qotd: The BlueCross BlueShield Association is privatizing Medicare

BlueCross BlueShield Association
April 24, 2015
Blue Cross and Blue Shield Companies to Launch Retiree Health Insurance
Exchange

Blue Cross and Blue Shield (BCBS) companies will launch a health
insurance exchange this summer that will support employers' efforts to
help retirees transition from group health benefits to individual
Medicare coverage that starts Jan. 1, 2016.

BCBS Marketplace will offer Blue Cross and Blue Shield Medicare
Supplement Insurance (Medigap), Medicare Advantage Plans and Medicare
Part D prescription drug coverage in more than 45 states and Washington,
D.C.

http://www.bcbs.com/healthcare-news/bcbsa/bcbs-companies-to-launch-retiree-health-insurance-exchange.html

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Comment by Don McCanne

The BlueCross BlueShield Association is a national federation of 37
independent, community-based and locally-operated Blue Cross and Blue
Shield companies that collectively provide health care coverage for
nearly 105 million members – one-in-three Americans. They now intend to
establish a health insurance exchange that will promote transition of
employer-sponsored plans to Blue Cross and Blue Shield Medicare
Supplement Insurance (Medigap), Medicare Advantage Plans and Medicare
Part D prescription drug coverage.

Some employers are already transitioning to private insurance exchanges
(similar to but separate from ACA exchanges), converting their
employer-sponsored plans into defined contribution plans. As employees
retire and become eligible for Medicare coverage, the BlueCross
BlueShield retiree health insurance exchange will simplify the
transition from employer sponsored group plans to individual Medicare
coverage, but doing it with private plans. Since employer-sponsored
plans are the largest sector of health care coverage, this transition
could cause a massive influx of plans into the private Medicare
insurance market.

The retiree exchanges will offer Medigap plans, Medicare Advantage plans
and Part D drug plans.

Medicare Advantage plans (Part C plans) are able to offer greater
benefits with minimal or no premiums, and thus they continue to grow in
popularity. Enrollees are not concerned that taxpayers are providing
greater subsidies for these plans, even if CMS is using accounting
gimmicks to do so. Plan beneficiaries will always place their own
interests above the collective interests of us all.

As Medicare Advantage enrollment is increasing, enrollment in Medigap
plans is declining. The Medigap premiums are relatively high considering
the limited benefits. The decline in Medigap enrollment may accelerate
even more once the Medigap plans are prohibited from covering Part B
deductibles (a provision of the recently enacted Medicare SGR fix).

Medicare Advantage plans frequently include the Medicare Part D drug
benefits, obviating the need to purchase a separate Part D plan as
Medigap enrollees would have to do if they wanted drug coverage.

You can see where this is headed. Employers will be enabling BlueCross
BlueShield to enroll retirees into the private BlueCross BlueShield
Medicare plans wherein the Medicare Advantage plans (Part C) will
experience preferential enrollment. Thus enrollment in the traditional
Medicare program (Part A and Part B) will decline substantially. Once
the private Medicare Advantage plans become the dominant player (and
they are well on their way already), the traditional Medicare program
will lose political support and will be converted to a chronically
underfunded welfare program, if it survives at all.

Although the establishment of the BlueCross BlueShield Medicare
exchanges will likely be lost in the fog of all of the innovative
changes taking place under the Affordable Care Act, they are coming.
They will be here in only eight months. As the political and policy
communities continue to fiddle with other aspects of implementing the
Affordable Care Act, the privatization of Medicare will have taken place
right before our eyes, and they do not even need Paul Ryan's premium
support vouchers to do it. (In fact, the Republicans just struck premium
support from the budget proposal they agreed to this week.)

Just try to stop this one.