Commentary: Premera negotiates to keep health care affordable

By Eric Lloyd / For the Herald

We know people are upset to hear that EvergreenHealth gave Premera Blue Cross notice to terminate our contract effective April 1st. We are also upset.

When people are looking for health care, the last thing they should worry about is uncertainty and confusion about their coverage. Access to affordable, quality health care is essential for our customers and for everyone in the state. That’s why Premera has been focused on securing an agreement that will allow our members to continue to see their providers at EvergreenHealth Hospital in Kirkland as well as their specialists, emergency care, primary care and their specialty care facilities in King and Snohomish counties.

We deeply understand that Washington’s health care systems are facing unprecedented financial pressures. Health plans are also under relentless cost pressures, including rising claims costs associated with necessary medical treatments that have been delayed due to the pandemic. The current economic environment in the healthcare industry is challenging for everyone. Like health systems, Washington and Premera companies are not immune to these financial pressures. We want to do our part, but we will not accept unreasonable rate increases that will ultimately drive up costs for our customers.

Unreasonable price increases are causing financial harm to our mutual customers at a time when we are all focused on making healthcare work better by reducing costs while maintaining high quality. One thing to remember is that the vast majority of our members who seek care from EvergreenHealth are from self-funded employers. This means that the employer bears the costs when health care rates increase.

Health plans, like Premera, are third-party administrators (TPAs) of self-funded plans. As TPAs, health plans provide administrative support to self-funded plans, but they have no financial responsibilities. Simply put, the employer pays the claims, not the Medicare plan. In 2021, nearly two-thirds of the claims we received from EvergreenHealth were from self-funded groups. Since self-funded employers pay the cost of claims, rate increases have a direct impact on their bottom line.

This impact has an economic ripple effect. Seven in 10 employers expect moderate to large increases in the cost of health benefits over the next three years, according to a recent survey by Willis Towers Watson. Employers will have to choose between taking the hit or passing the extra cost on to their employees; this could have a chilling effect on job creation. Moreover, when a company’s costs increase, it tends to increase the prices of its products and services. That means we could all pay more too.

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

We believe a solution can be found that includes reasonable rate increases and practical measures to reduce costs and ensure long-term financial success.

For more information, visit

Eric Lloyd is senior vice president of vendor strategy and solutions for Premera Blue Cross.

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