How to make the health insurance market work: BCBSNE's principles for a better system

Washington debates the fate of the U.S. health care system

These days, all eyes are on Washington as the fate of the Affordable Care Act—and its replacement—is being determined. The House of Representatives has passed its version of the American Health Care Act, which is intended to replace the current health care law. The House bill is now in the hands of the Senate, whose members will review and make changes of their own.

Since the bill almost definitely will undergo significant changes in the Senate, it’s too early to speculate on how it will change the current health care law—and what that means for our customers. We continue to work at the state and federal level to advocate for reform that’s in the best interests of all Nebraskans, making health care and health care coverage as accessible and affordable as possible.

We believe the health insurance market can be fixed

We believe Nebraskans are best served by a competitive private health insurance market that offers consumers the choices they want at a price they can afford. We believe that to achieve this goal, any future health reforms must adhere to three key principles:

  1. Health insurance should be available to everyone, regardless of pre-existing conditions
  2. States know their local health care systems best, and they should be empowered to meet the needs of their local communities
  3. Health care must be more affordable for patients, families and taxpayers, while key protections such as no lifetime caps on benefits, equal rates for women and men, and allowing young people to stay on their parents’ plans until age 26 should remain in place

Omaha World-Herald article:
5 things you need to know about health care and insurance in the U.S..

Make Health Insurance Available to Everyone

We believe everyone should be able to obtain health insurance regardless of any medical conditions. In order to have a health insurance system in which everyone can obtain coverage regardless of their health status, there must be a balance among those enrolled that includes healthier individuals along with those who need significant care. Younger, healthier people must have adequate incentives to sign up for coverage; there must be adequate funding for those with very significant medical needs; and there must be incentives for everyone to maintain continuous coverage. Only with these three pillars working together can consumers have choices among affordable plans.

  1. Strong incentives for young and healthy people to buy coverage. In order to create a more balanced mix of enrollees and bring down costs, it is critical that premiums be made more affordable for everyone, especially younger, healthier people who may not value health insurance. Today, substantially greater numbers of older people purchase coverage in the individual market. There should be more flexibility in setting rates (e.g., 5:1 age bands) for older and younger consumers, who use fewer medical services. Tax credits must be sufficient and adjusted for age, income and geography to help those with moderate incomes and in higher-cost areas purchase coverage.
  2. Broad-based funding for those with significant and costly medical needs. Five percent of people who buy coverage in the individual market now represent almost 60 percent of health care claims’ costs. A sustained federal funding mechanism to support the cost of caring for those with serious health conditions is essential to make premiums more affordable for everyone.
  3. Powerful incentives for individuals to maintain continuous coverage. It’s important for people to maintain coverage throughout the year. Those who don’t stay covered continuously drive up costs for everyone because they buy coverage when they need medical care and then often drop it again. Incentives are needed so people cannot purchase coverage only when they get sick and then drop it after they receive care and no longer need medical services.

Empower States

We believe states best understand their local health care markets, and are in the best position to protect consumers and ensure insurance plans meet their needs. Returning more regulatory authority to the states, such as through waivers, would allow them to establish more flexible rules and foster a competitive health insurance market for individuals and small employers. As more authority is returned to states, it is essential that there be:

  1. Basic standards for insurers. In order for there to be effective competition, there must be basic rules for coverage that can be purchased with federal tax credits. For example, coverage must meet defined benefit packages, have a minimum actuarial value and be considered credible coverage under HIPAA.
  2. A level playing field for all competitors. Requirements must apply equally to all competitors selling insurance in state individual and small group markets, regardless of where they are licensed or domiciled. A level playing field is important to assure effective competition, prevent adverse selection and ensure effective protection of consumers by experienced state regulators.
  3. Effective risk adjustment. State regulatory flexibility must be coupled with an effective risk adjustment system that provides the right incentives to cover everyone, including those with pre-existing conditions. Risk adjustment is critical to support the costs of caring for those with very costly medical conditions in a market that provides coverage to all regardless of health status.

Promote Affordability

We believe that health insurance and care must be more affordable for patients, their families and taxpayers.

  1. Maintain policies that help keep coverage affordable and accessible for patients and families. We support a number of common sense policies that are in place today to make coverage more affordable for patients and families. This includes rules that require insurers to spend 80 cents of every premium dollar directly on medical care for our members, ensuring women cannot be charged more than men for coverage, no lifetime caps on insurance coverage and allowing young people under age 26 to stay on parents’ health insurance plans.
  2. Ensure more affordable premiums and deductibles. Health insurance premiums in the individual market today are too high for many. To address this, health plans should have more flexibility to manage benefits and networks, and to provide access to safe, effective and affordable prescription drugs; younger people must have adequate incentives to sign up for coverage; and broad-based funding should be provided for those with significant medical needs. In addition, family deductibles average nearly $7,500 under a silver plan today. It is critical that lower-income Americans continue to receive help with out-of-pocket costs, such as co-payments and deductibles, to make coverage affordable and to make sure they can get the care they need.
  3. Address the underlying cost of care. Health care spending in the U.S. is $3 trillion a year – more than any other country – straining the budgets of families, businesses and taxpayers alike. The cost of medical care, which includes caring for chronic or long-term medical conditions and the rising cost of prescription drugs, is the single biggest factor behind overall U.S. health care costs, accounting for 90 percent of spending. Any plan to improve health care in our nation and to make it more affordable must address the underlying costs of medical care, including by promoting higher quality, more coordinated care for those with chronic conditions and addressing the rising costs of prescription drugs.

Omaha World-Herald article:
People on both sides say health care is a mess. How will we fix health care?

HEALTH INSURANCE TERMS


COINSURANCE

The percentage of the bill you pay after your deductible has been met.

COPAY

A fixed amount you pay when you get a covered health service.

Tiered benefit plan

A health care plan featuring multiple levels of benefits based on the network status of a particular provider. 

DEDUCTIBLE

The annual amount you pay for covered health services before your insurance begins to pay.

emergency care services

Any covered services received in a hospital emergency room setting.

SUBSTANCE ABUSE DISORDER SERVICES

Includes behavioral health treatment, counseling, and psychotherapy


in-network provider

A provider contracted by your insurance company to accept an agreed upon payment for covered services. 

OUT-OF-network provider

A term for providers that aren’t contracting with your insurance company. (Your out-of-pocket costs will tend to be more expensive if you go to an out-of-network provider.)

out-of-pocket

Your expenses for medical care that aren’t reimbursed by insurance, including deductibles, coinsurance and co-payments.

penalty

If you can afford health insurance, but choose not to buy it, you must have a health coverage exemption or pay a tax penalty on your federal income tax return.

premium

The amount you pay to your health insurance company each month. 


Preventive services

Health care services that focus on the prevention of disease and health maintenance.

rehab SERVICES

Services and devices to help you recover if you are injured or have surgery. This includes physical, occupational and speech therapy.

special enrollment period

The time after the Open Enrollment Period when you can still purchase health insurance only if you have a qualifying life event (losing other health coverage, having a baby, getting married, moving).

specialist

A physician who has a majority of his or her practice in fields other than internal or general medicine, obstetrics/gynecology, pediatrics or family practice.