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 ALEXANDRIA, Va., July 20 /PRNewswire/ -- George Scandlen, executive director, The Council for Affordable Health Insurance, issued the following open letter to the members of the legislature of the state of New York:
 The shocking revelations about double sets of books, "gross mismanagement," and wasteful spending of the Empire Blues have called into question much of what has been billed as "insurance reform" in New York.
 Over the years, Empire has bullied the state legislature into passing laws that have created an entity that is too big to fail and to powerful to regulate. These have included massive hospital discounts (or "differentials"), tax exemptions, and most recently, legislation that effectively drove most of Empire's more efficient competitors out of the state.
 These laws have created a Frankenstein's monster that is out of control and terrorizing the people of New York with massive rate increases, lousy service, and a complete indifference to the needs of the marketplace.
 Like any large, indifferent monopoly, the answer lies not in manufacturing more futile regulations, more bail-outs, or concentrating yet more power in Empire's hands, but in encouraging more competition, more variety, more choice, and lower prices.
 The big question is how to protect the interests of the people of New York while moving from a near-monopoly to a competitive situation. Below is a six-step process that could do just that:
 1. Create a high-risk pool for the medically uninsurable. Twenty- seven states have enacted these already. They serve as insurers of last resort for people who cannot obtain coverage in the private market. They are explicitly subsidized, not with hidden cost shifts to a small number of insurance buyers, but with a clear, manageable appropriation from the state.
 2. Prevent any insurer from selectively canceling coverage or failing to renew coverage due to the health status of an insured. These people have paid their premiums in good faith, and deserve to be protected. If they find they can do better elsewhere and choose to drop their coverage, more power to them. But that should be their decision, no the insurance company's.
 3. Require the Empire Blues to pay premium taxes just like any other insurance company. In fact, this sum could be dedicated to the high-risk pool and go a long way towards helping people with chronic illnesses secure meaningful insurance coverage.
 4. Eliminate the special hospital discount for Empire. If hospitals no longer had to give this special break to the Blues, everybody' costs would go down, making coverage more affordable for all.
 5. Eliminate the open enrollment and community rating provisions. This will encourage younger, healthier people to keep their coverage. Since it is mostly younger people who are uninsured, this will substantially lower the numbers of people without insurance coverage and the resulting bad debts that drive up hospital and physician costs.
 6. Require guaranteed renewability, portability, and continuation of coverage provisions. Once someone has an insurance policy, they should not have to undergo new underwriting restrictions every time they change insurance companies or employers, if they keep their coverage continuous. This will encourage people to get in and stay in the health insurance system, instead of allowing them to purchase coverage only when they think they will need services.
 This six step program will encourage more competition in the health insurance market in New York, provide people with a wider variety of choices, and most importantly , end the sole reliance on an inept, mismanaged and possibly corrupt Blue Cross Plan for individual and small group health insurance.
 The Council for Affordable Health Insurance and our member companies stand ready to work with the legislature to help make this transition to a market based health care financing system a reality.
 -0- 7/20/93
 /CONTACT: Greg Scandlen of The Council for Affordable Health Insurance, 703-836-6200/

CO: The Council for Affordable Health Insurance; Empire Blue Cross ST: New York IN: INS SU:

TW -- DC024 -- 3450 07/20/93 14:25 EDT
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Publication:PR Newswire
Date:Jul 20, 1993

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