Kaiser Health Foundation wrote recently that two of the largest providers of health insurance to federal employees, retirees and dependents are in a battle to scoop as many people up as they can in an effort to increase profit, I am sure. Also, Obamacare is changing the way things are done, and insurers are ready to try to attract new customers.
Both United Healthcare and Blue Cross/Blue Shield Association appeared before Congress recently to talk about a law that UHC says stifles competition and results in higher costs for health care consumers. A 1959 law meant to boost non-profit systems is at issue, and BCBSA is in favor of keeping the law unchanged.
UHC, and also Aetna and Humana companies (who were not at the hearing) favor modifying the law so their companies can compete in areas that are now primarily served by BCBSA. Blue Cross/Blue Shield currently serves approximately 65% of the current and retired federal employees and their families nationwide.
Blue Cross/Blue Shield, for their part, claim there is enough competition, with 230 plans currently enrolled. Also part of BCBSA’s concern is for their wide reaching nationwide plans. They claim their ability to serve nationally would be hurt by modifying the law.
Of course, with Congress, you get this:
Tom Choate, chief growth officer for UnitedHealthcare, said the Blues’ “monopoly” of the program is stifling competition and innovation of insurance products.
“Much has changed since 1959. We’ve moved from typewriters to laptops; from rotary dial phones to smart phones; from 45s to iTunes,” Choate said at the hearing. “It’s time to update that 1959 law, so federal employees and the federal government can also benefit from innovation and competition in the health care marketplace.”
Republicans on the subcommittee said they wanted to increase competition but did not trust the Obama administration to ensure that the new plans won’t serve only low cost regions of the country.
“It is our duty to see how we can continue to save taxpayers’ hard earned dollars and provide the best coverage for our federal workforce,” said Rep. Blake Farenthold, R-Texas, chair of the House subcommittee.
The Obama Administration is on record as encouraging competition as a matter of keeping costs down. I support this position, because no one company should control nearly two-thirds of the subscribers in this program.