While its 39 companies strongly support comprehensive health care reform, the Blue Cross and Blue Shield Association says it is “disappointed” that many of the provisions in the House’s bill “would undermine the very policy objectives we collectively hope to achieve.”

In a statement, the organization said it is still reviewing the 1,990-page Affordable Health Care for America Act, but finds many of its details undermine the goals of access and affordability for Americans, including the proposal to create a government-run public insurance program.

A similar stance was taken by America’s Health Insurance Plans, the national association representing nearly 1,300 member companies providing health insurance to more than 200 million Americans, after the unveiling of the House bill Oct. 29. That group also found fault with many provisions, especially the public option.

Under the proposed legislation, the public option would compete with private insurers in a health insurance exchange and its rates would be negotiated between providers and the U.S. Department of Health and Human Services.  A similar proposal is expected to be included in a unified Senate bill, with the added feature of an opt-out clause for states that wish not to participate in the program.

“The proposed creation of a new government-run health plan – which could be open to everyone through the new federal exchange beginning 2015 – would jeopardize affordability and access to coverage for the 160 million people who receive their benefits through their employers today,” the BCBSA said in a statement. “The bill also would undermine affordability by allowing people to wait until they are sick to buy coverage, setting higher minimum benefit packages than people commonly purchase today, and placing an unfair burden on younger people by restricting age discounts.”

The association, whose companies cover nearly 102 million Americans, echoed a long-running argument that a government-run plan will “use its built in advantages – no matter how it is initially structured – to take over the market.”  Democrats, including President Barack Obama, have denied any unfair advantage for a public option, stressing its goal is to keep private insurers “honest,” in the president’s words, and increase competition.

“Although House leadership is now proposing to use ‘negotiated’ rates to pay providers, the government does not negotiate,” said the BCBSA statement. “It would quickly resort to price-setting based on Medicare or use existing government programs as leverage for negotiations, creating similar effects.”

The association also contends that the House bill would give the public plan an exemption from federal and state taxes and other assessments private plans are subject to, as well as immunity from state lawsuits and “a host of other state rules and regulations.” The new plan would also benefit from at least $2 billion in start-up capital, the Blues claim.

Another area of contention for the BCBSA is the proposed health insurance exchange, open to employer up to group size 100 by 2013 and possibly expanded to everyone two years later.

“While we agree that exchanges are needed to help individuals and small businesses shop, compare and enroll in coverage, the proposed federal exchange would result in a massive shift of authority to the federal government that would undermine existing state authority and create conflicting state and federal rules,” the association said.

The BCBSA said it will continue to push for reform that “expands coverage, reins in costs and assures affordable premiums for everyone.

“Unfortunately, the House bill does not achieve these goals,” BCBSA said. “We want to continue to work with members of Congress to enact a workable healthcare reform bill. “