Miami Herald: Blue Cross to offer employees only one health plan

The Miami Herald published this article on October 21, 2009

BY JOHN DORSCHNER
jdorschner@MiamiHerald.com

While insurers nationwide say it’s important that healthcare reform offer people plenty of insurance alternatives, Blue Cross Blue Shield of Florida has decided that one basic plan is best for its employees next year.

Its agents will continue to offer businesses and individuals dozens of options in health maintenance organizations, preferred provider organizations and other possibilities, but in 2010, the 5,000 employees of the state’s largest health insurer will be required to go into a high-deductible product linked to health savings accounts.

“This wasn’t a one-year decision,” says John Wagner, a Blue Cross product manager. “We started this transition four years ago” as part of an “over-arching [human resources] strategy . . . to have an engaged, productive workforce.”

The Jacksonville-based insurer’s leaders have become firmly convinced that an HSA plan makes sense because it requires workers to make their healthcare decisions — and rewards those with healthy behaviors.

By law, HSAs combine high-deductible policies with tax-free savings accounts to which both employers and employees can contribute, similar to 401(k)s for retirement accounts. Unlike more common flex plans, HSA money can roll over year after year if not used.

Wagner says employees have two HSA possibilities: A $1,500 deductible with employees paying 10 percent co-insurance and a $2,500 deductible with 20 percent co-insurance.

HARD TO DECIDE

Critics of HSAs say that their problem is that they assume consumers can make intelligent decisions about their healthcare when it’s often difficult for most people to judge the costs and benefits of complex medical alternatives.

“They work well, especially for the healthy and wealthy,” says Santiago Leon, a Miami healthcare insurance broker. “They work less well for the less healthy and less wealthy.”

HSAs also force people to make healthcare decisions when they don’t have information. Leon points out that if a person is feeling symptoms that might be swine flu, he might delay treatment because he doesn’t want to pay against his deductible or use his HSA dollars.

Wagner says such criticisms are unfair because HSAs are built on a philosophy of informed decisions and wellness. At Blue Cross, a key is for employees to fill out a risk-assessment survey in which health basics like weight, blood pressure and cholesterol level are combined with behavior patterns like smoking and stress levels. Such surveys, becoming more popular among all employers, can lead to advice about diet and exercise in an attempt to improve wellness and lower costs. Stressed employees might be advised to seek out the employee assistance program.

If employees fill out a risk assessment, Blue Cross will contribute $1,000 to the HSA. If they don’t, the company match is $500. Employees can contribute their own money in amounts depending on income based on guidelines from the Internal Revenue Service, Wagner said.

As its salespeople tell prospective customers, HSAs are designed to make users smart consumers, since a percentage of their own money pays for almost all treatments.

The exception is some basic screenings — such as mammograms and colonoscopies — which the insurance pays for completely. Some other preventive measures, such as an annual physical, involve co-insurance but not the deductible, says Wagner. That means if a person with the $1,500 deductible and 10 percent co-insurance had a $150 physical on Jan. 2, she would pay $15.

Wagner said there has been very little push-back from employees. “Probably only three or four employees have raised concerns,” he said.

Contrasting the Blue Cross plan for employees with the offer of a wide variety in healthcare reform was “unfair,” Wagner said. “We provide a good benefit” at a reasonable price.

ADVANTAGES

 In 2009, when the HSA was voluntary, about three-quarters of employees opted for the HSA, lured by the company match to the savings account. Wagner said that over several years, he has built up so much money in his health savings account, he planned next year to opt for the $2,500 option with 20 percent co-insurance because he could pay his portion with tax-free dollars.

Wagner said employee premium payments for 2010 had yet to be determined, but as in the past, they will be on a sliding scale, with top managers paying more and the lowest-paid employees paying less. In 2009, he noted, the lowest-level employee who completed a risk assessment paid nothing for the cheapest HSA.