Medical director says Blue Cross preparing for $90M in new taxes from ‘Obamacare’

Blue Cross and Blue Shield of Louisiana expects to pay $90 million in new taxes in the first year to fund rollout of the Patient Protection and Affordable Care Act, or “Obamacare,” says Chief Medical Officer Dr. David Carmouche. The new costs could put an “upward pressure” on their rates, at least in the short term, and may impact Blue Cross’s ability to compete against national companies with a lower relative tax burden. “How that plays out in terms of our ability to compete in this market is an unknown,” Carmouche says. The new costs are only one aspect of the law that impacts Blue Cross’s business model. The legislation also drastically reduces the number of personal health risk factors that can be taken into account when setting rates. In effect, younger, healthier people will be subsidizing older, sicker people. Blue Cross traditionally has marketed to business owners and human resources directors; now they must learn to engage individual consumers. Of course, Blue Cross will have access to a whole new customer base that couldn’t afford insurance before, although it’s also likely to have new competitors. To read a Business Report story about the Affordable Care Act, written before the presidential election, click here. —David Jacobs