Blue Cross and Blue Shield of Louisiana has always supported meaningful healthcare reform that would improve the quality of healthcare, rein in costs and extend coverage to all Americans.
As passed, the Patient Protection and Affordable Care Act (PPACA) makes progress in some of these areas. But we have concerns about some of its other consequences. We're committed to joining all healthcare stakeholders to make healthcare reform work. As state and federal agencies write the regulations and develop the details of the new law, we continue to support activities that improve quality and keep healthcare costs in check.
We strongly believe everyone should have health insurance. When more people are gathered together in the pool of policyholders, the risk and costs are spread more broadly among everyone.
The PPACA eliminates preexisting condition exclusions and limits the ability of insurers to charge higher rates due to health status. It also ultimately guarantees coverage to everyone.
The law does impose penalties for those who do not obtain acceptable coverage. However, these penalties are so low – only $95 in the year 2014 – that many people will likely choose to pay the penalty rather than the relatively higher monthly insurance premium.
We are concerned that people will likely wait until they are sick to buy coverage, which will increase premiums for everyone – perhaps to the point of being unsustainable.
There is already a shortage of primary care doctors in America. As more people join the insurance market under the new law, this shortage could get worse. There could be longer waits to see physicians and to schedule procedures.
We are encouraged, however, by the new law's provisions to increase training, scholarship support and financial incentives for primary care doctors and general surgeons.
The only way for an insurance company to stay financially solvent is by taking in enough premium dollars to cover the claims of all customers with healthcare needs. The PPACA does not allow insurers to provide discounts currently available to young males age 20 to 40. As a result, the premiums for these customers will likely increase dramatically. If young males have to overpay for their insurance, they may decide not to purchase it altogether. This would cause everyone's rates to increase, as young males tend to subsidize other, higher-cost customer segments.
While at least 15 million people are expected to be added to Medicaid under the law, much of the financing for the law comes through cuts to Medicare funding ($460 billion in the first 10 years).
Doctors and hospitals are already paid below cost for the services they provide to Medicare and Medicaid patients. Many doctors and hospitals recoup these losses by shifting the costs to private health insurance companies like Blue Cross, charging more to insured patients than they would otherwise. These costs must then be passed on in premium increases.
Blue Cross has always worked hard to negotiate fair and reasonable provider rates on behalf of our members. But we now expect the pressure to raise reimbursement rates to increase in the coming years. In fact, insurers across the nation are already seeing unprecedented requests for higher rates from network providers.
If insurers try to hold the line in order to keep premiums affordable for customers, some doctors and hospitals may choose to leave their networks instead of accepting lower rates. This increases out-of-pocket costs for customers.
We are concerned that the PPACA does little to address the underlying cost drivers of healthcare. It's well known that the cost of premiums is determined by the cost of healthcare. When healthcare costs go up, premiums have to go up to cover those expenses.
The law adds the following taxes and fees on the healthcare industry:
This information has been compiled from a variety of sources. Please note that interpretations may vary, and you should consult your attorney and/or tax advisor for more specific information. New and existing state laws may impact many of these provisions as well as future federal and state regulations. Please also note that the new law allows for "grandfathering" of certain health plans, making those plans not necessarily subject to portions of the new law.
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