Health care premiums soar for some workers
As Western New Yorkers finish enrolling in their health insurance plans for 2009, many are suffering sticker shock.
Federal workers and small-business people covered through chambers of commerce are especially hit hard.
Federal government employees are angry about a 50 percent hike in Univera Healthcare’s total rates. That translates to a near-doubling of the portion they have to pay — far above the 10.4 percent average rate hike the insurer said its members would have for 2009.
At the same time, they’re upset because BlueCross BlueShield’s national “standard option” plan, offered locally through HealthNow New York, will now force them to pay the entire bill for surgery or anesthesia from an out-of-network provider, including for childbirth. Presently, they pay just 25 percent, plus the difference between what’s authorized and what’s billed.
“The day the new premium rates came out, I was on the phone all afternoon,” said Phil Bousquet, president of the Northtown Chapter of the National Active and Retired Federal Employees Association. “They are angry, hurt, fearful, and feel betrayed by the employer. They are concerned that they will be unable to afford their earned health care.”
Meanwhile, small companies that get insurance through local chambers of commerce and other associations are finding narrowed plan features, especially when it comes to prescription drug coverage.
“There’s a lot of anger,” said Rocco Lueck, managing director of HR Benefit Advisors Ltd. in Buffalo, which works with the Hamburg Chamber of Commerce and its members.
The struggle over insurance pricing and options is a delicate dance played out every year, as health costs escalate.
The big three insurers locally said their rates will rise by 10 percent to 20 percent on average next year, with some increases significantly higher. But federal employees were shocked to see that while total rates for Univera’s plans rose about 38 percent, their own contribution to the premium more than doubled from a year ago — even though there was no change to the benefits.
“I WISH my premium went up 10.4 percent,” one retiree wrote in an e-mail to The Buffalo News.
The employees’ share rose from $45 to $92.94 a month for single coverage and from $181.90 to $352.26 for family coverage. Meanwhile, the government’s contribution rose 15 percent from $135 to $155.66 for single coverage and 7 percent from $329.30 to $352.56 for family.
“That is a huge increase for family coverage,” wrote a 53- year-old employee named Michael.
Univera acknowledged the hike, but said it’s a result of higher costs. “The medical expenses incurred in this risk pool have driven rates up significantly in the past few years,” said Pamela J. Pawenski, regional vice president of sales.
Bousquet said the plans offered by Independent Health and Univera have been popular in recent years because of their lower costs and benefits. But unlike Univera, he said, Independent Health softened its increase by increasing or introducing new co-pays.
As a result, Independent Health’s rates rose 11.5 percent for its regular “high” plan and 28.7 percent for its “high-deductible” health plan. And premiums for the nationwide Blue Cross and Blue Shield fee-for-service basic and standard plans — which is also open to members of Congress in addition to federal workers and retirees — rose just 9 percent.
The Blue Cross and Blue Shield standard plan, which is set by the national Blue Cross Blue Shield Association but administered locally by individual companies across the country, made a controversial change to benefits.
Federal workers and retirees now are responsible for paying the full billed amount, up to the $7,500 catastrophic limit, for each surgical procedure performed by an out-of-network doctor. They also will have to pay the full billed cost of anesthesia provided by an out-of-network doctor, up to $800.
Under the plan, surgery includes treatment of fractures and dislocations, biopsy procedures, removals of tumors and cysts, treatment of burns, childbirth and other obstetrical care, and diagnostic colonoscopy. HealthNow has no role in setting these terms.
About half of all enrollees in the Federal Employees Health Benefits Program are in the Blue Cross standard option plan, so the modification created a nationwide uproar, even leading to a congressional hearing.
In response to the criticism, the Blue Cross Blue Shield Association waived the $7,500 payment for standard option participants who are also covered by Medicare. It also clarified that participants will incur lower charges for emergency surgery or surgery performed within 72 hours of an accident.
Still, the federal Office of Personnel Management is giving enrollees until Jan. 31, 2009, to change their coverage.
Meanwhile, small companies and sole proprietorships are frustrated over changes to benefit plans provided through local chambers of commerce.
Until 10 years ago, such plans were the only means for the smallest groups to get group-rated health insurance, with the lower rates and richer benefits that larger companies get. The businesses first had to become members of the chambers or associations, which were also required by insurers to abide by certain rules governing who could qualify and when.
But many businesses and chambers abused the program, insurers say, allowing people to quickly sign up for insurance only when they needed it and then cancel it when they were done. As a result, losses mounted for insurers, which then whittled plans and cut benefits.
Independent Health, for example, used to offer six different plan options for chamber members, but narrowed it to four last year. Now it has just one if the insurance company must compete with rivals, or two if it’s the sole carrier for an employer. Similarly, Univera offers four plans if it’s the sole carrier, but just one otherwise.
Also, all three local carriers are capping prescription drug expenses or mandating the use of mail order for maintenance drugs. Independent Health’s primary plan for chamber members has no dollar limit but covers only generic drugs. Univera and HealthNow have three price tiers, but Univera set a $1,000 maximum and Health- Now requires a $1,500 deductible before coverage kicks in.
Finally, companies with 51 to 99 workers are finding they’re too small to fully benefit from a switch to “experience-rated” coverage — where rates are based on their own past claims.
All three local carriers are refusing to share claims data for such small firms with either the client companies or rivals. That means other insurers can’t properly estimate risk or price policies, preventing rival bids.
The carriers say the small size of the firms makes the data less reliable, and also means that even high-level data without names can still allow employers to figure out which individual workers are costing the most.
Insurers worry that detailed reports would be ammunition for employer witch hunts of ailing employees.
State insurance regulators are looking into the issue, but admit there’s no legal requirement for disclosure. Still, they want to evaluate if the carriers’ reasons for withholding the information are valid.
“We’re aware of this. We’ve definitely had a bunch of complaints about it,” said Troy Oechsner, Health Bureau chief for the state Insurance Department. “We’ve informally asked the plans to do the right thing and continue to provide that information. We’ll do whatever we can within the law to make that happen, and if we need to change the law, we’ll do that.”
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