Are Harry and Louise lurking in the pantry again, ready to derail federal health reform like they did in 1994? Not necessarily. Recent state health reform efforts indicate a changing dynamic in which health plans could become a valuable ally of coverage-expansion advocates.
Health plans played a constructive role in some of the most significant state universal coverage battles of the past few years, and from that experience, policymakers have learned what they must do to bring the industry onboard.
A variety of states have pursued universal coverage in recent years. Most significantly, Massachusetts passed universal coverage in 2006, and we came close to doing so in California one year later. In both of those instances, rather than blocking coverage expansion, health plans were among the leading advocates. The Massachusetts Blue Cross and Blue Shield Foundation was widely credited with providing the conceptual framework for the bipartisan plan that was eventually adopted by the state.
In California, six of the states seven largest health plansAetna, Blue Shield of California, Cigna Corp., Health Net, Kaiser Permanente and UnitedHealthcareworked together on a universal coverage bill sponsored by Gov. Arnold Schwarzenegger and Assembly Speaker Fabian Núñez. The plans joined such disparate interests as hospitals, labor unions, business groups, physician group associations and the AARP to support reform. In a significant deviation from positions the industry has taken in the past, the plans worked with policymakers to craft bill language on a provision that most threatened their current business model: the requirement that insurers take all comers and not base rates on health status. As in Massachusetts, these plans were also willing to consider restrictions on profits and administrative expenses, standard health benefit designs and other once-taboo ideas.
In both instances, health plans did not automatically reject reforms they had previously opposed. We recognize better than anyone the inconvenient truth that the system as it exists today is failing, with record numbers of uninsured, costs spiraling out of control, and increasing frustration from patients, physicians and employers. We also supported reform because state policymakers adopted a cooperative approach that acknowledged our legitimate concerns.
We believe universal coverage should change the health coverage business from one in which health plans compete on avoiding risk to one where we compete on the best service at the best price. That transition requires an absolutely level playing field in risk management. Seemingly minor provisions may bring disaster down the road if they provide openings for gamesmanship.
Policymakers must work to bring health plans into the process. Our deep understanding of human behavior in the insurance marketplace, actuarial expertise and strategic insights are valuable assets to policy planners.
One way not to bring us in is to continue to demonize health plans. I know as well as anyone that our industry is not popular, but attacking us wont help achieve consensus for reform. The lions share of rising healthcare costs is not the result of health-plan profits or inefficiency. Rather, the increasing prevalence of chronic disease, caused in large part by poor health habits and an aging population, plus the ever-expanding array of new treatments and drugs, are largely responsible for healthcare cost inflation.
Many health plans are willing to have a share of skin in the reform game. But we arent willing to be the only ones paying the price. So long as other sectors of the healthcare industry are taking their lumps as well, many plans may be willing to go along. But if we are targeted while others are ignored, it will be difficult to win our support.
Finally, health plans have a corresponding responsibility to participate in good faith. If we want a seat at the table as our future is being shaped, we need to embrace change and look out for the public interest. If we start the debate in a defensive crouch, we might just end it flat on our backs. But if we extend a hand of cooperation, it is likely to be grasped.