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Monday, December 9, 2013

Monday, December 9, 2013

Obamacare and UC Care

We're continuing to get mail from all the campuses about the impacts of UC's cancellation of Blue Cross-Anthem and its replacement by UC Care. Most drill down into the kind of detail offered by our Berkeley contributor in October. (If you have already forgotten the blessings of your departing plan, that post chronicled many of them.)  After open enrollment closed at the end of November, a colleague wrote from Irvine:

A group of us just realized that the 20% for use of Tier 2 would affect many people who have dependents living out of state--grown-children students taking a gap year, students in boarding schools, students just graduated.  An accident and hospital stay for these families would be devastating, as they can no longer enroll in the Anthem Blue Cross guest HMO.  And perhaps even worse, retirees on the UC pension living out of state would be in the same situation. I can tell you that my colleagues have no idea of any of this.

Shortly thereafter, one of those out-of-state retirees forwarded an email she'd sent to her campus benefits representative:

I am shocked to learn today that my prescription expenses will increase 500-600% switching from Anthem PPO to UC Care.  While their benefits look pretty much the same on the material sent to us, it is not quite the case when you dig in. It comes down to this in my case: Anthem calculates a $45.00 copay for drugs that are not on their "preferred drug list" while UC Care, via Blue Cross, calculates a 20% co-insurance for a drug that is not on their list, with a $3000.00 maximum.  I have to have shots that are not on either insurer's lists and that cost $1800.00 to $1900.00 a month.  Under Anthem I was paying $45 x 12 = $530 a year. Under UC Care I would have to pay $1850 x  20% x 12=$4440, meaning each year I will pay the $3000.00 maximum.

I found this out just today from one of the "Concierge" at Blue Shield and I find it simply outrageous.  It is outrageous that we are told that coverage will remain pretty much the same, outrageous that UC Care manages to hide so well the real costs to us, outrageous that Oakland did not notice or chose not to notice the real costs to its faculty and retirees. My question to you: is there something you can do about this? and if not, what do you suggest that I can do? 

The answer appears to be no. This is a sizable pay cut, particularly for a retired person.

The UCSB Faculty Association wrote a letter pointing out that UCSB employees are still without local Tier 1 hospitalization under UC Care. It included this summary:

All is, of course, not lost.  If you are insured as an individual, your Tier 2 co-insurance contributions are capped at $3,000.00 per year.  After that, UC Care pays for everything.  Were you also to sign up for an HRA spending account, you could accumulate $2,500.00 in tax-free dollars each year to help with co-insurance costs, and save a little money that way.  Still, many of us would find being out-of-pocket for @$2,200.00 an unwelcome challenge in these diminished times.  Note, too, that the Tier 2 cap for families is much higher than the cap for individuals.  And should we need, while in hospital, to consult a doctor who is not a designated UC Care provider, we would still be responsible for 50% of those costs.  

UCOP officials insisted that UC Care was not about shifting health costs from employer to employees, and the initial publicity spotlighted the drop in monthly payments in moving from Anthem to UC Care.  But sizable cost shifting is indeed occurring, with the burden shouldered first by the chronically (if non-catastrophically) ill, and those with serious but manageable permanent conditions.

What is happening with the project of Tier 1 hospitalization that I noted a couple of weeks ago was still incomplete? The short answer is nothing for this year.

There is now better information than there was last month.  One can find lists of participating hospitals, like this one for UC Riverside. The list seems OK when one reads it from somewhere else, but as the $4400 prescription writer pointed out, the picture changes when one gets past the material to the nuts and bolts.  Riverside's Tier 1 UC Medical Center is in Irvine, not Los Angeles.  In addition, a staff member at UC Riverside reported,

Riverside Community Hospital, the best hospital in the area and a partner with UCR's new medical school, is not included in Tier 1 (UC Select).  If enrolled in UC Care, the faculty in the Medical School will not be able to use the hospital where they're training their students, unless they're willing to pay Tier 2 copayments.  The nearest UC Select hospital, Parkview Community Hospital, does not have a trauma center.

The only hospital in Davis is not in Tier 1, Santa Cruz staff will be driving to Palo Alto for Tier 1 clinical care, and so on. Various complaints we've received suggest that staff at the non-metropolitan campuses will pay more to use UC Care locally. 

In Santa Barbara, the inclusion of Sansum Clinic in Tier 1 was the result of an executive buy-out for 2014.  The deal is off for the years following, pending more successful negotiations.  Cottage Hospital is accessible through Health Net and through Tier 2, but it appears to have had no interest in negotiating Tier 1 with UC.  I was told that UCOP was looking for a per-patient employer payment keyed to their stated costs at the nearest UC Med Center, and the Sansum wanted 50% more.  UCOP apparently was willing to do a one-year top-up for UCSB employees with Sansum, but not with Sansum and Cottage.

I suggested a version of this employer buyout of employee deductibles on the principle of insurance cost pooling, in which individual and group differences come out in the wash. I conclude from my conversations that UCOP rejects this principle and continues to see the UC system as a set of separate cost pools for the purposes of health insurance.  As UC Care continues into out-years, Individual campuses will be expected in effect to self-insure and cover their own costs--except that UCOP controls the overall structure and will not support campuses in cutting their own deals with local providers. In a sense, this is worst of both worlds: UCOP not delivering on the savings of "strategic sourcing," which is supposed to give everybody volume discounts, but individual campuses can't go it alone with local medical groups whom they generally know face-to-face.

UC Care isn't the only insurance system whose opacities take time to penetrate. The New York Times ran a piece today on unexpectedly high costs with Obamacare plans--which are not designed by the government, but by private insurance companies. Here is part of the article:

Insurers devised the new policies on the assumption that consumers would pick a plan based mainly on price, as reflected in the premium. But insurance plans with lower premiums generally have higher deductibles.

In El Paso, Tex., for example, for a husband and wife both age 35, one of the cheapest plans on the federal exchange, offered by Blue Cross and Blue Shield, has a premium less than $300 a month, but the annual deductible is more than $12,000. For a 45-year-old couple seeking insurance on the federal exchange in Saginaw, Mich., a policy with a premium of $515 a month has a deductible of $10,000.

In Santa Cruz, Calif., where the exchange is run by the state, Robert Aaron, a self-employed 56-year-old engineer, said he was looking for a low-cost plan. The best one he could find had a premium of $488 a month. But the annual deductible was $5,000, and that, he said, “sounds really high.”

By contrast, according to the Kaiser Family Foundation, the average deductible in employer-sponsored health plans is $1,135.

UC Care deductibles are lower than these, but the lower-premium higher-deductible is the same.  The scheme is souring potential beneficiaries on Obamacare, and it's not helping relationship within UC either. 


Anonymous said...

At UCSB, I ended up going into the Blue & Gold HMO… had been in the Anthem Plus HMO. Although all the websites side my primary physician was in both HMO's, when push came to shove, he dropped me because I'd changed HMOs. So, this change at UCSB cost me my primary care physician with whom I'd been for 16 years. Not fatal, but the traveling road show of vice presidents etc from Oakland made no mention of this problem.

Anonymous said...

"Santa Cruz staff will be driving to Palo Alto for Tier 1 clinical care". That's not quite right, we have Tier 1 care for Dominican Hospital and for the largest medical group in town (which is called Palo Alto Medical Foundation, because Santa Cruz Medical Foundation merged with them a few years ago). We do have to drive (or be flown by helicopter) over the hill for trauma care, but that's because Santa Cruz County has never had a trauma center, not because of changes in the health insurance.

UCSC administrators managed to negotiate (or get UCOP to negotiate) a deal so that PAMF doctors would be Tier 1 in UC Care, replacing the Health Net HMO plan that was the most popular of the healthcare plans here. Almost everyone at UCSC has to change medical plans this year, but the plans are not much worse than the old ones.

I ended up opting to take a somewhat higher risk and just get UC Core—the UC Care plan is way over-priced. I can remember when UC would pay the price of the lowest cost HMO at each campus—which now costs about $5000 a year here.

Chris Newfield said...

thank you for the fix on the UCSC news. I've belatedly found the UCSC HR list at http://shr.ucsc.edu/benefits/ben_news/oe_2014.html

California Policy Issues said...

The various emeriti groups are trying to track what happened to out-of-state retirees. They are being given a fixed dollar amount from UC to spend and the phone number of an outside consultant that is supposed to advice them on options on local state exchanges. Exactly what is available and what is the quality of the advice is uncertain. At a recent Regents meeting, there was a hint that this model (fixed dollar, outside consultant) might eventually be applied to all retirees (i.e., it would include California residents). Apart from the issue of the quality of advice from the consultant, the change is a switch from defined benefit to defined contribution.

Susan said...

We were just notified that if you enrolled in the wrong plan (or realized that you should have made a different choice) you may be able to change plans. I guess they know it's a mess!

Chris Newfield said...

yes on all counts. anyone interested in health care for all retirees should absolutely listen to Dan Mitchell's clip on the discussion at http://uclafacultyassociation.blogspot.co.uk/2013/11/listen-to-regents-discuss-retiree.html UCOP is clearly piloting this offloading policy for the whole retiree population (although Dwaine Duckett said he wouldn't use the word "pilot"). I'll have another post this weekend

Anonymous said...

Tier 1 is a scam as well. Ok, my son had a minor outpatient "surgery" -- an upper GI which took about 5 minutes under minor sedation. It was at Rady Children's hospital, which is a tier 1 facility, and the Dr performing it was also on their tier 1 list, and I triple checked with Blue Shield. Of course Rady billed $16k for this "surgery" which is absurd in itself, but anyway, according to the plan it should be $100 for "outpatient surgery" so they bill me $100. Well, low and behold, a month later I get a bill from the Anesthesiologist for $600, only $300 of which is covered (i.e., $250 deductible + 20%). So in reality, the copay for this single procedure is in fact $400, which is about what the procedure should actually cost but that's another story. This reminds me of balance billing where they swipe you with out of network providers in your in-network hospital that you have absolutely no control of. Why don't the anesthesiologists work for Rady's? who knows. Why does UCCARE think it makes sense to contract with a children's hospital but not contact with the anesthesiologists that work there? Who knows. Well, we do know, they didn't bother to think it through much like the rest of this plan. Of course I will fight it and try to work it out and see what happens but it is quite absurd that on top of the high premiums I am being asked to pay $400 for a minor procedure for which the prior plan (Blue cross plus) would have cost $0. Now imagine you go for something serious that 20% will be a whole lot of money. Let alone if some random Dr walks in who happens to be out of network, then they can hammer you for 2 deductibles and 50%. Not happy.

Chris Newfield said...

many thanks for sharing this experience--the details are very important. I'll forward it to some admin who are still working on fixes. I'd like to keep gathering stories like this about how UC Care is actually working for people.

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