Blue Cross/Blue Shield of NC has asked he state for an average 7 percent increase in premiums. Some comsumers, however, could see their rates increase by up to 30 percent, and a few will see a 50-percent hike. This comes just a week after the insurance company laid off 90 workers to cut costs.
The company is blaming it on health reform, but that’s just not true. Most of the provisions don’t even take effect until 2014. I don’t know the annual compensation package for Brad Wilson, the new CEO of BCBS NC, but total compensation for his predecessor, Bob Greczyn, was $4.07 million last year. The President and COO, James B. Wilson made $561,462 in salary and $1,237,921 in bonused. CAO and General Counsel Maureen K. O’Connor made $493,269 in salary and $815,717 in bonuses.
Blue Cross/Blue Shield is, by law, a nonprofit. They also provide almost all the individual policies in NC and a huge chunk of employer health coverage, plus thet administer the state workers’ plan. They are an effective monopoly here in North Carolina.
Wilson, in an interview with WFAE, an NPR station, said doctors are charging too much. But BCBS payscare providers a negitoated rate.
This happened a few years ago, but here’s an example of what negotiations are like:
I was covering health both as an issue and as business when BCBS entered negotiations with Mission Hospitals (then Mission St. Joseph Health Care System). I got press releases every week with quotes from Greczyn about how inefficient Mission was and how they charged more than any other similar hospital in the state, possibly even in the Southeast. Mission spokespeople told me BCBS was trying to reduce the reimbursement rates, although spokespeople could not offer me specifics because of the ongoing talks. It looked for awhile as though Mission would not be in the BCBS network.
Finally, they settled and signed a contract. A couple of months later, Greczyn was in Asheville for an event at the Chamber of Commerce. I brought along a few of the press releases just in case he wanted to talk about Mission. During his remarks, he praised Mission for its efficiency and low costs. It was the exact opposite of what he had been saying during the negotiations. After he spoke, I brought the press releases over to him and asked what he thought had turned Mission around so quickly and so completely. I showed him the quotes in the press releases and he just walked away.
Again, this wasn’t the current CEO; Greczyn has since retired. But this is the nature of the health insurance business. Perhaps if they had paid out less in lobbying fees to fight health care reform, they wouldn’t have to lay people off and raise prices even before the provisions of this weak law take effect.
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