Health Insurance

Comments on Policies and Costs for Consumers

Walton Francis, editor of "CHECKBOOK's Guide to Health Plans for Federal Employees" was online Tuesday, Oct. 18, at 2 p.m. ET to discuss general questions and answers about health insurance policies and costs for health care consumers.

From The Post:

High Deductible, High Risk (Post, Oct. 18)

Is a High-Deductible Plan Right for You? (Post, Oct. 18)

It Could Be Worse (Post, Oct. 18)

A Bargain, Relatively Speaking (Post, Oct. 18)

Francis is a self-employed economist whose work involves the analysis and evaluation of public programs and government regulation. He has Master's degrees from Yale and Harvard universities. Francis has worked for the Office of Management and Budget, for the Office of the Secretary at the Department of Health and Human Services, for the Centers for Medicare and Medicaid Services and as a private consultant. He pioneered the systematic comparison of health insurance plans from a consumer perspective as the principal author of the annual CHECKBOOK's Guide to Health Plans for Federal Employees. Francis has published articles and testified before Congress on the Federal Employees Health Benefits and Medicare programs. He has counseled thousands of Federal employees and retirees on health insurance through dozens of radio, television and seminar appearances.

A transcript follows.

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Dayton, Ohio: I read today's High Deductible article and was struck by the inconsistent way we use the term "insurance". If I have an auto insurance policy, I know that it's only for catastrophic things. I pay for gasoline, oil changes, new wiper blades, etc. as I need them. They are completely predictable expenses and I don't expect the insurance company to deal with those. Yet somehow we have the perception that medical insurance ought to pay for annual checkups, flu shots, dental cleanings, etc - all completely predictable expenses. What can we do to reset our expectations? Aren't these a big part of our health care problem?

Walton Francis: There are many, and I am one, who think that a big part of the problem is that what we get in most so-called health insurance plans is not just insurance, but also prepaid care. And when it is prepaid, or heavily discounted, the tendency to overutilize is strong. Some estimates are that as much as one-third of health care spending is unnecessary. On the other hand, many people don't get essential care because they are skimping. As in so many other things, there is no simple magic bullet. So-called "high deductible" plans (the deductibles aren't usually all that high) are one possible answer.

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Walton Francis: Okay, I'm online and will answer as fast as I can!

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New York, N.Y.: Our firm has a 55 and ten policy for retirement health insurance. But, at 55 and five, the thought of another five years makes life not worth living. What are our options for buying health insurance on our own?

Walton Francis: It is surprising easy to buy insurance on your own, at affordable prices, for most people. But there is the rub. You will probably not get coverage for a preexisting condition. Try ehealthinsurance.com and see what you can find. Also, most HMOs have an open season where they take anyone at the group rate. Finally, there are many insurance agents who would like to sell you a plan. However, given your age you are not "prime" material. I'd look for a high deductible plan to keep your premiums affordable until you reach Medicare age.

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Silver Spring, Md.: We are NOT federal employees and have pre-existing health conditions, so as small business owners we have HMO coverage. This has worked out, but sometimes it seems like it would be nice to have more choice in the provider. For instance I might like the choice of going to the very best cancer center to treat a chronic cancer condition. With HMO coverage that isn't an option.

Assuming we have the $5-10K required to fulfill the deductible would these high-deductible plans be a way for someone to acquire health coverage and get more choices in physicians? My assumption is that the high deductible could be counter-balanced with a Medical Savings Account, so Uncle Sam would subsidize part of the deductible.

Do these high-deductible plans sell to individuals? Are they fussy about exclusions? Do the doctors have to belong to the plan?

Walton Francis: There is one simple way to get the provider of your choice: just pay out of pocket. That works great for routine care. But if you face something really expensive, you will want to use a preferred provider no matter what kind of plan you are in. Most Maryland HMOs use Johns Hopkins and other premier health centers as preferred, so maybe you should consider changing HMOs.

Yes, you can set up a savings account (now called "HSA") and get tax-preferred spending. Works great for small businessmen. They usually have preferred provider panels, which is actually a bonus because you get the group rate.

Good luck.

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Washington, D.C.: I work for a company that provides great health insurance benefits through a PPO network. Is there a way for the general public to join a PPO, or is the only (affordable) way through an employer? Thank you for taking my question.

Walton Francis: Almost all health plans use PPO panels. Employer coverage usually brings an employer subsidy, and group rates, but there is a thriving market in individual plans. The only real problem, for most, is that your preexisting conditions may not be covered (and almost certainly won't be without a waiting period). Check out the HMO alternative to get group rate and no waiting period.

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Silver Spring, Md.: A comment: be sure to check what is covered by the catastrophic limit! I am a retired government employee who has been seriously ill most of this year. I have GEHA (Government Employees Hospital Association) insurance, which uniformly gets good reviews. However, it's $3000 per year catastrophic limit is a joke. It does not cover, for example, the $350 yearly deductible and the $350 deductible for each hospitalization. Nor does it cover prescription drugs, for which I've paid over $1200 this year, copays for doctors visits, and much more. Bottom line, my out of pocket expenses so far this year are over $7000, with more to follow. Only possible glimmer is that for the first time I'll be able to deduct a fair amount of this as an itemized deduction come tax time.

Walton Francis: This is a common problem. The small print on most insurance plans excludes at least some expenses from the catastrophic guarantee. Usually drug copays are excluded, and you happen to be in a plan with high cost sharing for drugs. As a Fed, you can switch in Open Season. Consider Blue Cross Standard, which as an almost loophole free $4000 limit, if memory serves. Actually, your GEHA experience is about average. Also, you save a lot in reduced premium in that plan, so your grand total cost is not as much higher as you might think. Good luck!

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Northern Virginia: How does a self-employed person go about finding insurance? Are there Web sites or other resources that list plans for comparative purposes?

Walton Francis: There are several good Web sites for locating insurance. I'm partial to ehealthinsurance.com, but you can Google many more. Also, don't forget old-fashioned insurance agents! They sell plans for a living.

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Washington, D.C.: Many medical facilities are now denying MD-IPA, Optinum Choice. Why? Earlier this year MD-IPA had refused to cover some of my prescriptions, even after after the interventions of my physicians. This year, I intend to switch to someone else after 5 years with them. I am thinking about PPO. What is your advice?

Walton Francis: Every HMO and PPO faces issues of recruiting and retaining providers at the low rates they want to pay. Sometimes you as a consumer are lucky and sometimes not. By all means look around. One way is to ask your favorite physicians what plans they will be in next year. I don't understand how a prescription could not be covered if legally prescribed. Sounds like a bureaucratic snafu. Of course, just about all plans pay better or worse depending on whether your drug is, you guessed it, preferred!

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Washington, D.C.: How does/should the Medicare prescription Drug Program impact Federal employees eligible for it? (Also) how does (Is)the prescription drug program interact with Medicare Part B (Do you need part B to use it?) Is part B of any value to Federal Employee (Retirees)?

Walton Francis: Anyone with any Part of Medicare, A or B or both is eligible for the new drug benefit. It is entirely separate from Part B in coverage and cost and eligibility. Part B, for doctors, is of some value to Federal retirees but you will be very unlikely to get back more than about half of the premium cost of (next year) $1,060 for the year. The new drug benefit is Part D. It will rarely be of value for Federal retirees, whose existing drug coverage is much better in all plans. There are some exceptions, however, notably low income retirees and those enrolled in GEHA Standard or Mail Handlers Standard.

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Cleveland, Ohio: The front page of WashingtonPost.com mentions that Open Season is approaching - but I can't find the dates anywhere - do you know when it will be?

Walton Francis: There are lots of Open Seasons. The biggest one in the DC area is for Federal employees and retirees, November 14 to December 12. The biggest of all is the new Open Season for Medicare Part D drug plans, and Medicare Advantage plans. It starts November 14 or 15, I forget which. It ends at various times depending on a particular person's situation, but people should try hard to make decisions by the end of December.

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Self-employed: Don't forget that professional societies often have good plans. The IEEE (electrical engineering society) has wonderful coverage.

Walton Francis: Yes, association plans can be great. They provide a way for small business men and the self employed to get group rates. Anybody eligible should always consider an association plan.

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Severna Park, Md.: Do you recommend High Deductible plans in general, and are there any specifically that are better than the others?

Walton Francis: If you are a Federal employee I compare the high deductible (and other) plans aimed at that group in my annual Guide. If you are privately employed, the employer-funded HD plan (if available) will be a likely no-brainer choice. Otherwise, do some research. Some of the largest insurance companies, like Aetna and United, are actively acquiring and marketing HD plans. Good deals are out there to be found.

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Affordable?: What do you consider "affordable"? I'm a healthy single woman with no pre-existing conditions in her 40s who has been paying $500/month for COBRA - because it was so much cheaper than anything I could get independently.

I'm meeting more and more people who are going without health insurance entirely, because it's so very expensive. I'm looking at that choice for myself.

Walton Francis: I'm sure your COBRA decision was correct. The stark reality is that an individual policy these days runs anywhere from $2,000 a year up to $6,000 (or even more) depending on your age and health. Family policies are rarely under $10,000. That is what it costs. The advantage of COBRA is that you get a group rate, until it runs out. There is however a lively market, especially if you are willing to eschew first dollar coverage and get a reasonably high deductible (not necessarily an HD plan). Rather than go it alone, I would strongly recommend that you find a plan that covers you for catastrophic expenses, even a plan with a deductible of $5,000 or more. If you need it, it will be the smartest decision you ever made.

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Silver Spring, Md.: This may not be completely on point but, a few years ago I dropped FEHBP coverage in exchange for my wife's Montgomery County Teacher's family coverage, thereby saving about $2,000/year for Kaiser coverage. In order to have FEHBP coverage, should I want it, when I retire in five years, I'm required to reacquire FEHBP coverage now and keep it until I retire. Should I? How do you recommend weighing the relative risks and costs of the MCPS system versus the Federal system?

Walton Francis: I don't think there is a better or safer system in the nation than the Federal system. I would rejoin immediately. Just pick a very low premium plan, even if you don't use it. Do you really want to bet your financial future on Montgomery County never cutting back coverage or raising premiums out of sight?

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Manassas, Va.: Needless to say my Blue Cross Blue shield government sponsored health plan has soared over the past decade.

What do you think about the possibility of Senator Hillary Clinton being elected President along with a big change in the Senate and House followed by a successful push to have a universal health care system put into place.

Walton Francis: I don't make political prognostications, but I am willing to bet that whomever is next elected President there will be pressures to change the system in various ways. However, I think that spending more hundreds of billion on universal coverage is among the least likely outcomes, given the current deficit and the Medicare time bomb. I would make my own decisions based on the world as I find it today.

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Philadelphia, Pa.: Sorry if this is overly technical. Will Medicare's formula-driven cut in physician payments (4.3%) in 2006 result in higher costs for the rest of us? Will Congress override those cuts like they have in recent years?

Walton Francis: This isn't technical, but political. I don't know what will happen. One possible and welcome outcome would be for Congress to reduce the pain on physicians who participate in "pay for performance" initiatives. Cost shifting is unlikely, but more physicians will drop out of Medicare or refuse to take new Medicare patients.

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Rock and A Hard Place, Va.: HELP! I have no idea what to do about being uninsured, and this has been the case for the past several years now.

The stats: 34, married, unemployed, ineligible for COBRA or HIPAA or any other assistance, turned down by the usual low-cost insurers for "pre-existings" like migraines & depression, and my husband is a contractor who's lucky he's even covered by his co.

He makes a decent salary, but not enough to cover the insane premiums I'm offered for "high risk" plans - or if I continue to go uninsured and even worse health problems crop up. We've even had to forego starting a family because of this!

The paradox: In order to get a job I need to feel better, but in order to feel better I need a job in order to get health insurance! THIS JUST ISN'T RIGHT! Do you have any suggestions?

Walton Francis: You are a tough case. Have you checked to see in Virginia has a High Risk pool for people like you? Most states do, but details vary widely. Community health centers are an option for outpatient cases. There are many, many jobs that provide insurance and for medium and large employers there are almost never any pre-existing condition exclusions. Think about paying for depression medications out of pocket (some are very low cost), putting a brave face to the world, and look, look, look for a job with health coverage.

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Columbus, Ohio: The new Medicare Prescription Drug Plan is very confusing. I did go online to http://www.medicare.gov/ and get some help. Currently, I take no prescription drugs just over the counter meds for minor aches and pains. My concern, is that down the road, will need this coverage. Is it to my advantage to enroll now?

Walton Francis: Yes, enroll! I don't have time to look up the premiums in the Ohio region, but I will bet there are a couple of plans with premium cost below $20 a month. Run, don't walk, to get a guarantee that you will never be out of pocket more than $3,600 for drugs. Drug costs can run into the tens of thousands. You could consider delaying, and eating the penalty if your costs get to high, but is that sensible? For $200 a year or less you can get peace of mind!

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Silver Spring, Md.: I found today's article about high deductible plans to be quite one-sided. I am a relatively new federal employee that has enrolled in a high deductible plan with a health savings account, and have been extremely happy with the coverage. I am a mid-20s male with no pre-existing conditions, and as such do not demand a great deal of medical services. For those in my situation, I find some of the FEHB high deductible plans ideal. The contribution the government makes to my HSA exceeds my portion of the premium, meaning that I am getting more cash back than I pay in premiums, plus coverage for catastrophic events. Kick in my ability to make additional tax-deductible contributions to the HSA and a decent mix of covered preventive services, and I think the plan is great. The article would have been more balanced if it highlighted the benefits of plans and perhaps interviewed someone that liked their high deductible coverage.

Walton Francis: I agree today's article was overly cautious, to say the least. The people quoted were not fans of these plans, and the real live case study had problems she could have had in any plan. I would go further in my advice even than you. High Deductible HSA plans make sense even for people who aren't particularly young or healthy. Anyone in a high tax bracket (typically older and less healthy) stands to make money over time. The best way to think about these plans is to consider how you will fare in good years, average years, and bad years. Someone who is in a high cost situation will even find them good. Most have a $5,000 catastrophic guarantee, which is better than that in most other Federal employee plans.

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Washington, D.C.: I have been looking at switching to the GEHA HDHP offered in the FEHBP in November, but today's story on how HDHP's work made me pause. My understanding was that if I stayed in GEHA's network, my out-of-pocket cost for trips to the doctor and such was somewhat set, just like my current FEHBP plan. Is this correct, or am I reading the material wrong?

Walton Francis: You are absolutely correct. One of the advantages of HD plans is that if you stick with network doctors (and the networks are broad) you get the network discount. Unfortunately, we live in a world where medicare care prices are not widely available, and consumers find it hard to compare. So the plan does the bargaining for you. I don't know why the Post emphasized an obviously atypical case of confusion. Those kinds of problems occur in all plans, sometimes at great expense (e.g., the hospital is preferred, but not the anesthetist) to those enrolled. By all means enroll in the GEHA plan. We rate it as an excellent buy.

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Pasadena, Md.: As a government employee and a retired military I have been carrying both tricare and health insurance as a government employee. I am thinking about dropping the civilian coverage and just use tricare. Is tricare coverage good enough?

Walton Francis: You are another case of run, don't walk. If you have

Tricare for Life you have a better deal even than that for Federal retirees. You are the only category of Federal retiree who can safely drop FEHBP coverage. Of course, you have to sign up for Part B, but your drug coverage is premium-free.

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Washington, D.C.: I currently am under my husband's very generous health insurance plan, and am enrolled under FEHB just to ensure that I've been in the system for the requisite minimum 5 years before retirement, since his terminates with retirement. Do you know what is the lowest premium FEHB plan for me to enroll in, and am I correct that I need to be enrolled in it in order to be able to have it for me and my family upon retirement? Thanks.

Walton Francis: Good strategy. Yes, you need that five years of unbroken coverage. I don't have time to look up the answer but last year in the DC area the lowest premium plans, taking into account tax-preferred premiums, where Aetna Open Access Basic and Kaiser Standard, both around $500 annually.

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Washington, D.C.: I have the high deductible health plan from GEHA. I don't like it. There are too many administrative hassles. In addition, although I am young and hardly go to the doctor, it is expensive because I am taking a prescription.

Finally, in addition to all the hassles, the bank that holds the health savings account charges for everything.

Next year, I am going with a regular GEHA plan.

Walton Francis: I love to juxtapose your view with the one I just responded to! That is why we have horse races! I'm sorry you've had some hassle, but it can take a bit of time to get used to a new scheme. If your only significant expenses are one prescription (and, I assume, the free annual physical) then I'm not sure why you aren't building up your savings account at a rapid rate. I'd think twice about leaving.

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Washington, D.C.: Insurance companies suck money out of the health care system and provide absolutely nothing in return (at least to the patient). What is the possibility that we can rid our health care system of these parasites and go to a "Single Payer" type system?

Walton Francis: I think the chances of "single payer" in this country are slim to none. But I could be wrong. However, it is not at all clear that government-run insurance would be less expensive to administer. I don't believe that public school systems, the Postal Service, the US Armed Forces, etc. are noted as models of administrative efficiency. I'm agnostic, but would need to see some real evidence before I believed there were big savings lying around. One reform area, well underway, is e-health (eprescribing, etc.) which promises not so much to save admin expenses as improve quality and reduced unneeded care.

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Worried about CareFirst, Washington, D.C.: Just got a letter from my PCP's practice stating that they're dropping CareFirst/BCBS because they are so difficult to work with and are telling them to charge clients on the Federal plan a $250 deductible, even thought there is not supposed to be one. Now I have to look for another PCP, and fewer are taking this coverage, I am finding. Problem is, my company's HR mgr/says all of the health plans stink in their own way. Any comment on CareFirst? I have not been very happy with them.

Walton Francis: I think these kinds of problems exist in all health plans. We heard complaints today about a half dozen plans, of every type! Much of it is a byproduct of plans using preferred provider networks to save money. Premiums would be lot higher than they are if plans paid whatever providers charged. My suggestion is tactical: find a physician or two who you really want, and ask them what plans they will be participating in next year. That may guide you.

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Washington, D.C.: Would you then recommend a high deductible plan for someone, like myself, who is enrolled in FEHB just to ensure protection in retirement, since my husband currently has a very good employee health plan?

Walton Francis: In a case like yours, I generally just recommend the lowest premium plan (see a previous answer). However, you make a very good point. If you join a low premium HSA plan (don't get an HRA for reasons too complicated to explain here), you can build up a tidy account balance while preserving your retirement rights. Aetna, GEHA, and Mail Handlers all offer great deals. Thank you for the suggestion, which I think I will use in my Guide when it goes to press next week!

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Edmond, Okla.: When my medicare coverage begins, is there a federal employee health plan that will supplement medicare, or do I need to look in the private sector for supplemental coverage?

Walton Francis: If you are a Federal employee, you must be enrolled in a Federal employee health plan (or Tricare) continuously for five years before you retire to stay in the program. After that, you stay in the FEHBP. When you turn 65 you decide whether or not use Medicare to supplement the FEHBP plan (not the other way around!). You won't find anything good in the private sector, since it is allowed only to sell Medigap plans, most of which are not worth their premium cost.

However, for all of you non-Feds, or who don't have good coverage from a former employer, starting in 2006 there will be Medigap plans K and L, the best Medigap deals. Also, with Part D drug coverage, it is not clear any Medicare supplement is needed. I certainly wouldn't go for more than K or L plus, of course, Part D.

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Walton Francis: Thank you all very much for your great questions. I hope I've helped. Good luck in hunting for good health plans.

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Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.