BlueCross BlueShield is flexing its muscles, and its nearly monopolistic hold on Mississippi’s insurance market could allow it to upend state health care, shutter already scarce hospitals, force patients to travel long distances, pay more or receive substandard care.
It appears time for state government, which helped BCBS achieve its catbird seat atop the health insurance market here, to step in. Lawmakers are holding an initial hearing on the issue Monday. I suspect it will be a gut-check for Mississippi politicians, whether they’re willing to tackle the mighty BCBS, which, by the way, administers the state government health care plan.
BCBS and numerous hospitals have been at odds for years, with hospitals saying the insurer wasn’t paying them what it should for services and that it was using its huge market share (81 percent, according to the Kaiser Foundation) to strong arm them.
Health Management Associates, which runs 10 hospitals in Mississippi, sued BCBS in June, claiming it had been underpaid $16 million. In response, BCBS canceled HMA’s contracts starting Aug. 31. This means patients would have to pay large, out-of-pocket costs to use those hospitals. HMA is temporarily paying the difference for patients while the fight continues.....
But BCBS got where it is by having nonprofit, tax-exempt status from 1948 to 1995. Private companies couldn’t compete, and BCBS built up a market share and bankroll before it changed to for-profit status and state insurance deregulation that still makes it hard for others to compete. Mississippi has one of the least competitive insurance markets in the U.S
BCBS appears to be becoming the tail that wags the dog. No need for lawmakers or insurance commissioners to set policy. BCBS will tell everybody how it’s going to work.
It’s also gut check time for state Insurance Commissioner Mike Chaney, who has reportedly indicated he’s powerless to step in... Rest of the article
Interesting stuff and the rest of the column is worth reading.