Employee health care costs to rise

University employees, retirees and their dependents who used the program will pay between 18 and 30 percent more for comparable health care. Costs for those graduate students who must pay for insurance will go down.

The University Board of Regents approved the sale of M-CARE last fall to the non-profit Blue Care Network of Michigan, a subsidiary of Blue Cross Blue Shield. More than 200,000 people currently subscribe to M-CARE health insurance plans, including 60,000 University employees, graduate students and retirees, as well as their dependents.

As a result of the sale, the three M-CARE insurance plans will be consolidated into a single plan called Premier Care, meaning the roughly 26,500 employees with contracts for these three programs will have to decide by Oct. 19 whether the new plan is best for them. Monday marked the start of open enrollment, a two-week period during which employees can select their insurance plan for 2008.

Employees don’t have to enroll in a Blue Cross plan. The University offers three other health care plans through other companies.

Employees who don’t select a new plan will be enrolled in the Premier Care plan by default.

For most of them, that won’t be a problem. The Premier Care plan is modeled after the M-CARE Health Maintenance Organization plan, which is the most popular of the three options, University Benefits Manager Brian Vasher said.

But employees currently using M-CARE’s HMO, Preferred Provider Organization and Point of Service plans will have to pay more for equivalent care next year.

Coverage for only an employee under the Premier Care plan will cost $17.88 per month, an 18 percent increase over the HMO plan this year. Coverage for an employee, a spouse and children will cost $195.86 per month, a 22 percent increase.

While the Premier Care plan will suit the needs of most employees currently subscribed to the M-CARE HMO policy, many of the 2,100 PPO contract-holders and 3,100 Point of Service contract-holders will want to pick a new insurance plan to fit their needs, said Laurita Thomas, the University’s associate vice president for human resources.

Those who want to continue with a PPO plan can switch to the Blue Cross Blue Shield PPO, which will cost $85.04 per month for an employee and $385.29 per month if a spouse and children are also covered. Those plans will cost almost 30 percent more than their M-CARE equivalents did this year.

But the cost of Blue Cross’s own, existing PPO plan will only increase by between 1 and 9 percent from this year to next year.

Thomas said the sale of M-CARE to the Blue Cross Network isn’t responsible for the increase in the cost of insurance for University employees, though.

“Health care costs are rising,” Thomas said. “It’s a national issue – it’s not just a local issue.”

Members of the Senate Advisory Committee on University Affairs, the University’s main faculty representative body, told benefits managers at a meeting on Monday that they were concerned that University employees will now have fewer options when choosing insurance plans.

The Point of Service policy, which combines elements of HMOs and PPOs to give employees more options when selecting out-of-network healthcare providers, will no longer be offered after this year. No new plan is being offered to replace it.

The plan was too expensive for the Blue Cross Network to maintain in light of a shrinking number of subscribers, Vasher told SACUA members. The number of employees using the Point of Service plan has decreased by about 55 percent in the last several years, he said.

Thomas said the Blue Cross PPO plan offers employees the same level of flexibility with their health care providers as the Point of Service plan. That plan will cost between 25 and 30 percent more than the Point of Service plan did this year, though.

“They still have access to the physicians that they want to use,” Thomas said. “It does cost us more to have that choice, and they will have to make that decision.”

The switch from M-CARE to Blue Cross has forced many employees to find out whether their current doctors are covered under the new plan. In some cases, they aren’t.

SACUA Chair Charles Smith said he knows a pregnant woman who had to make arrangements with Blue Cross because her chosen obstetrician works for the St. Joseph Mercy Health System, which is not a member of the Blue Cross network. She is due to give birth in January, shortly after the new plan takes effect.

While the woman’s bills were going to be covered by M-CARE, her delivery wouldn’t be covered by the Premier Care plan unless she switched to a different obstetrician or switched to a PPO. Because employees can only change policies once per year, the extra $68 per month for a PPO policy would cost her about $800 over the course of the year.

Some employees living in Toledo and elsewhere out of state have complained that the new plan forces them to change physicians because the Blue Cross Network only has contracts with care providers in Michigan.

Thomas said the Blue Cross Network is reviewing similar cases and making exceptions on a case-by-case basis for the transitional period. The woman can keep her obstetrician and the Toledo residents won’t have to change physicians, Thomas said.

“It is our intent to provide superb customer service,” Thomas said.

Insurance cost increases

The sale of M-CARE, the University’s health care program, goes into effect on Jan. 1. When that happens, many University employees will see higher insurance costs.

18-22:

Percent increase in cost from the M-CARE Health Maintenence Organization plans offered this year to the Blue Cross Blue Shield Premier Care plans replacing it in January.

27-30:

Percent increase in cost from this year’s M-CARE Preferred Provider Organization plans to next year’s Blue Cross Blue Shield PPO plans.

The exact cost increases depend on whether an employee has a spouse, children, or both.