5.4. SR 11-13-2006 - Laserfiche WebLink

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Rolling the Dice ort New Health Plans ContinuedFrom First Business Page said Judy Rosenthal, a working mother in Independence, Mo., who has experimented with four plans in five years. Several years ago, Ms. Rosenthal chose a $1,000 deductible with a rela- tively low $126 monthly premium for herself and her two young sons. Three months later, one'of her sons broke his leg. Right off the top, she had to pay $1,000 before the health plan picked up the remainder of her son's bills. , "I got scared and went to a $250 de- ductible for the next year," said Ms. Rosenthal, who works as a research coordinator at Discover Vision Cen- ters, an eye care chain. The pre- mium was $326 a month that year, 2003. But it kept going up - to $388 in 2004 and $440 for, 2005, when she switched plans again. "I couldn't afford that," she said. So to reduce her monthly outlay, she gambled on a plan with a $2,500 de- ductible with a $230 monthly pre- mium. "Last year, I came out ahead," Ms. Rosenthal said. "With kids, you never know." During her employer's enrollment period this year, for coverage be- ginning July I, Ms. Rosenthal signed up for a $1,500 deductible plqn with a $323.81 premium. Over. the Fourth of July weekend, one son hurt his back playing baseball. Ms. Rosenthal quickly burned through her own $1,500 on a visit to an orthopedic sur- geon and subsequent physical ther- apy. Because consumer-directed health plans have been around for only a short time and adopted by relatively few workers, it is hard to know yet whether they are meeting the goal of making people better consumers of ,health care. The evidence "shows that greater cost-sharing leads to reduction in health care use and expenditures," said Melinda Beeuwkes Buntin, an economist who led a study of the plans that was released last month by the research center Rand. "But what we don't know," she said, "is how this will affect overall health quality and patients' health." That is why, despite the prospect of saving money on their employees' health benefits, mlmy companies are also cautious, mindful that their workers could end up worse off. "Large employers are not rushing pell mell into these products," said Peter V. Lee, the chief executive of the Pacific Business Group on Health, a San Francisco-based em- 'ployer group. During the enrollment season for 2006, only 7 percent of employers that offer health benefits made con- sumer-directed plans one 'of the op- tions, according to a widely respect- ed annual survey conducted jointly by the Kaiser Family Foundation and the Health Research and Educa- tional Trust, which was released in late September. The report estimated that fewer than three million workers and their dependents were enrolled in such plans. Many consultants and insur- ers say the nm.nbers are actually much higher - at least twice Kai- ser's estimate - but that would still be only a small fraction of the 70 mil- lion or so American workers covered by employer health insurance. Last year, the Kroger supermar- ket chain, one of the first large com- panies to offer a consumer-directed plan linked to an individual health savings account, managed to con- vince only'5 percent - or 3,500 of its 70,000 eligible employees - to sign up. To attract more employees in the current sign-up period, Kroger is adding a $500 match to employee contributions to the health savings account. In an individual health savings ac- Employers have been slow to adopt the changes because of :\,. , the high risk. count the annual contribution cannot exceed the plan's annual deductible. But it can grow tax-free until the money is withdrawn and can be add- ed to year after year. And it is the employees' to keep even if they change jobs. Nationally, employees have . opened about 1.2 million ac- counts that contain about $1.5 billion, according to 'a survey of 60 adminis- trators of health savings plans by Steve' Davis, managing editor of In- side Consumer-Directed Care, a trade newsletter. "We think health savings accounts give our associates a long-term in- terest in the economics of health care that wasn't there before," said Mike Stoll, vice president of corpo- rate benefits at Kroger. So that employees do not skimp on the preventive medicine that can stave off much more expensive health conditions, many of the plans provide 100 percent coverage for such basics as a yearly physicals or annual mammograms. The insurer ,UnitedHealth Group is the leading provider of consumer-directed plans, with 1.8 million members. By com- bining financial incentives with the help people need to' make better health care decisions, UnitedHealth said, its patients with chronic dis- eases who are enrolled have 12 per- cent fewer emergency room visits Questions to Ask When Picking a Plan The calculus will vary, depend- ing on the person's circumstances and the details of the health plan offering. But in trying to choose between a traditional plan and a consumer-directed one, here are. some of the main issues to consid- er. . What health care services am I likely to use? If you have a chron- ic condition, add up the cost of drugs you take and doctors you see. Be sure to include the costs of any yearly checkups or tests. How much of my health-care costs am I responsible for? Care- fully compare premiums, deduct- ibles, co-payments and the maxi- mum out-of-pocket amount you are liable for in a year. Some con- sumer-directed plans cap your personal outlays at lower levels than traditional plans. What is covered? A doctor or hospital out of the plan's network may cost.much more in a consum- er-directed plan, but if you stay in-network these plans may pay 100 percent of preventive care or even the drugs and doctor visits for a chronic condition. Can I save toward future health care costs? A health savings ac- count linked to the plan, if that is an option, may help you build sav- ings for an early retirement, and there are tax advant!:lges. The plans can be even more attractive if the employer matches part of the contribution. How can I learn more? Ask your. employer or the insurer for more information or links to Web sites that may provide further gUidance ili determining whether a specific plan is right for you. than those in traditional plans. Even Kaiser Permanente, the' health plan best known for its classic H.M.O.'s, plans to offer consumer- directed products in California next year. And Medicare, the federal in- surance program, is experimenting with some form of health savings ac- counts in 39 states. "We're getting there,"" said Tracy L. Bahl, a UnitedHealth Group exec- utive who manages health benefits for large employers. While adoption may be slower than anticipated, he said, "the trajectory still remains positive." The real attraction of the plans for employers is the potential savings. UnitedHealth points to its own study of 50,000 workers in these plans, which found that the average cost of care for members decreased 3 to 5 percent, compared with an increase of 8 to 10 percent in UnitedHealth's traditional plans. Some employees are enthusiastic about consumer-directed coverage. About half the 5,000 eligible workers at the Visant Corporation, a printing and marketing company in Armonk, N.Y., are enrolled in a plan with ade- ductible of $1,000 for an individual and $2,000 for a family. For Brian Hartman, a 36-year-old Vis ant finanl(e executive, the compa- ny this year contributed $600 to a health reimbursement account - a savings vehicle similar to a health . savings account except that the em- . ployer keeps its contributed money if the employee leaves the company. For doctors in the network, the plan covers 90 percent of fees, and those fees are discounted for plan mem- bers. Mr. Hartman said that his former health plan, a traditional preferred provider -P.P.O. - plan, with a $500 deductible for 'each member, had covered only 80 percent of doctor fees. That coverage "was not so great," Mr. Hartman said. " Now, "I'm really impressed with the level of discounts at the different doctors we go to in the new plan," he said. "We don't have a co-pay. There is no paperwork." Other people in consumer-directed plans have been disappointed, though. Don Cohon of Muir Beach, Calif., has tried the new approach and gone back to more traditional coverage. That was after an expensive bicy- Cle accident in February 2005 that sent him to an emergency room. Even before he was examined Mr. Cohon incurred a $12,000 "trauma ac- tivation fee." Although he spent less than three hours in the hospital, after X-ray!i. a CT scan and treatment for some bruises, his total bill came to $25,000. Mr. Cohon, whose plan had a $2,500 deductible, was responsible for $6,200 of the charges. He eventually managed to con- vince the hospital to forgive the bulk of . that amount. But he is now en- rolled in a traditional plan offered by his employer, the Edgewood Center for Children and Families, a non- profit social services group. "It's much better coverage," he said. "It's not a high-deductible." Even for consumers who try to make careful use of the health care system because they are now paying a larger share of cost, high medical bills can be inevitable. "It sounds good to say you need skin in the game," said Dr. Greg M. Silver, a family physician in Clearwater, Fla. In his case, the "skin" was a plan with a $5,000 deductible. And he was careful to choose family doctors and a hospital that were in the plan's net- work - the hospital where Dr. Silver was a department chairman. But when his son had to have an ap- pendectomy at that hospital, he dis- covered that none of the specialists there were in the network.