BLUE CROSS: Proposes Lower Premiums To Attract Uninsured
In an attempt to reduce the number of uninsured residents, Blue Cross of California proposed yesterday to reduce premiums and raise deductibles for most of its individual policyholders, the San Francisco Chronicle reports. Under the proposal -- which does not affect subscribers with employer-based coverage -- Blue Cross would consolidate multiple individual policies into seven new programs, which would have the overall effect of lowering the average premium by 15% for two-thirds of policyholders. The other third, however, would have to pay 9% more for their premiums. Under what Blue Cross called one of its "bare-bones plans," a single 40-year-old mother with two children could buy a policy for a $51 monthly premium that would completely cover all "routine doctor visits" in the Blue Cross network. This plan, however, would not cover prescription drugs and families would have to pay a $1,000 deductible for specialist care and hospitalization up to a $2,000-per-family maximum. Mark Weinberg, head of Blue Cross' individual policy division, said, "We believe we're going to get some uninsured people back on board, and more importantly, we're not going to create any new uninsured." The proposal is pending approval from the state Department of Managed Care.
Reaction to Blue Cross' announcement was mixed among health care professionals. Managed Care Director Daniel Zingale, while reserving judgment until he studies its effects on consumers, called the plan a "new and innovative approach." However, Larry Levitt, an insurance analyst with the Kaiser Family Foundation, said the proposal won't entice many uninsured to pay a monthly premium. He said, "They think, 'I'm just getting by, and to spend $50 or $100 a month, maybe I'm just better off rolling the dice that I don't get sick" (Abate, San Francisco Chronicle, 9/28). Jamie Court of the Foundation for Taxpayer and Consumer Rights said the increased deductibles were a bad deal for members: "You're getting a price decrease for a policy that's worth half as much or less. There's been a push over the past few years to push people out of low-deductible policies into high-deductible policies." Weinberg responded that lower premiums and higher deductibles "are the two tradeoffs. You share the first few thousand dollars of cost, and in exchange you get a dramatically lower price," he said (Wolfson, Orange County Register, 9/28).