Morgan Kendrick is president of Blue Cross and Blue Shield of Georgia, the state's largest insurer. He recently spoke by phone with AJC staff writers Carrie Teegardin and Misty Williams about the Affordable Care Act's impact on his company and the state. This is an edited transcript of their conversation.
Q: With the major elements of the ACA close to being implemented, how do you feel about the future for your industry?
A: The intent of the law is to offer and broaden the scope and breadth of coverage to as many Georgians as you possibly can. Because we have a large population of uninsured in Georgia and we have a large subsidy-eligible population, it creates a unique opportunity for more to be covered. I am optimistic that this is not going to be an overly negative thing for the state of Georgia as it relates to being able to offer coverage.
Q: Will health plans purchased by individuals be more expensive in 2014?
A: There are a couple of aspects converging here in 2014. It’s not just the exchange and the exchange-related products. It’s the whole regulatory environment that is shifting around how we price business. If you think about the individual market, no longer can you underwrite based on medical condition or on gender. It’s family composition, it’s geography, it’s tobacco use and it’s age. At a macro level, I am not expecting an egregious delta upward in what these costs would look like on an exchange or post-ACA. I do think you are going to see certain segments that are going to see price increases and certain segments that are going to see price decreases simply by looking at the math of what the law requires in pricing products. Younger age groups and individuals will pay slightly more or more and then older ages will pay less but the — but the net will be the same.
Q: What are some of the changes on the horizon?
A: We are where we are with ACA and as an industry because the services are unaffordable to many. I think there are a couple of things that aren’t necessarily addressed as part of the law that we have to really focus on as an industry and as a society. It’s around shifting the financing mechanism from one paying for volume to one paying for value in how we pay for the services.
It’s certainly our intent to have a full, robust network and everybody has access to any services they need in any part of the state but [choices of doctors and hospitals] may look and feel less broad. If you have a broad network that costs X, I think we can all say, “Right now X is unaffordable, so you have to get Y. How do you get to Y?” You narrow the actual choices of facilities, providers. It’s not terribly dissimilar to back in the HMO days. A narrower network is going to bring costs down.
Q: What about the uninsured in Georgia?
A: We’re trying to get the 1.8 million into the insured pool, which is the whole end game here by ACA. We need to get them to buy. I don’t feel these penalties [to be assessed against people who don’t get insurance] are really a big push, so we have to create something that’s more cost-effective. They’re clearly making a decision with their own money not to. You have to create a product that when you take the subsidies and add their own dollars, when you add the two together, they have to buy something.
Q: How else will insurers try to control costs?
A: We know 75 percent of our health care dollars is spent on chronic illness and 70 percent of the 75 could be prevented with lifestyle choice changes. The health status of the state of Georgia, we also know where we are on juvenile obesity. Those things are driven by personal accountability and choices. How can we advance and work with our customers to make better choices? By reducing the demand for health care and reducing the utilization you’re reducing cost itself.
About the Author
