Highmark Blue Cross Blue Shield has stopped subsidizing premiums for some families in the Pennsylvania Children’s Health Insurance Program (CHIP). The insurance company said it will no longer subsidize care for children in families whose incomes fall between 200 percent and 300 percent of federal poverty guidelines.

As a result, families have seen their premiums skyrocket 78 percent since the change went into effect in October.

Highmark is one of four health insurers that administer the state’s program for uninsured children.

In an email to area legislators and others, Highmark offered the following explanation:

“I am writing to inform you of a recent decision made by Highmark regarding the Children’s Health Insurance Program (CHIP), which may affect some of your constituents. As you know, CHIP offers free and low-cost health insurance for eligible uninsured children from birth to age 19. The program, for which we serve as a contractor, offers a comprehensive benefit package that includes doctor visits, hospitalization, emergency room, diagnostic testing, vision, hearing, dental, and behavioral health benefits. Program eligibility is based on family size and gross annual income.
Over the years, Highmark has voluntarily supported CHIP and our local communities by paying a portion of Highmark CHIP member premiums each month to make it more affordable for families. However, we regret to inform you that effective October 1, 2009, Highmark will no longer provide voluntary premium subsidies and will begin charging the monthly CHIP rates approved by the Pennsylvania Insurance Department last February. Highmark is taking this step, in today’s challenging economic environment, because of increasing financial losses as a CHIP contractor due to unreimbursed administrative expenses by the state and increasing medical costs of people enrolled in the program.”

Pennsylvania state representative Jesse White called Highmark’s decision a “lowmark for the uninsured.”
Here is an excerpt from Rep. White’s blog:
“Highmark is discontinuing health insurance for needy children in their hour of greatest need because they need to make more money, and they blamed the government and the patients as the primary cause of their misfortunes. I can certainly understand; they only posted a profit of $94 million last year, and their surplus sits at a paltry $3.1 billion. It’s a miracle they can still afford to light up that enormous building in downtown Pittsburgh.
“So can someone remind me again exactly how these insurance conglomerates came to be known as the “good guys” in the health care debate?”

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