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Georgetown University Study Concludes Federal Association Health Plans Would Create Regulatory Vacuum and More Healthcare Fraud

Posted on: Friday, 22 July 2005, 12:01 CDT

DENVER, July 22 /PRNewswire/ -- Anthem Blue Cross and Blue Shield in Colorado concurs with the findings from a new Georgetown University study that concludes federal association health plan (AHP) legislation would "create a regulatory vacuum" and allow fraudulent insurers to flourish. The report, authored by Georgetown University Assistant Research Professor Mila Kofman, J.D., was released yesterday at a news briefing in Washington, D.C. Congress is currently considering legislation (HR525/S. 406) that would exempt insurance sold by association groups from comprehensive state laws and oversight that currently protect millions of consumers.

In the report, Kofman asserts that federal AHPs would "exacerbate the current problem of health insurance fraud" and "leave small businesses and their workers unprotected .... The consequences are predictable: bankruptcy, delayed or foregone medical care, and loss of coverage for America's small businesses and workers."

"While federal AHPs may sound good on the surface, this new study clearly shows that AHPs would threaten the security and reliability of health insurance for millions of Americans," said Joe Hoffman, VP and GM, Anthem Blue Cross and Blue Shield in Colorado and Nevada. "Consumers would lose critical state protections against fraud, as well as protections that prohibit unlimited premium increases, ensure appeal rights and require coverage of important benefits."

Kofman's paper presents three major conclusions:

* The elimination of state oversight will leave consumers vulnerable to fraud and abuse -- because the bill would prohibit states from protecting consumers enrolled in AHPs;

* The proposed federal regulatory structure for AHPs will expose consumers to more fraud and unpaid medical bills; and,

* Widespread confusion over who has regulatory authority and which rules apply would create an environment ripe for fraud and abuse.

Between 2000 and 2002, state investigators across the country shut down 41 illegal operations selling coverage through phony and real associations while the Department of Labor shut down three operations. "Without strong state oversight and regulation," continued Mr. Hoffman, "there is no question that we will continue to see increases in fraudulent activity and people will be left stranded with unpaid health bills."

For a copy of the report, go to http://hpi.georgetown.edu/ahp.html About Anthem Blue Cross and Blue Shield in Colorado

Anthem Blue Cross and Blue Shield's mission is to improve the health of the people it serves. Anthem Blue Cross and Blue Shield in Colorado is a subsidiary of WellPoint, Inc. . WellPoint, Inc. is an independent licensee of the Blue Cross and Blue Shield Association and serves its members as the Blue Cross licensee for California; the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), Wisconsin; and through HealthLink and UniCare. Additional information about WellPoint is available at http://www.wellpoint.com/ .

Anthem Blue Cross and Blue Shield

CONTACT: Sally Vogler of Anthem Blue Cross and Blue Shield,+1-720-373-4836 or +1-303-831-5899, sally.vogler@anthem.com

Web site: http://www.wellpoint.com/http://hpi.georgetown.edu/ahp.html

Source: PRNewswire

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