Comment: Premera negotiating to keep health care affordable

By Eric Lloyd / For The Herald

We know people are upset to learn that EvergreenHealth has given Premera Blue Cross notice to terminate our contract effective April 1. We’re upset too.

When people seek health care, the last thing they should be worried about is uncertainty and confusion over their coverage. Access to affordable, quality health care is critical to our customers and everyone in the state. This is why Premera has been focused on reaching an agreement that will allow our members to continue seeing their providers at EvergreenHealth’s hospital in Kirkland as well as their specialists, urgent care, primary care and specialty care facilities throughout King and Snohomish counties.

We deeply understand that health care systems across Washington are facing unprecedented financial pressures. Health plans are experiencing relentless cost pressures, too, including increased claims costs associated with needed medical treatments that were delayed because of the pandemic. The current economic environment in the health care industry is challenging for everyone. Like health systems, Washington businesses and Premera aren’t immune to these financial pressures. We want to do our part, but we will not accept unreasonable rate increases that will ultimately drive up further costs for our customers.

Unreasonable rate increases cause financial harm to our shared customers at a time when we’re all focused on making health care work better by reducing costs while keeping quality high. One thing to remember is that the vast majority of our members who seek care at EvergreenHealth are from self-funded employers. That means the employer bears the costs when health care rates go up.

Health plans, like Premera, are the third-party administrators (TPA) for self-funded plans. As TPAs, health plans provide administrative support for self-funded plans, but they don’t carry financial responsibilities. Simply put, the employer pays the claims not the health plan. In 2021, nearly two thirds of the claims we received from EvergreenHealth were from self-funded groups. Because the self-funded employers pay the cost of the claims, rate increases directly hit their bottom line.

This impact has an economic ripple effect. Seven in 10 employers expect moderate to significant increases in the cost of health benefits over the next three years, according to a recent Willis Towers Watson survey. Employers will have to choose between taking the hit or passing the added cost to their employees; this could have a chilling effect on job creation. Also, when a company’s costs go up, they tend to raise prices on their products and services. This means we might all pay more, too.

Premera has been negotiating in good faith with EvergreenHealth and we’ll continue to do so because our customers deserve an agreement that will preserve access to affordable, quality healthcare.

We believe a solution can be reached that includes a reasonable rate increase and practical steps to drive down costs and ensure long-term financial success.

For more information, go to healthsource.premera.com/your-premera-plan/evergreenhealth/.

Eric Lloyd is senior vice president of Provider Strategy and Solutions for Premera Blue Cross.