Blue Shield CEO Pushes An HMO's Dream Plan: Universal Health Care Without Cost Controls

12/4/2002

From: Jerry Flanagan of The Foundation for Taxpayer and Consumer Rights, 415-633-1320

SAN FRANCISCO, Dec. 4 -- The brewing debate over the state's ailing health care system has brought a new voice into the fray. Bruce Bodaken, CEO of Blue Shield of California, announced a plan to provide health insurance for all Californians last night at the Commonwealth Club. The Bodaken proposal would mandate that employers provide health care to workers, enroll all eligible patients in public programs, and develop a minimum benefits package. Health care advocates lauded Bodaken's initiative but were critical of the plan because insurers would be guaranteed new customers but would not be subjected to cost controls.

"Maybe with the help of Bodaken and health care stakeholders we can implement a universal health care system. But that system will be unworkable unless we control insurer costs and mandate efficiency," said Flanagan. "We're glad that Blue Shield wants universal health coverage but all insurers must give into cost control."

The consulting company Milliman USA recently completed its annual survey on employer health-care costs and estimated that HMO costs will rise about 20 percent in 2003. According to the 2002 HMO Intercompany Rate Survey, HMO premiums for employers rose 16 percent to 22 percent in 2002, in line with the increases experienced in each of the last three years. (October 23, 2002, Business Week, "Health-Care Costs: The Painful Truth").

"All health insurance companies would embrace a plan that would guarantee them purchasers. Experience has shown that health insurers have no qualms with charging double digit premium increases and spending 40 percent of every premium dollar on overhead and advertising," said Flanagan.

A new report released by the Kaiser Family Foundation and the Health Research and Educational Trust (HRET) found that out-of-pocket health care costs have increase 27 percent over 2001 levels for some employees. 53 percent of employers responding to the survey thought that rising health care costs are their "greatest cost concern."

------ The Foundation for Taxpayer and Consumer Rights (FTCR) is a tax exempt, nonprofit organization deploying an in-house team of public interest lawyers, policy experts, strategists, public educators, and grassroots activists to advance and protect the interests of consumers and taxpayers. Founded in 1985 and led by nationally known consumer activist and attorney Harvey Rosenfield, FTCR works with public interest groups in Washington and throughout the nation. FTCR's day-in, day-out consumer protection and advocacy work embraces a wide variety of issues affecting the daily lives and pocketbooks of millions of Americans.