Anthem charges the same premiums regardless of whether a policy is new or has been in force for several years.  A 40 year old, healthy, non-smoking male who purchases a policy this month will be paying the same premiums as a 40 year old healthy non-smoking male who has had an Anthem policy for ten years, assuming they both live in the same zip code and have the same type of policy.  Because of this, it’s relatively easy to compare Anthem’s rates – even after rate increases go into effect – with those of other carriers in Colorado.  The rates being offered to new Anthem clients include the rate increases that went into effect in January.

To get an idea of how Anthem’s prices compare with other carriers, I got quotes for a family of three, living in the Denver metro area, for a high deductible, HSA-qualified policy with 100% coverage after the deductible.  These plans are relatively easy to compare, as they tend to be quite similar from one company to another.  I looked for policies with a $5000 or $6000 family deductible (most companies offer one or the other, but not usually both), or something in the middle of that range if neither exact number was available.

Here’s what I found, from several of the top carriers in the Colorado individual market:

• Cigna = $325 (for a $6000 deductible)
• Anthem Blue Cross = $377 (for a $5000 deductible)
• Humana = $402 (for a $5000 deductible
• Kaiser = $441 (for a $6000 deductible)
• Assurant/Time = $449 (for a $5700 deductible)
• United HealthOne (Golden Rule) = $461 (for a $5800 deductible
• Aetna = $481 (for a $6000 deductible)

Obviously this isn’t comprehensive data.  I only got quotes for one family, using a single zipcode.  Factors like pre-existing conditions, tobacco use, zipcode, and plan design all have an influence on premiums.  But these numbers would seem to indicate that while Anthem’s rate increase may have been large, it seems to be in line with what other carriers are charging in Colorado.  For the little test I conducted, Anthem’s premium was the second-lowest I found, and the only one with a lower premium had an additional thousand dollars in out of pocket exposure.

I’ll be curious to see what the Division of Insurance comes up with when they re-evaluate Anthem’s 2010 rates.  My guess would be that they will approve the rates.  If they don’t, it would stand to reason that they will have to also re-evaluate the most recent rate increases for all of the other carriers in Colorado too.

Money was a major factor, on both sides.  People like Primavera (herself a cancer survivor) and the patient advocate groups were likely working with patients’ best interests in mind.  But my guess is that the pharmaceutical industry wanted this bill to pass because they would like the extra revenue that would be generated if all the health insurance carriers in Colorado had to start covering oral chemotherapy.  Estimates from Kaiser Permanente of Colorado pegged the cost of oral chemotherapy at more than nine times the cost of using intravenous chemotherapy.  That would seem like a very good motivator for pharmaceutical companies to get involved.

Of course, those numbers also reflect the reason the bill was killed.  There’s no way that this bill would have passed without premium increases going along with it.  One lawmaker estimated that it would have increased premiums by $147/month for every insured family in Colorado.

Proponents of the bill noted that oral chemotherapy is much less intrusive for a patient: the person can continue to go to work and lead a somewhat normal life, taking medicine at home rather than going to a hospital or clinic for chemotherapy treatment.  For my own family, at-home dialysis has made my father’s life much easier than it was when he had to go to a dialysis clinic three times a week.  So I do understand the desire to be able to take a pill rather than go to a cancer center for treatment.  But while dialysis can go on for years (my dad has been on dialysis for nearly eight years), chemotherapy is a relatively short-term treatment.  I’m sure that people going through chemotherapy would much rather have a more convenient method of getting their treatment, but at nine times the cost, it doesn’t seem that oral chemotherapy would make much financial sense.

Of couse, if there’s a difference in patient survival and overall outcomes, that would be a different story.  But if all we’re looking at is cost and ease of use, I have to say that I agree with the vote in the House committee today.  A measure that would significantly increase health insurance premiums for Colorado residents doesn’t seem like a good idea, especially when there’s a less expensive alternative (intravenous chemo) to the chemotherapy pills.

My concern is that non-profit does not necessarily mean low cost and efficient.  Profit is what is left over after expenses are calculated, and those expenses include everything from CEO salaries to artwork in hospitals.  Another bonus for non-profit health insurance plans – as with any non-profit – is that they can apply to the IRS for income tax exempt status, and many do.  Here in Colorado, Kaiser is tax exempt, and has had to work deals with our insurance commissioner recently to determine how to best utilize the $700 million that they had in reserves.

As a test, I got quotes for myself for a $5000 deductible HSA qualified plan with 100% coinsurance from six different Colorado health insurance carriers: Aetna, Anthem Blue Cross Blue Shield, Assurant, Humana, Kaiser, and United HealthOne (Golden Rule).  The prices ranged from $78 to $130.  Kaiser was $93, higher than Assurant, Anthem Blue Cross, United, and Humana.  So although Kaiser is a non-profit health care system, in the individual market they are not providing less expensive health insurance than the for-profit health plans in Colorado.

I do agree with the rest of the comment: guaranteed issue individual health insurance will only work if everyone is required to buy into the system, and “Who pays the tab doesn’t change the underlying problem that we have runaway demand for very expensive care supplied by an inefficient system.”  One way or another, a lot of reform is needed.

Whatever the reason, I’m sure that the people whose policies were rescinded will be glad to hear the news. Of course by now, some of them may have found other alternatives and might want nothing to do with their previous carrier. Some might have died because they lost access to health care. But because of pre-existing condition underwriting guidelines, many of those people are likely still without health insurance. Kaiser is going to offer their former policy holders an option to buy individual coverage without medical underwriting, and the clients will also be eligible to get reimbursement for up to $15,000 in medical expenses incurred while the coverage was suspended. There are undoubtedly lots of people with claims that were far in excess of $15,000 – since the policy rescissions tended to happen when members started to incur large claims – and those people will have access to an arbitration panel to try to resolve the disputed claims issues.

I’m curious to see how the situation in CA will affect our health insurance industry practices here in Colorado. I firmly believe that health insurance companies should do their homework before approving a policy, and that once a policy is issued by the insurer and accepted by the member, it should be a binding agreement. I know that would cost the health insurance companies more money on the front end, so it’s not a likely scenario. But I’m sure that health insurance carriers all over the country will be using a little more caution in future when they decide to rescind a policy.

If a deal with PHCS is not reached, the closest hospital for many Colorado members will likely be the Good Samaritan Medical Center in Lafayette, which is currently involved in litigation to block a pending sale to the Sisters of Charity of Leavenworth Health Systems. To assist members in transitioning their care, Kaiser Permanente will treat Longmont United as a participating provider through a transition period, giving members the same level of health insurance benefits they have today. This period will extend through April 1, 2008 and applies to all treatments and services received at Longmont United that are covered under their health insurance plan.

Once the transition period ends, any non-emergent care will be covered at the out-of-network benefit level. To be covered at the higher (in-network) benefit level, Colorado members should begin making arrangements to transition their care as early as possible.

Related Post: New Kaiser Permanente Contracts for Longmont and Boulder Valley

Employers and other big purchasers of health care expect much from an injection of consumerism into the market for health services,” but “even the most ardent advocates acknowledge that consumer-directed health care still has far to go before delivering its hoped-for results.

Some states have created quality comparison report cards for health care providers, but many people do not know about them or do not trust them. People still rely on the tried and true method of asking friends, family, and primary care physicians for referrals. And in areas with only one main hospital, it doesn’t really matter what the report card says – everyone is going to use the same hospital if it’s the only choice.

So patients have not become comparison-shopping consumers when it comes to health care. One has to wonder if this will change as time goes by and health insurance premiums continue to rise. When Jay needed to have a lipoma removed last summer, we shopped around extensively. We knew that we would be paying out of pocket, since the lipoma was excluded on our health insurance policy. So we comparison shopped just about every dermatologist in our area of Colorado.

Several months ago, Jay injured his knee, and he decided that it was not getting better on its own. From internet research, he determined that it was likely going to need surgery, which we knew would cost more than our $3000 deductible, regardless of where he went. And we knew that this would be covered by our health insurance. So instead of shopping for cost, he went shopping for quality. He’s currently being treated at the Steadman-Hawkins clinic in Vail Colorado, widely regarded to be one of the best knee treatment centers in the world. Dr. Steadman has put back together quite the hall of fame – John Elway, Kobe Bryant, Picabo Street, Bode Miller, Terrell Davis, just to name a few. And now he’ll work his magic on Jay. He’s on our Humana health insurance network, so once we meet our $3000 deductible, Humana will cover the rest, just as they would have if Jay had chosen to go to the first knee surgeon he found in the telephone book in Denver.

So in both of those cases, we’ve been educated health care consumers, but with two different aims in mind. For the lipoma, obviously we wanted to get the job done right, but it was a relatively simple procedure and didn’t involve any joints that need to last a lifetime. And we had to pay for it ourselves. So trusting that it would get done correctly by whomever he chose, Jay picked the clinic that quoted the lowest price. Which turned out to be not quite true, but that’s another story.

In the case of his knee, knowing that the knee was far more important to his health and happiness than a patch of soft tissue on his back, and knowing that our out of pocket would be $3000 regardless of what network physician he chose, Jay picked the very best doctor he could find. We contributed to our HSA throughout 2007, so we’ll be able to meet the deductible using HSA money, just as the HDHP/HSA system was designed to be used.

When Jay went in for his first appointment last week, the office manager commented on how high our deductible is. Apparently they don’t see $3000 deductibles that often. HDHPs are still not that common, and the majority of people are scared to have a deductible that qualifies as “high.” So it would be unrealistic to expect that we would have turned into a nation of savvy health care consumers by now. But if more and more people start buying health insurance policies with truly high deductibles, it makes sense that costs will go down and quality of care will go up as consumers demand more for their dollars.

All too often, health insurance applications are processed quickly, with the insurance company just taking the applicants statements at face value and issuing a policy based on the answers provided on the application.  More and more applications are being completed on line, with agents no longer meeting face to face with clients.  Just like the person you meet on an internet dating site might not be as tall, dark, and handsome as he describes, an insurance applicant might not be as healthy as the application implies.

One section of all Colorado individual health insurance applications is a release of medical records, which when signed by the applicant, allows the insurance company access to the applicant’s medical history.  People often assume that the insurance company will check medical records before the application is approved, but this is not always the case.  Instead, an insurance company is within its rights to issue a policy based on the information provided on the application, and then do a more thorough review of the client’s medical history if and when the person has a claim.  And the larger the claim, the more likely that right is to be invoked.

I understand that a thorough underwriting process is time consuming and expensive for the insurance company.  And it makes financial sense to issue as many policies as possible – every policy means more premium for the insurance company and a larger group for spreading risk.  And I have no sympathy for people who knowingly lie and misrepresent their medical histories on health insurance applications.  But what about people who genuinely forget details here and there? (after all, ten years is a long time to remember, especially if you’ve had numerous health treatments over the years).  These people should not be given the false sense of security that comes with having an issued health insurance policy, only to have it taken away when they need it most, during a subsequent claim.  It would be better for them to be declined up front so that they could apply for Cover Colorado and know that their coverage is secure.