory system and update it to enable a more competitive market in Michigan.
Michigan cannot afford to wait any longer.

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.

Need help sticking to personal health goals? Blues wellness programs can help

Most of us know how to live healthier lives, but it’s another story to actually discipline ourselves to do it. Many of the chronic health conditions affecting people — and wreaking financial havoc on the health care system — can be controlled by diet, exercise and healthier lifestyle habits. Sometimes, we just need some support and guidance to make it happen.

There are more opportunities today to get the advice you need to successfully manage your health. As a recent story in the Detroit Free Press noted, more people are turning to wellness coaches and fitness experts to help them deal with issues like stress and weight management, wellness and to find ways to make personal health a priority.  

Blue Cross Blue Shield of Michigan members have wellness coaches and other resources readily available through BlueHealthConnection, our collection of health management programs, designed to provide information, assistance and resources to help our members take charge of their health.

In addition, the Blues are committed to building healthier communities by providing members with all kinds of incentives and support to improve personal well-being like discounted gym memberships, fitness equipment and groceries through  
The more we can support and empower people to take charge of their health, the more successful we will be in building a healthier Michigan.

Blues team up to cover uninsured children in Michigan

Helping residents get access to health care is an important part of the Blues’ social mission. That’s why we’re proud to participate with the Michigan Department of Community Health in the MIChild program for kids.
The program provides health and dental coverage to children of working families for just $10 a month. Children may qualify if they:
  • Are legal residents of Michigan
  • Are younger than age 19
  • Don’t have other health care coverage
  • Are not married
  • Meet certain financial guidelines
The $10 monthly premium per family provides complete coverage for things like dental exams and routine checkups, well-baby care and child care visits, emergency care, prescription drugs, shots and vision and hearing care. There are no other costs so long as you see your health plan’s doctors.
If you know a child in Michigan who lacks health insurance coverage, tell his or her parents or guardians about MIChild. Or visit the state’s MIChild Web site for more information or to enroll.

The cost of care: navigating an uncertain health care landscape

All across the country, people are mystified by the cost of care. Why have health care costs soared so dramatically over the past 50 years? What elements contribute to the cost of care? What is being done to turn the situation around?
While Blue Cross Blue Shield of Michigan doesn’t have all the answers, we are committed to exploring what can be done to stem the tide of rising health care costs.
One way we’re doing it is through our Value Partnerships initiative. This series of collaborations among the Blues, physicians and hospitals is improving health care quality while controlling health care costs. For example:
·         Physicians participating in BCBSM’s Physician Group Incentive Program have dramatically reduced use of radiology services without impacting quality, resulting in savings of approximately $9.46 million in 2009.
·         A total of $13 million was saved in one year by decreasing ventilator-related pneumonia through one of these collaborations.
·         The Blues’ Cardiovascular Consortium saves an estimated $15.2 million annually in statewide health care costs, by reducing complications and increasing safety for angioplasty patients
At Blue Cross, we will continue our efforts to reduce health care costs in Michigan by working with our physician and hospital partners.   By working together, we are discovering how to reduce and prevent complications, and provide better, safer, higher quality health care for Michigan residents.  That’s key to controlling the cost of care.
To learn more about Value Partnerships, visit and click on the Programs and Studies tab.

Michigan Blues ‘prepared to contribute to a national solution for health reform, CEO Dan Loepp says

You may have heard Blue Cross Blue Shield of Michigan’s name come up in recent media stories about health insurers raising premiums for individual subscribers. The news accounts followed a report from the Obama administration that positioned the trend as a key target for health care reform efforts.
Ironically, we couldn’t agree more with the premise of that report – despite being unfairly lumped with the rest of the insurance industry.
In Wednesday’s Detroit News, Blues President and CEO Daniel J. Loepp writes that the Michigan Blues are already mirroring many of the practices that reform advocates want health insurers to adopt:
“We are nonprofit,” Loepp writes. “We never reject anyone for having a pre-existing condition. We charge the same premium regardless of health condition. We self-limit our margins – earning just one-tenth of 1 percent margin during the past 20 years. Our rates are closely regulated by the state. Our finances are transparent to regulators and the public.
“Blue Cross Blue Cross Blue Shield of Michigan works hand-in-hand with the government to promote access to health care.
“What’s wrong in Michigan is that Blue Cross Blue Shield of Michigan is the only health insurance company in the state that operates its business under the guidelines I’ve described. This fact has been ignored by Washington, but it’s the reason our premiums are rising in the individual market.”
Loepp goes on to describe Michigan’s “broken system” of regulating health insurers and its debilitating effect on the Blues’ underwriting business. You can read the entire column here.
We’ve written here before about the Blues’ support for health reform. You can also check out a letter Loepp sent to U.S. Health & Human Services Secretary Kathleen Sebelius responding to the department’s report.