Commentary: Don’t Shoot The Messenger, Say Health Insurance Carriers
Copyright 2010 Dolan Media Newswires The Idaho Business Review (Boise, ID)
August 16, 2010 Monday
COMMENTARY
1341 words
Commentary: Don't shoot the messenger, say Idaho's health insurance carriers
Michael Boss
It wasn't very many years ago that the media were replete with Health Management Organization (HMO) horror stories: single moms denied breast cancer treatment, customers dropped from insurance plans when a critical illness necessitated getting the care they had faithfully paid their premiums to guarantee.
The subtext was typically one of heartless corporations putting profit ahead of ethics in the name of controlling spiraling health care costs.
While the term "HMO" is scarcely uttered these days, the health insurance industry has been back in the media spotlight as a result of the congressional debate over health care reform - and Idaho's major carriers seem to agree that the portrayal of their industry has not been a favorable one. Rather than facing a public relations dilemma, however, Idaho health insurance companies are embracing an opportunity to educate and empower their customers at a time when those customers may be more willing than ever to engage with them.
"The debate in Washington wasn't about health care reform, but about health insurance reform," Steve Fredriksen, owner of Fredriksen Health Insurance in Boise, said. "And it was dishonest from the get-go. Politicians were out to demonize the health insurance industry. "
For Fredriksen, whose company has brokered group and individual health insurance policies, Medicare coverage, and employee benefits since 1980, Idaho has been well ahead of the curve when it comes to reforming health insurance practices to increase access to care.
"In the 1990s the Idaho Legislature and the major insurance carriers in the state worked together to adopt the National Association of Insurance Commissioners (NAIC) Small Group Reform and Health Insurance Reform Bill," said Fredriksen. "This ensured that everyone in Idaho had complete access to health insurance, and for the past 15 years nobody in Idaho has been denied coverage. "
The NAIC further insured that Idahoans would not be turned down on the basis of pre-existing conditions, no matter how severe, by creating a high-risk pool that Fredriksen broker Todd Miller described as "one of the most successful and affordable in the country. "
Miller is concerned, however, that the result of recently enacted health care reform legislation will be to put Idaho on a par with other states - which means that health insurance premiums will be driven upward at a faster rate.
From the perspective of Karen Early, director of corporate communications for Blue Cross of Idaho, a negative impact on premium costs as a result of federal legislation is a foregone conclusion.
"Health care reform will not lower premium costs because we are expanding the number of people being covered, expanding benefits, and expanding subsidies to try and cover those costs," she said. "That money has to come from somewhere, and part of it is going to come from an increased tax on health insurers, which will add to premium costs. "
While people in New York may not see much of a difference in their rates as a result of health care reform, Early explained, Idaho will, because the state currently has the lowest health insurance premiums in the nation.
"If you are a 30-year-old non-smoker with a $5,000 deductible, you can get insurance for $69 a month - at full coverage," she said. "When health care reform kicks in we anticipate that the premium for that same person may be three times as much. "
This eventuality could certainly create an image issue for Idaho's health insurance carriers, even though that issue would not be one of their making. Said Fredriksen, "When premiums are going up 20 to 30 percent a year, you can't blame people for getting upset, but insurance companies are a reflection of the costs they pay. "
Rather than shooting the messenger when Idaho businesses and individuals find themselves facing the bad news of higher health insurance costs, however, the state's major carriers are anticipating a public relations opportunity rather than a public relations crisis - so long as customers first understand a critical fact about their state's health insurance companies: all of the major players are not-for-profit businesses.
"Every company has to operate in the black if it is going to survive," said Early of Blue Cross. "But to suggest that insurers are only in it for profit is a misconception. Our profit margin is between 1-1/2 and 2 percent, which puts us on a par with grocery stores. "
The public relations opportunity facing Idaho health insurance carriers, at a time when many consumers are viewing Washington as part of the problem of unsustainable health care costs, is to engage customers in becoming part of the solution.
"It is our job in this industry to help educate," said Dave Self, vice president and Idaho regional director for Pacific Source, the Oregon-based health insurance company that last year acquired Boise-based Primary Health. "In the past that has been a challenge because most folks don't think about health insurance, which is as it should be. It is supposed to be there when you need it and do what it is supposed to do. "
"In the late '80s we started to reach out a little more to the consumer," Self said, "but with reform being driven at the federal level, what we have today is an opportunity to really educate because people because they are paying more attention. "
Fredriksen, Early, and Self all agree that the initial opportunity for engagement with customers in the wake of health care reform legislation will be to help them understand its impacts on their policy options - especially given the fact that so many of the details of the legislation's enactment are not yet clear.
"Every day we watch the e-mails from the feds on the new provisions and changes - the natural evolution of all the requirements to support a legislative clause - and we then have to determine how that will impact the market," said Miller.
Health insurance company outreach to customers and the community at large will increasingly take the form of collaborations aimed at what the insurance carriers seem to view unanimously as the critical issue that health care reform failed to address: the forces endemic to our health care delivery system that drive cost inexorably upward.
"Our opportunity today is to say if there is a dollar on the table, how much of it gets spent, in what bucket, and how can we give our customers the tools to spend that dollar wisely while supporting the doctors and hospitals who provide that care," Self said. "There will be discomfort that goes with this process, but the outcome of people paying more attention could be very positive. "
As consumers feel the pain of rising health care costs on their insurance premiums, they will be more inclined to take on greater responsibility for the choices they make - including lifestyle choices.
"People will be more willing to consider the impact of their own actions on the cost of health care," Self said.
One example of the kinds of customer/provider collaborations that Idaho health insurance companies envision is a community health plan targeting childhood obesity that Pacific Source has partnered with Treasure Valley Pediatrics to create through a grant from the Community Health Excellence Program.
"We are positioned quite well to get people to pay attention to health issues," said Self, "and to be a resource and a consumer advocate for the things that can affect access to and cost of health care. "
Fredriksen shares Self's perspective. As reform enactment, at least in the near term, drives health care premiums up, consumers will be forced to try and mitigate the impact through higher deductible plans.
"As people face higher deductibles they are going to care more about the best alternative at the best cost," Fredriksen said. "The role for insurance carriers is to help people take on more responsibility. "
The success of health insurance companies in playing this role, more than congressional or media histrionics, will shape the public perception of whether they are part of the solution, or part of the problem.
August 23, 2010
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