Mergers Limiting Choice - Part III

In a follow up to this post about United Healthcare and HCA (HealthOne): to date, UnitedHealthcare and HCA (HealthOne) have been unable to reach an agreement in Colorado. Effective September 1, 2006, hospitals and surgery centers owned by HCA (HealthOne) are considered out-of-network. As always, emergency services will not be considered out-ofnetwork. Some physicians and other medical providers who were network members through the HCA (HealthOne) system may also no longer be in the network. You should check with your provider before your next visit.

Boulder County Kaiser Permanente Announcement

If you have an employer group plan from Kaiser Permanente and have the Triple Option Point of Service plans and PPO plans in Boulder County, Colorado, there are some very important changes.

PHCS Network Changes:
Boulder Community Hospital and the Boulder Valley IPA, participating/preferred providers for Added Choice Triple Option and PPO members, notified Private Health Care Systems (PHCS) that effective Sept. 1, 2006 they would no longer be a participating provider for Kaiser Permanente Added Choice Triple Option and PPO members. This includes the following facilities:
a. Boulder Community Hospital
b. Boulder Medical Center
c. Boulder Ambulatory Surgery Center
d. Community Medical Center
e. Community Reference Laboratory
f. Mapleton Center for Rehabilitation Services
g. Mapleton Center for Rehabilitation Services-Longmont,
h. Mapleton Behavioral Health Services,
i. Miriam R Hart Regional Radiation Therapy Center,
j. Boulder Community Homecare,
k. Boulder Center for Sports Medicine
l. Therapy Clinic at Gunbarrel
m. Endoscopy Center of the Rockies.

Kaiser is actively working with Boulder Community Hospital and Boulder Valley IPA to reach an agreement as late as August 30th. Kaiser Permanente is committed to providing high quality, affordable care to the residents of Boulder County and Boulder Valley. Kaiser Permanente continues to have a network of participating/preferred providers in Boulder County and Boulder Valley available to our Added Choice Triple Option and PPO members. This network includes hospital and physician providers.

Kaiser Permanente will support members in the transition of care by continuing to cover all services received from these providers as Tier 2 Participating providers for Added Choice Triple Option plans and In-Network Preferred providers for PPO plans through November 30, 2006. Any member in the third trimester of pregnancy will be covered for services received through delivery. After November 30, 2006, Kaiser Permanente Added Choice Triple Option and PPO members can continue to access Boulder Community Hospital and Boulder Valley IPA providers however out-of-network charges will apply.

A letter is being mailed to all employer groups with members enrolled in the Added Choice Triple Option and PPO plans to inform them of this important change and Kaiser Permanente’s transition of care plan. In addition, PPO and POS members will be receiving a letter to inform them of this important change.

Smaller Check, Higher Deductible

The median income in Colorado has fallen while the number of people without health insurance in the state remained flat, according to a U.S. Census Bureau study released Tuesday.
The Census Bureau said the median household income fell from $52,729 (a two-year average for 2003-04) to $51,518 (a two-year average for 2004-05).
For the three-year average median household income, covering 2003-05, Colorado's $52,011 put it 11th in the nation.
Meanwhile, the Census Bureau said the number of people without health insurance coverage in Colorado stood at 16.9 percent of the population for 2003-04 and 16.8 percent for 2004-05.
The national average for 2004-05 was 15.7 percent.

Colorado residents are now covering more of their healthcare costs with less money.

Colorado Uninsured Rising

The portion of Coloradans with employment-based health insurance has dropped 7 percent in five years as rising health-care costs push insurance policies out of reach.
The portion of the workforce under 65 covered by work-based insurance fell to 64 percent in 2005, according to a U.S. Census study released Tuesday.
The Denver Post reports: The total number of Colorado residents without insurance reached an all-time high of 788,000, or 17 percent of the state's population, the study said.
Driving the insurance decline is a 10 percent annual increase in medical costs, according to Dr. Gary VanderArk, president of the Colorado Coalition for the Medically Underserved.
"Employees are expected to pick up bigger and bigger co-pays and bigger deductibles, and it drives some out," he said.
Some employers are either not offering insurance or cutting back on benefits, said Carrie Curtiss, associate director of the Colorado Consumer Health Initiative.

As health care costs continue to increase; employers are covering less and less and employees essentially end up with a smaller income.

Undoing the Misconception

I was recently talking to a client that was coming off a plan through her job. She was offered COBRA, but it was obviously really expensive. She mentioned that she gets a prescription for a depression medication that costs around $150 per month retail. I explained that because we are looking at underwritten plans, none of the companies will cover anything to do with depression; including the medications.

When we started looking at some different options, she asked a very common question: "If they aren't going to cover my depression meds, then I don't need a plan that covers prescription drugs, right?"
I then reminded her that she isn't getting the insurance to cover what she already needs. Because if she were to get a disease that required $1,000 to $1,500 per month of prescription drugs, she would be in serious trouble. And if she were to get a plan that were to cover her pre-existing condition (like her COBRA), it would cost her more than it would to get an individual plan and pay for the medication herself.

She understood the situation very quickly, and was then asking about how HSA qualified plans could help her save even more. This is usually a hard situation for people to understand, especially people who have always been on group plans, where the employer paid most of their premiums and the insurance never asked about pre-existing conditions. I felt lucky that she understood so quickly because most people get angry and call health insurance a "crock"; and say "what am I paying all that money for if it won't cover what I need it to?"

At this point, I sometimes wish I could be a P&C agent (someone who sells home and auto insurance). I wonder how many times people call Geico looking for a car insurance quote on their recently wrecked car; and explode when they are told that the insurance won't pay for damage that was there before the policy was purchased?

Cavalcade of Risk

Kristin McAllister, who writes a blog about personal finance in the Dayton Daily News has put together the latest edition of Cavalcade of Risk. Personal finance enthusiasts will find plenty of good reading on this page with the two sections: Risky Business and The Secret of My Success. The page has an easy to read layout so you can browse the articles and check out only what you're interested in. You can peruse Cavalcade #7 here. If you enjoy reading it, let Kristin know.

By the way, we're hosting the next one at our new blog "spot", http://www.insuranceshoppers.net/blog1/.

Failure To Launch

In a new move to lower the number of uninsured in Arizona, Blue Cross Blue Shield has decided to allow parents to cover dependents until they turn 30 on individual, under 65 plans. As long as they aren't married they can be covered, whether they live with their parents or not and they aren't required to be students.

According to AZcentral.com:

Blue Cross researchers found that 19- to 29-year-olds in Arizona were more likely than the general population to be uninsured. Yet 75 percent of the young uninsured said they considered health insurance "very important."

This won't lower the price by much because individual/family plans charge per person. But it is likely to keep some "kids" insured at a point when they don't really have their priorities in line yet. In Colorado, Anthem Blue Cross Blue Shield has introduced Tonik, which is aimed at the high rate of uninsured in the 19-29 year old age bracket. Tonik is more attractive to this age group with lower rates, and dental and vision coverage; but lacks brand name prescription drug coverage, which is a low risk for this age group anyway.

Colorado law says that a person up to 25 years old can be considered a dependent if they are unmarried. Most Colorado health insurance companies also require that dependents over the age of 19 be full time students.

Democrat, Republican, Big Box Mart

Wal-Mart, under attack now from unions and prominent Democrats, yesterday introduced a marketing campaign that closely resembles the television advertisements used by political candidates.

The ads, running in Omaha and Tucson, underscore Wal-Mart’s transformation over the last several years from an insular company obsessed with low prices and technological efficiency to one that openly acknowledges its public relations troubles and has introduced numerous programs to counter them.

In the last year, the company has expanded health care coverage to the children of part-time workers, has committed to sweeping reductions in energy use and has promised to work with competing retailers in urban areas where it builds stores.

Later, the narrator ticks off a list of Wal-Mart’s benefits: “Last year alone, Wal-Mart created tens of thousands of new American jobs — many in areas where they’re needed most. And we offer eligible associates health insurance for less than a dollar a day.”

It looks like the negative attention they've received in the past has had an effect. They've beefed up their health insurance benefits a ton. This should be important to everybody because we'll all be working for Wal-Mart one day :)

I Want a "Group" Insurance Rate

I get calls all of the time from people on the search for a better health insurance rate and they ask me how they can qualify as a "group". The usual one I hear is that they are self-employed and their wife helps them with the books, so they want a "business group" plan. I once got a call from a guy representing a large group of independent musicians from all over Colorado and they wanted to band together into a group for health insurance reasons.

While there are several ways we can find people a "group" rate on health insurance, it's usually the worst option available. In Colorado, if you're self-employed you can typically get a Business Group of One (BGO1) policy for just yourself without even having other people in your group. The problem is that Colorado law (as well as most other states) says that group health insurance cannot be underwritten. Even better right? Well, policies that are underwritten are normally 1/2 to 1/3 of the cost of non-underwritten policies. This is because they don't have the extra expense of having to cover pre-existing conditions. Not only do they not cover pre-existing conditions like asthma, but they can completely decline people with more serious health conditions. This dramatically lowers the cost structure.

It's not uncommon that I'll meet someone who bought their first health insurance policy as a self-employed person without the help of a health insurance broker or they bought it from their P&C agent. They are a perfectly healthy person on a self-employed BGO1 policy paying nearly 3 times as much as they need to be for their policy. All because they are self-employed, so they figured they needed a group rate policy for self-employed people.

If you're ever in a situation where you need to buy your own insurance (because you're self employed or your job doesn't cover it) and you have a pre-existing condition that prevents you from getting an underwritten individual/family policy, CoverColorado may be able to help. Colorado is just one of many states that has a risk pool. If you are a self-employed individual needing coverage only for yourself, a BGO1 will probably work well. But if you have dependants, and you or one of your family members needs a guaranteed issue policy because of a serious pre-existing condition, the most cost-effective solution may be to put that person on a CoverColorado policy, and get an underwritten policy to cover the rest of the family. That way you're only paying the guaranteed issue "group" price for the person who needs it, rather than the whole family.

Definition of Insurance - Part II

To further the definition of insurance beyond Louise's post, insurance implies that you're taking some sort of risk. And "losses [or gains] must be uncertain" according an official definition of insurance. In some interesting comments to a post on insureblog, I took part in a further discussion of the definition of insurance. It's very interesting - check it out.

There are many other variables that need to be changed in healthcare, like usage. As Louise and Justin from HealthFlux pointed out, people shouldn't be expecting their health insurance to provide constant use - like a car, or a house, or food. The real problem is trying to educate people that health insurance is different. I try to point out that health insurance should be looked at like home or auto insurance. But when people disagree, what are the best ways to do that without sounding preachy and providing them with good service?