Insurers have own ideas on coverage

Times Staff Writer

Big health plans share Gov. Arnold Schwarzenegger’s goal of trimming the ranks of the uninsured, but they have their own ideas about how to do it -- such as taxes on cigarettes and service charges on patients every time they visit a doctor.

Perhaps not surprisingly, none would limit premiums to make insurance more affordable.

Such details are likely to make it more difficult for Schwarzenegger to press his plan unveiled this month to offer everyone in California health insurance.

Blue Shield and Kaiser Permanente, both not-for-profits, broadly agree with Schwarzenegger’s goal of covering everyone. WellPoint Inc., the for-profit owner of Blue Cross of California, issued its own proposal to cover more children and poor adults but not everyone.


Don’t expect any endorsements from companies with the most to gain or lose until they see the fine print of Schwarzenegger’s plan.

“We’re encouraged by what we’ve seen so far,” said Kathleen McKenna, a Kaiser lobbyist in Sacramento. “Everybody’s anxious to see the details.”

Health plans have long wrestled with how to cover more people. Blue Shield Chief Executive Bruce Bodaken called for universal coverage, including mandates on employers to provide it and on individuals to buy it, four years ago. Yet before Schwarzenegger’s speech Jan. 8, universal coverage in California was widely perceived as unattainable.

Bodaken illustrated just how politically unrealistic universal coverage appeared just a day before Schwarzenegger’s speech. In a Jan. 7 opinion piece in the San Francisco Chronicle, Bodaken proposed insuring all workers in a plan that fell far short of universal coverage. He wasn’t abandoning his support for universal coverage, but he was indicating he was ready to start with something more politically pragmatic.

The next day, Schwarzenegger instantly shifted the debate from how to expand coverage to how to cover everyone.

“Naturally we’re enthusiastic about a plan that does achieve universal coverage,” said Blue Shield spokesman Tom Epstein. “The governor’s plan has changed the dynamic.”

A month before the governor unveiled his plan, another universal-coverage proponent, Kaiser CEO George Halvorson, described his ideas in the journal Health Affairs. His plan in many ways presaged the governor’s proposal. Halvorson would expand the current job-based insurance framework by requiring employers to cover workers or pay into a fund for the uninsured.

The same day the governor made his proposal, Blue Cross parent WellPoint issued a nationwide plan. The two differ in scope. The company sets a goal short of universal coverage, reaching about half of the 46 million uninsured Americans. It would do so mainly by loosening eligibility guidelines of existing state programs for children and low-income adults.

Jay M. Gellert, CEO of HealthNet Inc., a for-profit operator based in Woodland Hills, was involved in crafting a proposal for universal coverage released last November by America’s Health Insurance Plans, an industry group. That plan would rely on a mix of expanded government programs and tax credits for workers and their families to buy their own coverage.

The California Assn. of Health Underwriters, a trade group of insurance brokers, issued a plan last week for “shared responsibility,” a term the governor also uses. The brokers would start with enrolling everyone who is eligible in government aid programs, such as Medi-Cal and the state’s high-risk pool.

The brokers also would like to see more leeway for health plans to design less expensive coverage options for people who can’t afford what’s available now. Their plan does not get into costs or financing mechanisms.

WellPoint sees tobacco tariffs as the best source for expanding coverage. Blue Shield would require employers who don’t cover workers to pay into a pool to cover the uninsured. Kaiser’s Halvorson also floated a payroll levy and a healthcare services tax that patients would pay every time they stuck out their tongue and said, “Ah.”

Under the governor’s plan, employers who don’t cover workers and physicians and hospitals all would be required to chip in.

None of the health plans would finance expanded coverage by limiting premiums. And the governor is not proposing any direct premium regulation.

That may be one of the biggest rubs because consumer groups say they will fight a mandate on individuals to buy health insurance without protection from sky-high premiums.

Health plans say they can’t support the governor’s proposal that they cover everyone without a guarantee that coverage would be mandatory. Without a strong individual mandate, plan executives say, people would have no incentive to buy insurance until they got sick -- creating a risk pool dominated by the sick that would be doomed to fail.