In 2009 Tom Bowser had cautious optimism that health care insurers could work with the Obama administration to devise a plan to provide affordable health insurance for 47 million uninsured Americans.
Then CEO of Blue Cross and Blue Shield of Kansas City, Bowser also was chairman of the Blue Cross and Blue Shield Association, representing 39 plans nationally. As such, he made monthly trips to Washington to provide insurance company input during crafting of the Affordable Care Act.
Bowser retired from Blue KC at the end of 2010, and has watched from a distance as his successor CEOs have wrestled with Affordable Care Act participation. On Wednesday, Blue KC announced it will won’t offer 2018 plans on the federal health care exchange known as Obamacare.
Blue KC said it has lost more than $100 million since its exchange plans were rolled out in 2014.
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“The villain to be shot depends on your politics,” Bowser said. But the nation’s complex health issues “do not lend themselves to purely Republican or Democratic solutions.”
Bowser, who spoke with The Star from where he now lives in Jackson Hole, Wyo., said he was proud that the not-for-profit Blue KC had stuck with the exchange “when most of our investor-owned competitors have headed for the hills.”
As a not-for-profit insurer, Blue KC doesn’t pay dividends to shareholders. Rather, if income exceeds expenses, the profits are put in reserve to offset losses in future periods.
According to current Blue KC CEO Danette Wilson, the recent losses were unsustainable, and sticking with the exchange no longer was a viable option.
“This decision is necessary at this time, but we’ll continue to work with federal and state legislators to identify solutions that will stabilize the individual market and bring costs down for our members, the community and Blue KC,” Wilson said.
“We were pleased that the Obama administration was trying to build on the private insurance system as opposed to going to a Medicare for everyone plan,” Bowser said of his work in 2009. “But that step was enormously complicated, and it needs a major overhaul with both Republicans and Democrats at the table.
“Unfortunately, that’s totally absent in Congress these days, not just limited to health care but in banking, energy and other fields. We need to outgrow the partisan petulance that’s gripping us these days.”
Bowser pointed to several other factors contributing to an unsustainable insurance system:
▪ The failure of 19 states to expand their Medicaid programs — Missouri and Kansas among them. Lack of participation in a key element of the act nearly assured failure of the Affordable Care Act’s aim to cover more of the nation’s uninsured.
▪ The lack of expected coverage enrollment by younger people who might have offset the higher costs of older, more expensive health care users. The act limited insurers to use fewer “rating bands” to assess premium costs, effectively loading some of older people’s higher costs onto younger customers.
▪ Sporadic enrollment by some customers. Some people bought plans when they needed expensive medical care, such as hip replacements, but then stopped participation after their insurer paid their claims.
▪ The mandate that everyone obtain coverage never jelled. Without participation from well people, insurers couldn’t afford the act’s mandate to cover all those with pre-existing conditions who previously were denied coverage because of their expense.
▪ Surging pharmaceutical costs. Some insurers have reported paying more for drugs than for hospital inpatient services.
Bowser said what comes next for the American health care system requires compromise in Congress. But he doubts that will be the cure.
“We need to get people to be more responsible for their health,” Bowser said. “Some of this cost spiral isn’t the fault of the health care system. Many Americans do a pretty lousy way of taking care of themselves. That has to change.”
Blue KC customers with exchange policies can obtain information online at BlueKCAnswers.com or by calling 1-888-737-7086. Affected Blue KC members will be notified via mail by Blue KC by July 1, the insurer said.