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Blue Shield, Boehner and ballooning deficits

By Josh Richman
Thursday, January 6th, 2011 at 3:23 pm in George Miller, healthcare reform, Henry Waxman, John Boehner, Pete Stark, U.S. House.

A trio of California House members expressed concern today about Blue Shield of California’s announcement of a significant increase – averaging 30 to 35 percent – in health insurance premiums for many of its policyholders, a hike the Democratic lawmakers say will force many Californians to choose between health insurance and daily necessities such as food and rent or mortgage payments.

(Yep, that would be the same Blue Shield of California that gave $15,000 to outgoing Gov. Arnold Schwarzenegger’s officeholder account late last week, days before he left office; it also gave $10,000 Monday to the California Republican Party and $3,568.83 to Democratic state Senate candidate Ted Lieu.)

Reps. Pete Stark, D-Fremont; George Miller, D-Martinez; and Henry Waxman, D-Los Angeles, said the increase underscores the danger of repealing last year’s health care reforms, as House Republicans have vowed to do.

“Thanks to health reform, for the first time these rate increases are completely transparent and posted on healthcare.gov,” Stark said in their news release. “With the increased resources from the health reform law, California can work with Blue Shield to mitigate these increases and protect consumers. Unfortunately Republicans want to immediately repeal these protections, and future reforms that will prevent rate increases like this in the future.”

Miller said Blue Shield’s announcement “just shows that the status quo is not working for California’s families.”

“And Republican repeal of health reform will only put big insurance companies in even greater control of Americans’ health care,” he continued. “The Affordable Care Act, when fully implemented, will ensure real competition and accountability so that families already stretched thin by health insurance costs can find relief. Repealing the health reform law poses a real danger to middle class families.”

The Dems noted Blue Shield clearly stated its proposed increases “cover a period of more than one year and have almost nothing to do with the federal health reform law. These rates reflect trends that were building long before health reform.” The insurer also noted health reform actually will help get costs under control in the future through initiatives that make health care more efficient, the lawmakers said.

(UPDATE @ 3:50 P.M.: Rep. John Garamendi, D-Walnut Grove, a former state Insurance Commissioner, got in on the act, too. “Today’s egregious rate hike by Blue Shield of California is further proof that we can’t trust the insurance industry to stand with consumers,” he said. “As we climb out of a deep recession, the insurance companies are kicking us back down. Fortunately, for rate increases over 10 percent, the 2010 health care reform allows the Federal government to review, question, and disclose facts to the public about the increase.”

“When Congress passed the Patient’s Bill of Rights last year, we instituted important reforms that are helping to rein in the worst abuses of the insurance industry. Next Wednesday, House Republicans will attempt to repeal these vital consumer protections,” he continued. “Even with the strong consumer protections found in the Patient’s Bill of Rights, insurers like Blue Shield are still exploiting patients for financial gain. This is an argument for more consumer protections, not less. House Republicans want to replace the Patient’s Bill of Rights with the Insurance Industry’s Right to Discriminate. Let’s not start the New Year by exposing consumers to new risks.”)

For more on today’s healthcare follies, follow me after the jump…

House Speaker John Boehner, R-Ohio; Majority Leader Eric Cantor, R-Va.; and several House committee chairmen released a report today called “ObamaCare: A Budget-Busting, Job-Killing Health Care Law” which they say “provides a compelling case for taking immediate action to repeal ObamaCare and replace it with reforms that will lower costs and protect jobs.”

“The evidence is clear: by raising taxes, imposing new mandates, and increasing uncertainty for employers and entrepreneurs, ObamaCare is already destroying jobs in this country,” Boehner said. “And it will continue to destroy jobs unless we do something about it. The report released today shows how the health care law is making it harder to end the job-killing spending binge that threatens our children’s future. When you look at it dollar by dollar, the numbers just don’t add up. This report presents a very sobering picture, and every lawmaker and taxpayer – no matter where you stand on this critical issue – should take a look at it.”

However, the nonpartisan Congressional Budget Office wrote to Boehner today with an analysis of the GOP’s repeal legislation, noting that it and the Joint Committee on Taxation’s staff last year had estimated the reforms would reduce budget deficits through 2019 and beyond, and “consequently, we expect that repealing that legislation would increase budget deficits” to the tune of $230 billion through 2021.

“Correspondingly, CBO estimates that enacting H.R. 2 would increase federal deficits in the decade after 2019 by an amount that is in a broad range around one-half percent of GDP, plus or minus the effects of technical and economic changes that CBO and JCT will include in the forthcoming estimate. For the decade beginning after 2021, the effect of H.R. 2 on federal deficits as a share of the economy would probably be somewhat larger,” the CBO wrote – a deficit explosion Stark estimated at more than $1.2 trillion.

A repeal also would leave about 32 million nonelderly people without health insurance in 2019, the CBO found, and could leave many Americans paying more for their insurance.

Boehner basically blew off the CBO’s analysis, leading Democrats and liberal bloggers to accuse Republicans of holding the CBO in esteem only when its analyses match their political agenda.

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  • Elwood

    Blue Shield says one of the reasons for the rate increase is increased costs of hospitals.

    And here’s a funny one:

    Another reason is the impending implementation of the miraculous cost saving Obamacare!

  • Elwood

    A free lunch ain’t really free.

    Adding 32 million people to health care and keeping slackers on their parents’ insurance until they’re 26 (why not 35 or 45?) comes with a cost.

    Those who have health insurance now must pay for this future miraculous increase.

  • Elwood

    Re: #1

    I was misinformed. I should know better than to ever believe TV news.

    Blue Shield says that the impending arrival of Obamacare has nothing to do with their rate increase.

  • John W

    Kudos to Elwood for #3. However, a couple of other points should be made. Yes, keeping “slackers” on their parents’ group coverage until 26 comes at a cost; but it’s a cost mostly paid for by the parents who choose to keep their kids on the coverage. The reason this is good policy is that “kids” in that age group are the least likely to have jobs that offer good group health insurance plans. This buys them more time to get established with either group coverage or by purchasing guaranteed issue individual coverage through the new insurance exchanges. All this reduces overall health care spending by keeping these people from seeking treatment through the highly expensive back door of the ER. As for adding 32 million people to health care, that also is a good thing if it keeps people out of the ER or keeps them from delaying diagnosis and treatment of “minor” conditions until they become very expensive major conditions. We can argue about how much we can afford to subsidize premiums for lower middle income people (too rich for Medicaid but too poor to pay full cost on their own), but adding 32 million people beats the consequences of excluding them.