Blue Cross and Blue Shield avoid political fray of health care debate

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(Host) Vermont’s major health insurance company is opposed to a Republican plan to tax insurance premiums to cover health care for the uninsured. Blue Cross and Blue Shield of Vermont also wants to stay out of the debate over a Democratic plan to provide universal health coverage.

VPR’s John Dillon reports:

(Dillon) Health care is at the center of this year’s gubernatorial race. But the state’s main health insurance company is trying to stay away from politics. As a non-profit, Blue Cross and Blue Shield of Vermont is now exempt from a state tax on health insurance premiums.

Governor Jim Douglas wants to extend the tax to Blue Cross and use the money to subsidize health insurance for low and middle income people. Blue Cross is leery of the proposal. Vice President Kevin Goddard says the administration’s tax plan would miss a large part of the health insurance market, namely government funded health care and large companies in Vermont that are self-insured. According to Goddard, the premium tax would fall unfairly on small businesses.

(Goddard) “On a policy side if you use a premium tax to raise money to subsidize health coverage for some, it really raises those revenues from a relatively small part of the population. And that part of the population is generally small businesses.”

(Dillon) The Democratic proposal for health care would also affect Blue Cross. Gubernatorial candidate Peter Clavelle wants to extend coverage to all Vermonters by collecting $90 million from health insurance companies. Republicans have branded it a big, new tax increase. But Clavelle says his plan would recapture money that’s already spent on health care and end what’s called the cost shift. That’s the money that’s now built into premiums and is used to cover the costs of people without insurance.

Goddard from Blue Cross said he hasn’t reviewed the Clavelle proposal and doesn’t want to put his company into the middle of a political debate.

(Goddard) “We know that the cost shift goes into the premiums of every one of our customers, there’s no doubt about that. How capturing the cost shift from uncompensated care would work, whether it would be sufficient you know to lower premiums enough to provide everyone with health insurance, I have not seen the analysis that’s behind that.”

(Dillon) Blue Cross also reports that it’s recovered from financial troubles that it experienced several years ago. Goddard said the company has built up its reserves, and improved customer service.

For Vermont Public Radio, I’m John Dillon in Montpelier.

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