MY CONVERSATION WITH STEVEN S. MARTIN OF BLUE CROSS BLUE SHIELD OF NEBRASKA
For those of you who may not have been following along, I sent an open letter to Steven S. Martin, CEO of Blue Cross Blue Shield of Nebraska (BCBS). In my letter, I described the outrage I felt when I found out my health insurance premium will increase by 46% for 2010. In writing the letter, my goal was to get through to BCBS that I was angry. Sometimes you have to publicly announce your concerns in order to get a response.
Well, I certainly succeeded in getting a response. Mr. Martin himself sent me an email expressing his desire to address my concerns. So today at 2 pm we spent a total of 45 minutes discussing my situation and what caused the increase. To be absolutely fair to BCBS and Mr. Martin, I was mistaken in thinking they did this to increase their profits. I admit that I was wrong. BCBS, as Mr. Martin explained, is a non-profit health insurance provider. They reinvest their profits back into a reserve fund. But I will also say that because BCBS did not explain the reason for the increase to me initially, I was pretty much left to make up my reason. My fault for assuming something, but it’s also their fault for not clearly communicating.
So on to the explanation. Mr. Martin said the increase is due to the fact that many healthy people who were in my insurance pool have left. Those of us that remain have to pick up the slack. Unfortunately, there’s a lot of slack to pick up. 10% of the people in our pool account for 50% of the premiums being paid out. The next 10% account for an additional 20% of the premiums being paid out. So essentially 20% of the people take 70% of the money. Pretty close to the old 80/20 rule. So as a healthy person, I’m financing the health care of the sick people in my pool.
We discussed all the issues surrounding the health care debate. In most cases I agree with Mr. Martin. Health care costs are completely out of whack. Politicians are coming up with solutions that really won’t benefit us. This issue is so complex, so unbelievably intricate, that I can honestly say that I believe the entire thing is going to collapse. Unless we wipe the slate clean and start from scratch we will continue to be weighed down by this issue.
Which brings me to my last item. I told Mr. Martin that my goal wasn’t to complain and solve my own problem. Many of you expressed to me that you’re in the same boat, so I asked that BCBS be a leader in this effort and help us all solve the problem of health insurance costs. I told him that small business owners don’t feel like they have a voice. No one is lobbying for us. In response, he suggested we put together a group of small business owners that will meet with BCBS to discuss our issues. This is a very encouraging step forward. If insurers and the people they serve can begin to talk through these issues, understanding where each other is coming from, then perhaps we can develop solutions together and keep the lawmakers from doing something drastic and unnecessary.
If you are interested in being a part of this group please send me an email. We’ll be a setting up a meeting in the next couple of weeks to discuss these issues. This is our chance to have a voice. I hope you decide to be a part of it.
October 8th, 2009 at 3:23 pm
So it sounds like the more people they allow into the pool the better for everyone. Which is the basis for health insurance anyway. So if BCBS steps up and becomes an innovator and opens the door for more people to become a part of the pool it seems that would benefit them from a market share point of view and would benefit the policy holders by having more resources available.
What they should do is eliminate pre-existing conditions and become and advocate for policy holders. They need to do it now before its made illegal to do so. If they did that they would position themselves as the go to brand. Does not solve the issue by any means, but could help relieve some of the strain until an alternative is available.
Being someone that has been denied due to pre-existing that would be amazing. I very rarely go to the doctor but in the cases I need to, to have the reassurance that I am covered I have no problem with 20% that need it most taking more from the pool. Its just the idea of knowing I am covered when my need comes.
October 13th, 2009 at 7:19 am
Matt, rope me in as things proceed, please. I’d like to be part of this on-going conversation.
October 13th, 2009 at 7:32 am
So Matt where do you stand on health care reform? A friend of mine said, “The only people who think their insurance is fine, are the people who’ve never had a health crisis”
October 13th, 2009 at 7:56 am
I agree on letting more people into the pool, I think the states should work together to remove restrictions on insurance companies working in other states. Right now its a hassle so not all insurance companies operate in all states.
Interesting thought on eliminating pre-existing conditions. I think I understand your motivation behind it, but then whats to stop people from just not paying for health insurance until they need it?
What if I could drive my car around without insurance, then when I got in an accident I bought car insurance and had them pay for the repairs?
October 13th, 2009 at 8:06 am
Hi Anne!
Thanks for the question. I’m trying to be as pragmatic about reform as I can, although seeing my premium rise caused me to act emotionally. This whole debate has grown into a partisan issue that cannot be solved by Congress - the Liberals want to spend too much and the Conservatives don’t want to spend anything. Personally, I’m all for a single payer system, but I don’t think that will ever happen in our country. The only real solution is to get the costs down. I don’t want insurance to pay for my doctor visits. Unfortunately, I need them to because the cost is so high. I think one way to solve this is through a public health system. I’d love it if there were small clinics set up around town where I can walk in and have a physician or physician’s assistant diagnose my illness and send me on my way for around $25-30. Right now, I have to pay $120 to visit my doctor’s office. I have insurance, but it doesn’t pay for my office visits. These clinics would also take the burden off of hospital emergency rooms.
Ultimately for me, reform means controlling costs. Whoever can devise a mechanism to control the costs will be my hero. Thanks, Anne!
October 15th, 2009 at 11:11 am
Matt, it sounds like you’re nearly referring to the quick care clinics that are springing up in grocery stores across town for diagnosis of basic illnesses. I don’t think they’re in the $25-30 range yet, but they’re definitely less than the $120 doctor visit. There are also some extended hour clinics that will treat basic injury instead of the ER if it’s not absolutely in the middle of the night. I’m not sure how much people actively seek out these alternatives when they have a low deductible with first dollar coverage. They expect these expenses to be paid with OPM (Other People’s Money).
OPM causes people to not care what the cost of service is and to simultaneously demand the highest level of service, driving up prices for everyone. I have a high deductible health plan and feel the burden of the first $6,000 of my medical expenses. I know how expensive the lab tests, ultrasounds, and extra visits are, and I count as being insured. But I don’t get OPM until I pay out the first $6,000 myself, which is a big pay cut for me. By the way, I still pay about $5,000 a year for the insurance so that I can get help if I go over the $6,000 mark. By then, my family cash flow has been diminished significantly.