Blue Cross’ ‘fix’ may not benefit uninsured

This is Cover the Uninsured Week, which is a good time to remind ourselves of the shameful statistic that 47 million Americans -- 16% of the population -- lack health insurance.

It’s also a good chance to take a closer look at recent print, radio and billboard ads from our friends at Blue Cross, California’s largest for-profit health insurer, touting the company’s new name: Anthem Blue Cross.

One ad includes a manifesto of sorts signed by Leslie Margolin, Anthem Blue Cross’ new president, and Angela Braly, chief executive of parent company WellPoint Inc., which runs Blue Cross programs in 14 states. Anthem Inc. acquired WellPoint for $16.4 billion in 2004 and adopted the Wellpoint name.

The ad pledges that Anthem Blue Cross, with 8.4 million members, will “fix what’s broken without breaking what already works.”

It says the company is “committed to helping improve the health of our members throughout the state and the quality and affordability of the care delivered to them.”

It also says Anthem Blue Cross is “committed to insuring the uninsured and providing access to healthcare services for California’s most vulnerable families and children.”

In case the scope of this was lost on anyone, the company goes on to declare that its goal is nothing less than “to transform America’s healthcare system” and to “earn and deserve your trust.”

That’s a pretty impressive agenda for an insurer that this month was accused of widespread fraud in a $1-billion lawsuit filed by Los Angeles City Atty. Rocky Delgadillo, who alleged that Anthem Blue Cross routinely reneged on coverage for people diagnosed with serious (and costly) ailments.

The company denies the allegations.

So how does Anthem Blue Cross plan to achieve its lofty goals? That’s something the ads don’t make clear.

Kate Quinn, WellPoint’s vice president of market and brand strategy, told me that Anthem Blue Cross has a variety of programs to make healthcare more affordable and to insure the uninsured. But she was unable to provide much in the way of specifics.

“It’s not a one-size-fits-all answer,” Quinn said.

She did say, though, that health insurers aren’t part of the problem -- they’re part of the solution, just as consumers know that they share responsibility for improving healthcare in this country.

“Consumers recognize that there are many problems with the healthcare system,” she said. “They want to be part of the solution as much as we want to be part of the solution.”

She wasn’t specific about what consumers could do but said people need to make better healthcare decisions. Maybe that means you should deal with those chest pains yourself, rather than taking up the time of some high-paid physician.

My sense is that consumers think our healthcare system is spinning out of control, and that they’re powerless to do anything about it while entrenched interests -- like the insurance and pharmaceutical industries -- fight to preserve the status quo.

A Field Poll released this week found that 59% of California voters say they’re very concerned about being able to pay for all the costs associated with a major illness or injury, up from 48% in 2006.

A similar number of poll respondents say they worry that their insurance provider will cancel or severely limit their coverage if they need it because of a health problem.

Cynics -- not me, of course -- might wonder how dedicated a company like Anthem Blue Cross is to a wholesale transformation of the healthcare system when it’s doing so well under the current regime.

Indianapolis-based WellPoint pocketed $3.3 billion in profit last year, up 8% from a year before.

A 2006 survey by the California Medical Assn. found Blue Cross spent about 79 cents on patient care for every dollar it received in premiums. That was the lowest of any major health insurer in the state and resulted in the largest profit margin (10%).

WellPoint reported this month that it paid about 85 cents per premium dollar on healthcare for all its 35.4 million members nationwide in the most recent quarter.

To placate shareholders, the company said it has “implemented medical management initiatives” and is “adjusting benefits and pricing” to lower this figure.

According to the Kaiser Family Foundation, the average premium for family health coverage provided through the workplace was $12,106 last year, a 78% rise since 2001 and way more than the 17% rise in inflation in the same period.

Not surprisingly, these increasingly unaffordable premiums contributed to the number of uninsured rising from 41.2 million in 2001 to 47 million today.

Anthem Blue Cross has what it calls an Uninsured Action Plan, which it says would extend coverage to the nearly 7 million Californians without health insurance.

The plan includes expanding public programs like Medi-Cal, which would benefit private insurers by removing some of the highest-risk people from the coverage pool. It also would seek subsidies for lower-income people to help them pay for premiums.

Funding would come primarily from taxpayer dollars.

There are alternatives, such as legislation proposed by state Sen. Sheila Kuehl (D-Santa Monica) that would create a government-run insurance system for all Californians, or limits on increases in premiums or an insurer’s ability to deny coverage.

I suspect we won’t be hearing much about these notions from Anthem Blue Cross as the company proceeds with its efforts to transform the healthcare system (read: expand its customer base at taxpayers’ expense).

“People are not looking for the government to step in and take over healthcare,” Quinn said. “That’s not what people want.”

That, of course, is a red herring. No one is proposing a government takeover of hospitals and medical clinics.

On the other hand, are people really opposed to the idea that our government, just like the governments of every other industrialized democracy worldwide, could play a role in guaranteeing health insurance for everyone?

California is as good a place as any to test this idea. If a government-run insurance program fails to provide universal coverage and cut healthcare costs, so be it.

But if such a program does accomplish these goals -- and most experts say it would -- it could then be rolled out state by state until the entire nation enjoyed reasonably priced health insurance.

Sixteen percent of Americans lack coverage under our current system, and the percentage grows larger each year.

For-profit insurers like Anthem Blue Cross would call that a business opportunity. Others would call it a tragedy.

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