Copyright 2000 The Chronicle Publishing Co.
The San
Francisco Chronicle
SEPTEMBER 28, 2000, THURSDAY, FINAL EDITION
SECTION: BUSINESS; Pg. B1
LENGTH: 874 words
HEADLINE:
Blue Cross To Offer Cheap Plan
BYLINE: Tom Abate,
Chronicle Staff Writer
BODY:
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 Cross
insurance.
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 substance.
"Blue Cross does a terrific job on advertising
and promotions, but you and I don't get the benefit," he said.
E-mail Tom Abate at tabate@sfchronicle.com.
LOAD-DATE: September 28, 2000
