BlueCross of TN CEO warns of healthcare cost 'explosion'

Bill Gracey, CEO of BlueCross BlueShield of Tennessee told a business crowd at a Nashville Area Chamber of Commerce event yesterday, sees a need for healthcare reform, pointing specifically to issues with access and spiraling costs in the U.S. The challenge, he said, is that the current round of reform only approaches the access issue, not costs. The company expects anywhere from 20 to 30 percent increase in rates in the individual market starting next year, and a 10 percent increase in the small group market. Contributing to that increase is a new tax on payers in the law, totaling $220 million in the first year alone. As Gracey pointed out, that's about on par, or more, than the company's annual profit, and will have to be taken from premiums, which in turn will hike up rates.