The State Health Benefit Plan provides insurance to 650,000 teachers, state employees, retirees and their families, and the state hires contractors to run the $3 billion plan.
Last year it paid UnitedHealthcare and Cigna more than $150 million to manage the program, state officials said. In addition, companies running the plan become the sole provider for state retirees buying Medicare supplemental coverage, which can be a highly lucrative business.
Thousands of Georgia teachers and state employees have come down with a serious case of sticker shock from their new health care plans since the start of the year.
To save big money, the state decided to go with a single company to manage the health care of 650,000 teachers, state employees, retirees and their dependents. Blue Cross and Blue Shield of Georgia took over the $3 billion program Jan. 1.
Since the switch, which is not related to the Affordable Care Act, state officials have gotten an earful from teachers and employees who are suddenly having to pay more for the same services they received under the old plan. They’re complaining about higher deductibles, new networks that don’t always include their old doctors and the elimination of copayments, which means they have to pay more upfront — sometimes a lot more — when they or their families seek treatment.
For Ashley Cline, whose husband is a high school science teacher in Cherokee County, the change means paying five times more for occupational therapy sessions for her 4-year-old daughter, who is developmentally delayed.
Under the old plan, Cline paid $25 — her copay — for each one-hour session. Now, she must pay $130 per session. The couple also has to pay a $2,000-per-person deductible before the insurance kicks in, and their monthly premium is about $80 more, too.
“We have to weigh the health and well-being of our kids against our pocketbook,” she said. And that’s “while we’re paying for insurance. It’s disgusting.”
Upset and frustrated by the changes, Cline on Jan. 2 launched a Facebook page for Georgia teachers to share their experiences and advice about the new plans. The site – Teachers Rally Against Georgia Insurance Changes, or TRAGIC – attracted more than 5,200 members in the first week.
Blue Cross said Friday it is reaching out to some of the people on the TRAGIC page. Spokesman Bert Kelly noted that the company conducted 61 pre-enrollment educational meetings statewide to explain the new plans.
Kelly said earlier, however, that Blue Cross is simply providing the plan the state asked for.
“The single-administrator model selected by DCH is part of a national trend of large employers streamlining their health care carriers,” he said..
‘They haven’t had a raise in 4 or 5 years’
State Sen. Brandon Beach, R-Alpharetta, who represents Cherokee County, said he understands why teachers, state employees and their families are upset.
“They haven’t had a raise in four or five years, and now they are having more money taken out of their check and paying more out of their pocket,” Beach said. “They are mad.”
State officials said the government can no longer afford a State Health Benefit Plan that was running deficits of hundreds of millions of dollars in recent years, particularly at a time when all other agencies were cutting back. The new deal with Blue Cross is expected to save $200 million this year.
“Making sure our members get the coverage they need is always our main focus,” said Lisa Marie Shekell, communications director for the Georgia Department of Community Health. “Quite frankly, with the deficits, we couldn’t sustain (the old) system.”
But DCH’s handling of the lucrative health care contract has been a headache for the state since last summer.
UnitedHealthcare, one of the two companies that held the main contract until Jan. 1, protested DCH’s decision to go with Blue Cross, arguing that the agency had engaged in “state-sponsored bid-rigging.” United also argued, as did doctor and teacher groups, that the state’s decision to go with only one health insurance company all but guaranteed that employees would pay more and doctors would receive less.
UnitedHealthcare and CVS Caremark, which lost the plan’s pharmacy business as of Jan. 1, have sued the state, hoping to persuade the courts to throw out the contracts and force the state to rebid the business.
Gov. Nathan Deal said Friday he thinks the losing bidders are ginning up criticism of the plan.
“The party that lost the bid … has attempted to generate this kind of uproar,” the governor said. “I think that’s the genesis of it and in some cases people have been given false information. If there’s a problem, we will address it. But at this point in time many people aren’t aware of the details.”
Attorney Randy Evans, who represents Deal’s campaign, also represents UnitedHealthcare in its suit against the state.
‘I could owe $3,000 tomorrow’
Exactly how the new plan will save money is what has caused consternation. A DCH memo last year said savings would come from reducing payments to doctors and other health care providers. The state would also save by having teachers and employees, who have seen their insurance premiums jump in recent years, pay more.
The biggest change for many is the elimination of copays. The state has typically offered plans that included a standard fixed amount, called a copay, that a patient pays when they go to the doctor. So if a doctor’s visit cost $150, for instance, the patient might pay $35 out-of-pocket.
None of the three versions of the Blue Cross plan — bronze, silver or gold — offers a copay. Instead, patients must pay the full cost of care, say $150 for that doctor’s visit, until their deductible is reached. The insurer then begins to pay a certain percentage of the cost.
On top of that, the new plan has also given many teachers and state workers higher deductibles.
Cherokee County teacher Jennifer Hall opted for a silver plan for her and her 16-year-old son. The monthly premium is nearly $190 cheaper than her plan last year. But without the benefit of copays for doctor’s or ER visits, she has to pay $3,000 out-of-pocket — about $1,000 more than her old plan — before the insurance kicks in.
While Hall will save about $2,200 in premiums this year, that doesn’t stop her from worrying about how she would pay for an expensive ER visit without the $150 copay she used to have.
When her son, a cross-country runner, fell and suffered a concussion last year, the bill for the CAT scan alone was more than $3,000; she ended up paying $600 out of pocket, Hall said.
“He’s an athlete; he could get hurt at any moment,” Hall said. “If there were an emergency, I could owe $3,000 tomorrow.”
‘Savings on the backs of employees’
Besides cost, some teachers and employees say they can no longer see their doctors because they aren’t in Blue Cross’ network.
Evans, the attorney representing UnitedHealthcare, said the complaints about the plan were predictable.
“I think they are confirming what we’ve said consistently,” he said. “There is a huge price to pay for a single vendor, and that’s a lack of competition. It’s a huge price to pay when you’re trying to obtain savings on the backs of employees.”
But to rein in costs, employers across the country are increasingly moving toward similar health plans with high deductibles and no copays, said Tony Holmes, a partner in the Atlanta office of global consulting firm Mercer.
They’re trying to get people engaged in their own care, to understand the cost of treatment, Holmes said.
“There are people who run to the doctor for the sniffles if they have a $20 copay,” he said. They might be less inclined to do that if a $100 fee replaces that copay.
“It’s getting people to learn the cost of the care,” Holmes said.
'Paying way more than we ever have'
In the push toward high-deductible plans, some employers are contributing to health savings or reimbursement accounts that can help employees cover their medical costs.
Workers say, however, it doesn’t take much to burn through those savings.
A woman who posted on the TRAGIC page said one treatment for her son who has cancer wiped out her health reimbursement account.
Cline in Cherokee County said paying for one therapy session for her daughter each week will empty the family’s reimbursement account in a month.
The high-deductible plans often have lower premiums, which can work well for people who are generally healthy and don’t need major medical care. For others like Cline’s family, it’s a bigger financial burden.
“They shoved everybody onto this one plan,” she said. “We’re paying way more than we ever have.”
Politically active groups, like the Georgia Association of Educators, have consistently raised concerns about the changes, and debate over the impact of the new health plan will likely spill over into the 2014 legislative session, which begins Monday.
‘Crony capitalism at its worst’
It also may become a factor in this year’s elections, in which Deal is hoping to win a second term. Roy Barnes found out in 2002 what happens in Georgia when a governor makes teachers angry — they contributed to his defeat that year. Deal’s likely Democratic opponent, Sen. Jason Carter, is touting his support for education and could use problems with the health care plan, if they persist, against the governor.
Democrats argue it’s Deal’s problem to fix.
“It appears to be crony capitalism at its worst,” said Senate Democratic Whip Vincent Fort, D-Atlanta. “The governor ought to get involved and make this right.”
Rep. Butch Parrish, R-Swainsboro, chairman of the House budget health care committee, has a less political view of the problem. He argued that teachers and employees are victims of a bad combination of rising health care costs and falling or stagnant state money to pay for the program.
“I hope the community health board continues to look at this and tweaks it if necessary,” Parrish said. “They are doing this because they are saving a pile of money. If that happens, it’s hard to argue with that. But I have concerns that the savings are coming out of the people paying the premiums and the health care providers.
“I think the jury is still out on this thing and we will have to pay attention on whether these savings are going to materialize.”
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