Health Insurance Articles
Why Blueshield Has Been Removed From the California High-risk Health Insurance Pool
2009-10-28
The state of California has decided to cancel its contract with Blue Shield, one of the largest nonprofit healthcare plans in the state. Blue Shield has been a major player in the state's high-risk medical insurance pool, until recently when enrollment fell to less than 80 participants due to continued premium increases. The Major Risk Medical Insurance Program, or MRMIP, placed Blue Shield on notice in 2008 citing concerns about their premiums continuing to be at a "level far higher" than high-risk premiums at other major health insurance. A recent report revealed that individual policies written under Blue Shield were anywhere between 1.5 and 3 times higher than the other healthcare providers in the program. Consumer advocates have raised questions about the nonprofit insurer's true commitment to state funded programs benefiting those with pre-existing conditions.
The MRMIP is a state backed program that insures nearly 7,000 Californians previously classified as uninsurable due to pre-existing conditions. Through this program, such individuals have the opportunity to purchase health insurance coverage from private insurance companies. These policies offer comprehensive health insurance with premiums that are typically only 25 percent higher than comparable policies for those without pre-existing conditions. The state has an agreement to reimburse the health insurance companies for any losses that may occur. The Los Angeles Times reported that, regardless of state backing, Blue Shield's premiums have been significantly higher than the two alternative private healthcare companies that participate in the program, Anthem Blue Cross of California and Kaiser Permanente.
MRMIP officials have said that the top priority of the high-risk pool is to see that otherwise uninsurable Californians have fair and affordable choices for their healthcare coverage. They determined that Blue Shield's final offer was not acceptable, and that the health insurance giant could no longer provide a good value for the state's subscribers. As a result, California decided not to renew their contract with the company. The current Blue Shield enrollees will be able to stay in the MRMIP program with other health insurance providers. The state is confident that these policyholders will receive the care that they need at an affordable price. Blue Shield coverage will remain in effect until the new policies are effective on January 1, 2010.
While Blue Shield was unable to respond directly to inquiries regarding the non-renewal of their contract, the insurer did release a statement. They indicated that in their many years of participation in the MRMIP, Blue Shield's rates remained in compliance with the laws and regulations set by the state. Blue Shield maintains that the state of California refused to renew their contract despite the fact that the company reduced health insurance coverage rates at the request of the MRMIP board.
