SARA ISELINthe president and chief executive officer of the state’s largest health insurer, says rising health care costs could be another reason Massachusetts is at risk of losing its competitive edge.
Iselin, who rejoined the Massachusetts non-profit Blue Cross Blue Shield the following January a decade working elsewhere, noticed a change. She said 15 percent of state residents had high-deductible health plans when she left; now, 43 percent do.
ON The codecast with John McDonough of Harvard’s TH Chan School of Public Health and Paul Hattis of the Lown Institute, he rattled off several other indicators that suggest the heavy cost burden on Massachusetts residents.
We have always been a high-cost healthcare state, he said. But this is really starting to feel different. I think we’re entering a period of growing tension between what our employers and households can afford on the one hand, I mean is real, and the cost pressures and challenges facing our suppliers on the other. It is our role as a health plan to find the right balance. But I think this is a particularly challenging time that we’re heading into.
He said the stakes are high and called on everyone in the industry to work together to address the issue. If we’re going to continue to compete as a state, we have to nail this, she said.
Noting that there are limits to what the private market can do on its own, Iselin said state government must play a role. He especially advocated giving the Health Policy Commission more power to hold companies accountable for failure to meet the state’s cost-control benchmark.
Iselin said health insurance plans are already held accountable through minimum loss ratios, which require insurers to spend a minimal percentage of their premium dollars on medical claims and limit how much can go for costs and administrative expenses. . Failure to meet minimum loss ratios can trigger discounts for customers. He said a similar level of responsibility should apply to other players in health care.
The Blue Cross executive also expressed concern about the rise of for-profit national health insurers. He said companies often sidestep state-level regulations, tend to be less involved in state matters because of their national focus (they just aren’t at the table in the same way as local players), and use profits from their other subsidiaries (the own pharmaceutical benefit managers) to grow their health insurance businesses.
I don’t mean they are predatory pricing. I don’t want to go that far, she said. But I think it’s reasonable to really ask ourselves is how they price in any given market that reflects their underlying costs in that market. This is something we need to be aware of and look at.
Iselin assured McDonough and Hattis that Blue Cross Blue Shield of Massachusetts will not relinquish its nonprofit status. Not on my watch, she said. We are committed to remaining non-profit. It’s important to me personally.
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