We are close to fixing our broken healthcare system—closer than ever before in history— but achieving that goal is being threatened by members of Congress who are backing away from supporting reforms that would ensure universal health coverage and affordability.
Requiring everyone to have health insurance—with appropriate subsidies for our poorest citizens— is essential to making healthcare reform viable. Without that requirement, people will buy coverage when they need it and cancel it when they don’t.
This will dramatically increase premiums for health coverage, leave millions uninsured and cause overall healthcare costs to rise. In the end, reform will have been an expensive and futile exercise with no meaningful and lasting benefit.
That is unacceptable. This is our last chance to get healthcare reform right—and Congress must act now.
Months ago, the health insurance industry pledged to make healthcare coverage accessible to everyone— without regard for pre-existing conditions or health status. But legislation moving through Congress is setting the stage for failure by essentially allowing people to jump in and out of the system, driving up healthcare costs for everyone.
A new report by the actuarial firm Oliver Wyman—commissioned by BlueCross and Blue Shield—demonstrates that requiring everyone to have health insurance is a key factor to improving the affordability of coverage and reducing the number of uninsured in our country. The analysis shows that without an effective mechanism requiring all citizens to purchase and maintain insurance, premiums would jump as much as 50 percent in the individual market. That would translate into average annual premiums for new purchasers that are $1,500 higher for individual coverage and $3,300 more for family coverage, five years after reform is enacted [Editor’s Note: Subsidies should offset that increase for some].The impact will vary significantly by state. For two-thirds of the country, costs would increase by 60–73 percent compared to today.
The report shows that the premium increases will stem largely from the fact that millions of people—particularly the young and healthy—will choose to go without coverage. Moreover, sick people will buy coverage only when they need it.
And the adverse impact of a weak mandate will also affect those purchasing coverage in the small group market. The analysis finds that costs for small business, on average, for new purchasers would be 19 percent higher than today. As a result, the number of small employers offering coverage will decline, leading to the loss of small employer coverage for 2.5 million people within five years.
BlueCross and Blue Shield remains steadfast in our commitment to true healthcare reform that builds on the employer-based system to improve the quality and safety of care, rein in costs and extend health coverage to everyone. In that spirit, we continue to strongly support the vast majority of what has been outlined in the healthcare reform proposals pending in Congress—but we must fix the areas that are counterproductive to healthcare reform. The Oliver Wyman analysis shows the very real adverse consequences of including some insurance reforms without others.
We urge Congress to return to the basic tenets President Obama outlined in his original vision for healthcare reform: security and stability for those who have health insurance and affordable insurance for those who do not.
With true universal coverage in sight, it would be a tragic mistake for members of Congress to jeopardize our last chance to get healthcare reform right for America
Scott P. Serota is president and CEO of the Blue Cross and Blue Shield Association.