BLUE CROSS LOBBIES AGAINST INSURANCE BILL

If the Missouri Legislature allows the state health insurance plan to allow small businesses and other groups in, the state could wind up picking up part of the tab, says the president and CEO of Alliance Blue Cross Blue Shield.

John A. O'Rourke said Thursday that a bill approved by the Missouri House of Representatives last month could prove a costly mistake for the Missouri Consolidated Health Care Plan.

The bill, sponsored by state Rep. Tim Harlan, D-Columbia, would allow small businesses to participate in the health care plan, which now represents state and municipal workers.

Alliance Blue Cross Blue Shield recently lost a court battle with Missouri Consolidated when a judge ruled the insurance firm had to honor its contract with the state health care plan.

Alliance Blue Cross Blue Shield wanted out of its contract, arguing Missouri Consolidated had admitted too many high-risk individuals into the insurance pool.

With Harlan's bill, there's a potential for thousands more small businesses, farmers and other individuals to be admitted to the group, which includes state employees, school districts and municipal entities such as cities, counties and levee districts.

Alliance Blue Cross Blue Shield is lobbying against Harlan's bill.

"As this program expands and as the public entities and potential small businesses enter this thing, they're going to enter into it with the expectation that they're going to get the lowest premium possible," O'Rourke said.

But Alliance Blue Cross Blue Shield has suffered $30 million in losses on its contract with Missouri Consolidated, and other managed care companies won't fare any better on the contract, he said.

"There will be a judgment day and it will be at the end of the year 2,000 (when the contract ends) and all these businesses are going to say, we can't continue to take losses like this," O'Rourke said.

If more high-risk individuals are admitted to the pool, claims costs will increase, he said, and managed care companies won't be able to cover the added costs.

"Most of the managed care entities are likely to pull out and the question is, what does the state do? They're going to have to subsidize the program," O'Rourke said.

Alliance Blue Cross Blue Shield may have lost the court case, he said, but it is winning its argument that "fiscal soundness" is the key issue in deciding how to administer Missouri Consolidated's coverage and contracts.

Missouri Consolidated is a buying pool for health care coverage, based on the theory that large, single group individuals be able to get lower premium rates than several, smaller groups.

Randy Ressel, vice president of sales for Alliance Blue Cross Blue Shield, said there are some "economies of scale" in making the group larger, but a bigger group means more people will be making claims.

Ressel said that 80 cents of every dollar paid for premiums goes to cover claims costs.

"What in this bill does anything to reduce the cost of health care in Missouri? Nothing," he said.

O'Rourke and Ressel visited Cape Girardeau Thursday to mark the first anniversary of the opening of Alliance Blue Cross Blue Shield's claims service center on Siemers Drive.

The center employs 230 people and has a payroll of $6.25 million.

Karen Brobeck, site manager of the Cape Girardeau center, said the center processes 90,000 claims monthly, handles service calls for all contracted providers in the state and does the billing for the entire state.

Starting July 1, Alliance Blue Cross Blue Shield will begin offering BlueCard, a new network service, to members participating in its Alliance PPO product.

With the service, members will be able to receive treatment at their local discounted rate from contracted providers nationally.

Ressel said Alliance Blue Cross Blue Shield is marketing its Alliance PPO product in Southeast Missouri.

HealthNet Blue, a point-of-service HMO, will remain a viable product, Ressel said.

The product was originally marketed through MedAmerica HealthNet, Inc., which went bankrupt earlier this year.

Alliance Blue Cross Blue Shield contracted directly with the doctors and hospitals in the MedAmerica HealthNet network to continue offering the product.

More and more managed care products are available in the region, said O'Rourke.