Monday, Jan. 17, 2005 | 10:43 a.m.
Anthem Blue Cross and Blue Shield recently launched a new health plan that offers an alternative to traditional plans and near double-digit cost increases.
The company is the sixth carrier to offer health savings accounts and high-deductible health plans in Nevada as a way for employers to control costs and consumers to control their health care choices. Employer-group plans were launched Jan. 1, and individual plans will be available Feb. 1.
"It's a win for a whole number of people," said Joe Hoffman, vice president and general manager of Anthem Blue Cross and Blue Shield in Colorado and Nevada. "The advantage in Nevada is that benefit plans generally haven't been as rich as in the East."
Health savings accounts, which were approved as part of the Medicare Modernization Act of 2003, enable individuals and their families to put tax-free money aside for their medical, vision and dental services, which may or may not be covered under their traditional plans. Employers and employees can contribute to the accounts and any unused money rolls over to the next calendar year. The savings account is portable if an employee switches employers.
The health savings accounts accompany high-deductible insurance plans to cover major medical expenses. The premiums for high-deductible plans are lower than traditional plans, and the policy kicks in after the annual savings amounts for individuals and families have been exhausted.
For family coverage, the minimum deductible is $2,000, and the maximum out-of-pocket cost is $10,000, which includes co-payments and co-insurance. For individuals, the minimum deductible is $1,000, and the maximum out-of-pocket cost is $5,000.
The annual amount that can be contributed to a health savings account is based on the deductible and a figure set by federal law, which for 2005 is $2,650 for individuals and $5,250 for families. Account users cannot exceed the lesser of the deductible and the federal figure.
Anthem, which is a subsidiary of WellPoint Inc., is targeting small employers -- two to 50 employees -- and large employers who want to offer multiple plan options. Anthem's health savings account users would have access to 680,000 providers in the Blue Cross and Blue Shield network nationally, Hoffman said.
Anthem is educating brokers and employers about how its plans work so employers and consumers will understand the cost of the services and the quality of their purchase decisions, Hoffman said.
"People spend more time on choosing a dishwasher than a cardiac service," he said.
Summerlin Life & Health Insurance Co., a sister company to NevadaCare, also offers health savings accounts for small groups, said Larry Hurst, director of government affairs for both companies and president of the Clark County Association of Health Underwriters.
"We think it is a benefit for Nevada business," Hurst said. "The issue is affordable health insurance. The premiums for this type of health product are costs that Nevada employers would be happy to embrace."
Some high-deductible plan carriers offer a co-payment for preventive care instead of requiring patients to pay a full doctor's bill, Hurst said.
Also, health savings account users do not have to choose the same provider for their savings account and high-deductible plans, Hurst said.
Don Giancursio, vice president of sales for Sierra Health Services Inc., said his company plans to launch a high-deductible plan by the end of the first quarter or first part of the second quarter that will be marketed to individuals.
"We think it fits a certain niche," he said. "There's a lot more individuals that might be individual proprietors or don't qualify for group coverage otherwise. We don't think employers would be interested because of the burden that that high deductible might place on a lot of their employees."
He said health savings accounts are a good option for people who have a disposable income and don't have chronic illnesses that would deplete their accounts.
Other insurance providers see it differently.
People with chronic illnesses would have lower out-of-pocket costs because the individuals have a maximum out-of-pocket cost of $5,000 with the savings account and high-deductible plan, compared with potentially higher costs with traditional plans, Hoffman said.
Although there are mixed feelings on whether health savings accounts are good for those with chronic illnesses, insurance experts say the alternative plans do offer a lot of versatility.
Health savings accounts can also be used to pay for Medicare Advantage and Medicare HMO premiums, but not supplemental Medicare plans, Hurst said. Larry Harrison, president of Harrison Insurance Agency and president-elect of the Nevada Association of Health Underwriters, said the savings accounts are a "great savings method for saving for orthodontia or acupuncture." "One of the benefits for the boomer is that they can also purchase long-term care from that savings account," he said.
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