BlueCross BlueShield withdraws from Medicaid managed care program


#1

From the Buffalo News:

Some 53,000 Medicaid recipients in the region, including nearly 29,000 in Erie County, will have to look for new insurance coverage this fall because BlueCross BlueShield of Western New York is withdrawing from the Medicaid managed care program.

The insurer, which plans to publicly announce its withdrawal from the program today, informed government officials of the move Thursday in a memo that was obtained by The Buffalo News.

“We have incurred losses in excess of $40 million over the past three years in these programs,” Don Ingalls, the insurer’s vice president of state and federal relations, said in the memo. “We have a 20+ year history of supporting these programs and members; however, we cannot continue to do so as the losses ultimately have been funded by other lines of business.”

The move means that Medicaid managed care recipients in Erie, Chautauqua, Cattaraugus, Orleans, Wyoming and Allegany counties will have to move to another insurance provider by Oct. 31. BlueCross BlueShield said it would notify Medicaid clients of the withdrawal by the end of August, giving them two months to make the switch.

First, I am sorry for any of you who are negatively impacted by this measure.

The Patient Protection and Affordable Care Act requires that insurance companies maintain a “medical loss ratio” of 85% for large group markets. This means that for every premium dollar, 85 cents must be paid out to medical providers. Any lower expense ratio would have to be refunded to policy holders.

So, according to this news article, Blue Cross Blue Shield (BCBS) was taking excess funds from other insurance groups and funneling into the Medicaid group. It appears that BCBS was no longer able to do this after Obamacare was implemented and so the deficiencies in the Medicaid program were exposed. Since they were no longer able to protect the insurance program for the poor from its inherent faults, they had no choice but to get out of that market.

Apparently, according to the news article, there are three other providers who do Medicaid for Western New York. Sadly, they are reporting financial difficulties with the Medicaid program as well.

My Comment

New York should not allow these insurance programs to get away with it. Money should never be an issue for providing health care, particularly to the most poor and vulnerable among us. If these insurance companies must operate at a loss, so be it. Operating at a loss is no excuse.


#2

Insurance companies are not charities. It is the government’s responsibility to make sure that the poor get coverage, not the insurance companies.


#3

Operating any business at a loss for a certain period of time will put that business out of business, no matter what product or service you sell.

But this racket is a racket.

news.investors.com/ibd-editorials-obama-care/061114-704327-obamacare-could-overpay-152-billion-in-subsidies.htm

latimes.com/nation/politics/la-na-obamacare-subsidies-20140617-story.html

Peace,
Ed


#4

Well, I have it on good authority from Catholics who are far better than me (just ask them) that money should never be a factor when providing health care. That if you consider such factors as fiduciary responsibilities, you are being greedy.

So, since they are better Catholics than I am (just ask them), then maybe they are 100% right and that these companies should consider it a privilege and operate at a loss for the foreseeable future. When there is no longer money in their accounts, then the banks should just honor their checks. When they can’t pay their employees, the employees should consider it a privilege to provide those services and work for free. And, in the case of for-profit publicly traded insurance companies, their investors, like public sector union retirement funds, should just eat the losses.

After all, it’s for the common good, right?


#5

You are right, money should never be an issue for caring for the sick.

Blue Cross and Blue Shield, at least where I live, are among the most expensive companies out there, and the worst for what they will and will not cover. And no one needs to tell me about their losses. They don’t operate on any real loss. Never have. It is just in how you manipulate the numbers and who they want to make rich.

The only people I feel sorry for are the sick and poor, who seem to be “bottom of the barrel” concerns for companies like this one. As far as I am concerned we should get rid of all insurance companies. They have been ripping the people off for years. And I don’t just mean medical insurance. I mean car, house, all of it. It is the biggest rip off going in this country.

There are other ways to insure people’s cars and homes. Private insurance companies are not it, because all they care about is their bottom line. And no I am not a Socialist. There are just some things that need to be provided for all people, and at reasonable prices. Insurance and health care are among those things.


#6

No business can actually operate at a loss. It is an excuse because operating at a loss = the end of the business.

This was one of the fatal flaws of the ACA. We certainly needed health care reform. But the ACA did not address some of the interlocking pieces of the puzzle, including the role of the insurance industry. Now, this was likely by design since failure of the insurance industry will ultimately result in a single payer (the government) system. But it will probably be a decade or more before that will all shake out. These Medicaid recipients are the “collataral damage” that the administration is willing to have. They will be no better (or worse) served by no BC/BS than by a BC/BS that doesn’t administer Medicaid.


#7

Well since insurance companies do not provide healthcare, they only pay for it, this doesn’t really apply does it? :shrug:

Sarcastic much?

I think you might have some misunderstandings about how health insurance companies are set up. This is from BCBS:

The Blue Cross and Blue Shield Association is a national federation of 37 independent, community-based and locally operated Blue Cross® and Blue Shield® companies. The Association owns and manages the Blue Cross and Blue Shield trademarks and names in more than 170 countries and territories around the world. The Association grants licenses to independent companies to use the trademarks and names in exclusive geographic areas.

bcbs.com/about-the-association/

So an insurance company operating under the name BCBS (usually BCBS of MN or Illinois, etc) could potentially run at a loss. But this article isn’t saying the company is running at a loss, merely that the medicaid line of business was running at a loss and it can no longer do so, potentially because of restrictions in the ACA (though there have always been restrictions on health insurers revenues and profits).


#8

Who, moi? :blush:


#9

Um, Obamacare is designed to do this. The objective is not to have insurance but a single payer system; that being the government. The next stage of the game he will begin blaming the insurance companies and point out how they are really the one’s “hurting the little guy”, then come up with draconian and fiscally unsustainable laws to get them out of the medical insurance business.


#10

LOL, well I wasn’t sure at first. :wink:


#11

How much money have those who insist on companies operating at a loss given to sick people?

I eagerly await the responses :popcorn:


#12

There are other ways to insure people’s cars and homes.

:rolleyes:

Let me guess: The United States Federal Government.

“Yes We Can!!!”

:rotfl:

Private insurance companies are not it, because all they care about is their bottom line.

And by doing so will provide competent, competitive services in the free market. If they don’t, they go out of business and the customer, not the government decides.

And no I am not a Socialist.

I would hope not. Socialism is explicitly against Catholic teaching.

There are just some things that need to be provided for all people, and at reasonable prices. Insurance and health care are among those things.

Which could be done if the Democrat Party would stop holding the health care industry hostage to get votes in order to advance their wicked agenda. :yup:

The private sector of charity would do so much better than the government.

But, as I keep implying, that means folks are going to have to take off their :cool: kid hats at the voting booth and act like adults at the ballot box.

OR, the electorate can continue to suffer the consequences. :shrug:


#13

You do have a point here. The whole morality factor should be examined when you have insurance companies, employers, etc deciding whom to accept or decline for needed healthcare treatment. A case could also be made that these are the entities that made healthcare so expensive in the first place.


#14

I would not attribute that so much to a nefarious purpose of a particular company or not (in fact, there are a number of health insurance companies that are non-profit…and much of the health insurance out there is funded by the government, e.g., Medicare, CHAMPVA, Tricare). But, you are absolutely right in that the insurance “system” has caused prices, in general, to skyrocket over the past decades.

I’ve talked about that at length before over the years only to be berated by people who don’t have the wherewithal to understand it, so I won’t bother going into detail again. But I do agree that any centralized system (where the actual consumers of the goods/services of that system are not directly involved with economic decision-making in that system) is bound to be more expensive in the long run.


#15

I agree 100%. We should just bite the bullet and nationalize all healthcare.


#16

It is amazing to me how many people do not understand the basics of insurance. Insurance is not a savings account or an investment. Insurance is risk sharing that requires a third party to assume risk, and no one takes on the risk of someone else without being paid for it. For many people that risk sharing is worth the cost, for others it is not, but it is never free.

States regulate insurance primarily to make sure the insurance company can pay its claims under its contracts. If the companies operate at a loss, they will not be able to pay claims and lots of people get hurt.

If you want to be a “good” Christian, albeit a broke Christian, go to your local buy here-pay here used car lot and offer to co-sign for all the people with bad credit who want to buy a car they can’t afford. That would be free insurance for the poor and it would not cost you anything IF all those people honor their contracts. The downside would be to encourage irresponsible behavior and your ability to support your own family would end.


#17

Actually this is a pretty good analogy. I think Medi-share operates on that principle, with perhaps the added incentive of trying to keep the costs down, negotiating with the doctor and hospitals directly whenever possible.


#18

Good analogy.


#19

It seems that anytime a third party is paying the bills, costs will rise.


#20

And the more administration, including commissions, the higher the costs generally.


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