CalPERS Open Enrollment- The Short Answers

Those of you who are State of California employees, or public employees who use CalPERS for health insurance (such as City of Placerville, Garden Valley Fire Department, El Dorado Irrigation District) have by now received the thick stack of glossy paper presentations on your options for health insurance for 2008.

I've already posted on this several times, and have discussed this with lots of patients, many of whom I have known for up to 10 years. I'm definitely getting the idea that any lengthy discussion larded over with HMO-PPO-EPO-IPA-blah-blah-blah is simply confusing, and that the big package from CalPERS can be overwhelming.

So, in a nutshell, here are the Short Answers to the Frequently Asked Questions:

• How do I keep you as my doctor?
• Choose one of the Blue Cross administered PPO choices: PERS Care, PERS Select, or PERS Choice.

• Are you with PERS Select?
• Yes.

• What is PERS Select?
• It's basically the same benefits as the PERS Choice plan, but where the 20% tier of personal costs goes with seeing doctors who are PERS Select doctors.
• I think these are doctors who Blue Cross feels meet some selective criteria for higher quality of preventive care and treatment of chronic illnesses.

• What are PERS Care and PERS Choice?
• These are brand names for two PPO plans through Blue Cross.

• What's a PPO?
• This is health insurance where you can choose your own doctors and see specialists whenever you want.
  
• Annual physicals are covered.
  
• Coverage of medications is typically better.
  
• There is an annual $500 deductible (this is very low compared to most other people's insurance).
  
• After this, you pay 10% (for PERS Care) or 20% (for PERS Choice or PERS Select) up to the annual max. After that, Blue Cross picks up 100% of medical costs.
• Please notice the annual max: you won't be getting a bill for 10-20% of a million dollars in medical care for a medical catastrophe!
  
• This is basically like the insurance plans that employees of smaller employers (like Intel, Bank of America, Microsoft...) get to pick from only with lower deductibles and lower max. In other words, you are on the hook for less money than most folks.

• Will it be hard to see primary care doctors or specialists?
• No.
• Most doctors take Blue Cross.
• Referrals are not required by the insurance.
  

• Should I pick PERS Care or PERS Choice? What's the difference?
  
• PERS Care has higher premiums every month, but it pays for more of your medical care.
• Most folks with chronic medical problems pick this because they know they're going to fully use it.

• PERS Choice and PERS Select have lower premiums, but pay a lower percentage of costs.
• Most folks who pick these are pretty healthy and don't use their health insurance a lot.
• These can also be a good choice for folks who save money well and want to spend less a month on the premiums since they know that if there's a need, they can manage the annual cap, after which point the insurance picks up everything.

• Can I still be on Blue Shield?
• Yes, but only as an HMO which means all your medical care will be down the hill just like with Kaiser.

• I was told that the Blue Shield EPO will still be available in "certain parts of El Dorado county". Is that true?
• No.
• CalPERS press releases state that your EPO has been dropped completely.
• Blue Shield as an HMO may be available in areas close to the border with Sacramento County.

• What if my employer switches to some other insurance?
• Fine by me.
• Most local large employers are very upset with CalPERS, and looking for insurance that most doctors up here already take. They already have stated at meetings that they don't want people to go to Kaiser because it's far and will result in a lot more missed work because of the drive time involved just to get seen.
• For example, EID is looking at benefits through the Association of California Water Agencies which offers Blue Cross.

• What if I am retired or retiring soon?
• Look closely at what you want to have beyond Medicare Part A and Part B (these cover ER, hospital, doctor visits, labs and X-Rays).
• You could easily be better off choosing PERS Choice because it has the lowest premiums, or even dropping CalPERS altogether.
• Medicare Part D (the drug plan) has an average premium of about $40/month.
• The most expensive Medicare supplement (for additional coverage of things like long-term care) is about $80/month.
  

• I have decided to switch to Kaiser.
• I am very sorry to hear that. You will be missed!

CalPERS AND BLUE SHIELD EPO-THE FINAL DEAL

By this time (8/16/07) you have received written notification from CalPERS that the Blue Shield EPO is not an option and reviews your options for the upcoming open enrollment period for 2008.

We are now at the point CalPERS has been moving towards for the past half a decade- you have two HMO choices, and two PPO choices and you are in the unfortunate position of assigning a dollar value to being able to get any medical care outside of the Sacramento- Folsom area.

For those who are not insurance/medical industry professionals,

• HMO (Health Maintenance Organization)
• Usually, but not always, lower monthly cost.
• You have to pick a primary care doctor, whose name has to appear on your card.
• You cannot see a specialist unless your primary care doctor makes a referral to one.
• Medications largely covered, but formulary (list of covered drugs) can be very limited.
• Doctors are salaried (as with Kaiser), or paid a certain amount per patient per month (as with other HMO’s) whether they see you or not. This creates an incentive to avoid seeing you whenever possible, and as quickly as possible otherwise. This pressure in some ways relates to the method of doctor payment, and also because doctors have to take on a lot of patients to offset the costs of sick patients

• PPO (Preferred Provider Organization)
• Usually, but not always, higher monthly cost.
• You may see any doctor that accepts your insurance.
• Formulary of medicines usually less restrictive than HMO’s.

So, this is the deal: you can either choose an HMO (Kaiser or Blue Shield HMO) and go down the hill, or pick a PPO (Blue Cross PERS Choice or PERS Care) and keep your medical care here.

• Your HMO Choices:
• Kaiser
• Well, it’s Kaiser. ‘Nuf said.
• Blue Shield HMO
• I think there are two offices up here that take this HMO, but Lots of Luck.
• You still have to go down the hill for any X-Rays or specialists.
• If you have to go to Marshall ER, your doc will have to work very hard to get you sent down the hill as soon as you are stable.
• You still cannot use Sutter hospitals, which I suppose is fine as long as you never need spine or brain surgery, or never get cancer.
• Your PPO Choices:
• Blue Cross
• PERS offers two flavors called PERS Choice and PERS Care.
• They are pretty much the usual PPO type coverage, but vary between the two of them in premiums, deductibles and co-payments.
• We already have patients with these two insurances, and have had no problems with either.

The bottom line:

If you want to continue to be able to have a doctor where you and your family live, to have a choice about getting blood tests and x-rays (also CT scans, MRI and heart tests) done here and see specialists or use your local hospital it is going to cost more than Kaiser or another HMO. It may not be much more than your current Blue Shield.

We think it’s important to base your family’s medical care where you live, and we hope you will continue to do so since we enjoy having you as our patients. If you were ever unhappy with our care we would want to know about it, but we think it stinks if you have to change doctors because of insurance.

For retirees:

MediCare already covers doctor visits, ER visits, hospitalization labs and tests.

Look very carefully at what you want any secondary insurance to cover such as medicines, long-term care and so forth. It may be that PERS Choice or PERS Care may do this perfectly well, or you may want to investigate the various MediCare supplements such as Part D which covers drugs/medicines or other ones which cover long-term care and other aspects of medical care.

CalPERS: the continuing saga

So far, press coverage (Sac Bee, Sac Business Journal, CalPERS press releases) consistently states CalPERS's withdrawl of Blue Shield EPO from four rural counties including El Dorado.

The pickings have become slimmer with their dropping of Western Health Advantage (WHA). This makes no difference to me, since WHA is another HMO option like Kaiser.

Happily, the plan rates for 2008 are a small increase when compared to every previous year and the rates for Blue Cross PPO PERSChoice and PERSCare are not much higher than for Kaiser.

Specifically, keeping your medical care local (my office, specialists, Marshall ER and Hospital, labs and XRay) can be done. Kaiser is not your only remaining choice. PPO's via Blue Cross allow you to get medical care where you want to (like with the Blue Shield EPO). They are a little more expensive than Kaiser, but not a lot.

If you decide that the extra buck is worth the extra bang, I am happy to continue to be your doc.

So, what about CalPERS Blue Shield EPO?

Well, that's a good question!

Between the newspapers, phone calls, and conversations with patients I think Blue Shield made real efforts to revise their way of running the EPO here to reduce costs. This was at CalPERS's request back around January. They were so far into this that they were mailing contract offers to doctors, and outlining the specific changes: mainly requiring authorization for CAT scans and more expensive tests, and requiring you to see me first before going to a specialist. The first requirement would have been a minor nuisance, the second not a problem. Heck, that's what we're for is to see you if you don't feel well!

However, I don't believe CalPERS had any intention of accepting any offer Blue Shield could reasonably make. I suspect they have a big wave of retirement coming in, and a lot of financial incentive to funnel people into cost-effective (read: cheap) HMO's. They would arouse too much complaint by simply doing away with everything but Kaiser, so they simply keep eliminating every other choice one at a time and jacking up the price on everything else.

Remember two years ago, when you could have brain or spine surgery and cancer treatment at Sutter? How about just before then when you could also choose HealthNet or PacifiCare?

So, now what?

You've got two choices; stay local, or go down the hill.

The two HMO's are Kaiser and Western Health Advantage. Kaiser is Kaiser, 'nuf said. WHA is an HMO based around UC Davis, which is a good place if you have acute leukemia or need a transplant, but otherwise is Big County in my book. I think there may still be one or two docs up here who take WHA, but maybe not.

In any event, WHA means down the hill for any X-Ray, surgery, or specialist. If you go to Marshall ER, a lot of effort will be taken to transfer you down the hill once you are medically stable because Marshall doesn't have a contract with WHA. WHA will therefore pressure them to send you to a hospital where they do have a contract.

HMO'S are cheaper, but you get what you pay for.

BTW, docs get paid by HMO's on what's called capitation. Meaning, the doc gets a dollar figure per patient per month (PMPM) whether any of them are seen or not. Problem is, that's what your insurance company is supposed to deal with; it's called managing risk. In an HMO, then the doc has to manage risk and decide whether you are too ill (expensive) to keep or take as a new patient, and whether to see you (expensive) or treat you by phone. You have to take on a lot of patients to make this risk a safe bet, which is where the stereotypic HMO experience of packed phone lines, impacted schedules, and "I'm Dr. Smith's patient, but I've never seen Dr. Smith" comes from. Do docs learn to game this system? Only if they want to live.

The remaining alternative would be with Blue Cross as a PPO: PERSChoice or PERSCare. Same as with any other cafeteria plan. The PPO means you can go just about anywhere you want (not many docs or hospitals that don't take Blue Cross), but it's more expensive. How much more? If you are a single employee not covering dependents, PERS Choice (less cost, higher deductibles than PERSCare) would cost you $1.80/day more than WHA. Naturally, it's more if you are covering dependents.

So, what to do?

If your employer is local (like City of Placerville, EID) then raise a stink! Being a local employer with local employees and sending them all down the hill every time they become ill, or need to take a sick child to the doctor is crazy and costly in terms of missed work to boot!

If you're retired, do the same! If you live over 30 miles from Sac, how can you be expected to go there for every medical need or problem?

Otherwise, it's all going to boil down to money- yours. You're going to have to look at the cost of a Blue Cross PPO compared to a cheaper down-hill HMO. I know my medical care is better than theirs, I hope you agree and find the additional cost worth the value.