San Francisco Chronicle
Saying it wants to offer cheaper health care to the uninsured, Blue Cross of California proposed premium reductions yesterday for most of its individual policyholders while shifting some of the costs to deductibles.
The program, which is subject to state approval, would offer basic plans for as little as $55 a month. People would have to pay their own drug bills and the first $5,000 in hospital bills, but the plan would pay the complete costs of all routine doctor visits.
Some observers called it a novel effort to keep people insured, while others termed it inadequate.
The disagreement highlights the central issue in the health care debate: how to strike a balance between plans that cover everything at huge monthly costs, and inexpensive plans that don’t cover what people really need.
“We believe we’re going to get some uninsured people back on board, and more importantly, we’re not going to create any new uninsured,” said Mark Weinberg, who runs the Blue Cross division that oversees the 750,000 policyholders directly affected by the new proposal.
But Larry Levitt, an insurance analyst with the independent Kaiser Family
Foundation, said while the idea seems well intentioned, it probably won’t induce the uninsured — most of whom earn less than $30,000 a year — to pay a monthly premium.
“They think, I’m just getting by, and to spend $50 or $100 a month on
insurance, maybe I’m just better off rolling the dice that I don’t get sick,’ ” he said.
The proposal is directed at the 750,000 people who pay for their own Blue
The changes do not affect the rest of Blue Cross‘ 4.3 million subscribers, whose insurance is provided through employer-sponsored health maintenance organizations.
The proposal was delivered yesterday to the state Department of Managed Care, which must approve any changes before they can take effect on Jan. 1.
Managed Care Director Daniel Zingale termed the plan “a new and innovative approach” but said he would reserve judgment until he has studied how it would affect consumers.
According to Blue Cross, the plan would consolidate several dozen current
individual health policies into seven new programs. Overall, two-thirds of its policyholders would get average premium reductions of 15 percent.
The remaining third, however, would see premium increases of 9 percent for plans with comparable benefits.
“But there will be a net reduction in premiums overall,” Weinberg said.
He said the idea was to offer a range of options, beginning with bare-bones plans that would allow a 40-year-old single mother with two kids to have a $51 per month health plan.
Such basic plans would come with restrictions. Prescription drugs would not be covered. The plan would impose a $1,000-a-year deductible on specialist care and hospitalization, up to a $2,000-per-family maximum.
On the other hand, even the cheapest plan would pay 100 percent, without being subject to the deductible, if the mother in this example needed to take herself or the kids to any of the 48,000 doctors who have agreed to accept Blue Cross patients, the company said.
To add prescription drugs to the coverage for the same family would add about $30 a month to the premium cost.
The deductibles kick in when people require hospitalization or advanced
diagnostic tests, like MRI scans, Weinberg said.
In that event, policyholders would also pay as much as 25 percent of the first $5,000 in bills.
Once the person has paid $5,000, the plan would step in and pay 100 percent of health bills, to a $5 million maximum, Weinberg said.
Jamie Court, with the nonprofit health insurance watchdog group Consumers
for Quality Care, said he is “cautious” about the Blue Cross proposal.
“The devil in these policies is always in the details,” he said.
Court predicted that the one-third of Blue Cross policyholders who would see increases under the proposal would object to being forced to give up their current plan — which may contain better benefits without the new deductibles.
“That’s taking away people’s choices,” he said.
But Weinberg said Blue Cross is trying to adjust the overall mix of policies to keep the average monthly cost per individual below $100. “That’s the magic number,” he said. “Above that, you see people start to drop off.”
He said that under the current mix of plans, the average Blue Cross individual policyholder pays $110 per month.
At least one other California insurer says it is offering cheap, individual policies. HealthNet spokesman Brad Kieffer said his firm recently introduced five plans that are competitive with Blue Cross‘ and may not carry deductibles.
A spot check of independent insurance agents who represent Blue Cross and
other insurers elicited mixed reviews on the proposal.
An agent in San Francisco, who asked not to be named, said the budget plans would appeal to the working families among her clientele.
But Dave Bauer, an agent in Belmont, said the proposal is more hype than
“Blue Cross does a terrific job on advertising and promotions, but you and I don’t get the benefit,” he said.