• Uninsured heart patients find different payment paths

• Health insurance information resources

HAGERSTOWN — Two years ago, CareFirst BlueCross BlueShield told Peter P. Thomas his agency would have to pay 16.4 percent more to keep its workers’ health insurance the same.

To make that more affordable, the Western Maryland Consortium, of which Thomas is executive director, agreed its staff would pay higher deductibles — and still, the premium was 6.9 percent higher than the previous year.

This past year, CareFirst wanted the consortium to pay 22 percent more and, for the new insurance year it began this month, 19.5 percent.

“This is tough,” said Thomas, whose work-force development agency has 18 employees in Western Maryland. “It’s a very expensive proposition anymore.”

“Our employees pay for a portion of it, but each year, we have to make decisions how we’re going to offset these huge rate increases,” Thomas said. “We’re being forced into plans we don’t really want to be in, but that’s all there is. It’s a tough, tough issue.”

Increasingly, companies that offer health insurance to their workers are being hit with such choices, insurance experts say.

“It seems like we’ve been fixed for years on double-digit increases,” said John Schnebly, chief executive officer of Keller Stonebraker Insurance, a Hagerstown-based brokerage that sells others’ insurance products to companies and individuals throughout the area.

“And my thinking is, how long can we sustain this? We are seeing some companies abandon their health insurance plans because the cost has become so prohibitive,” Schnebly said.

Nationwide, the average premiums for employer-sponsored health insurance increased this year to $13,375 annually for family coverage, according to the 2009 Employer Health Benefits Survey. On average, workers are paying about one-fourth and employers the rest.

The 5 percent increase comes in a year when inflation fell 0.7 percent, said the independent, nonprofit Kaiser Family Foundation and the Health Research & Educational Trust (HRET), which did the survey.

“Since 1999, premiums have gone up a total of 131 percent, far more rapidly than workers’ wages (up 38 percent since 1999) or inflation (up 28 percent since 1999),” the two organizations said in a news release.

“When health care costs continue to rise much faster than overall inflation in a bad recession, workers and employers really feel the pain. That’s why we’re having a health reform debate,” said Drew Altman, president and CEO of Kaiser.

Employers growing frustrated

In the 18 years he’s worked for Keller Stonebraker, insurance broker Mike Cumberland has helped many companies design their employee benefits plans.

And, he said, he’s seen their frustration mount.

“For a number of years, a lot of employers have been growing increasingly frustrated at the state of the market when it comes to health insurance. We’ve seen a significant increase in premiums,” Cumberland said.

Even Keller Stonebraker is not immune.

This year, the insurer from which Keller Stonebraker obtains health coverage for its own work force wanted a 33 percent higher premium, Schnebly said.

“But then, after we made some plan design changes and we hired a 25-year-old, it changed some of the census information. So we ended up with about (a) 23 percent” increase, Schnebly said.

To that extent, hiring that younger employee helped, he said.

“Sometimes, it depends on, frankly, what the ages of the group are,” he said.

A year ago, Keller Stonebraker settled for a 13.5 percent increase. And in 2007-08, he said “this is kind of amazing, we were only at (a) 3 percent” increase.

Throughout the area, however, double-digit increases seem to be spreading.

“A lot of employers are faced with rate increases of 20 (percent) or 25 percent,” Cumberland said. “You compound that over a period of years, say, three years, a lot of employers have seen their health care costs double.”

Lest anyone wonder, Schnebly said, insurance brokerages such as his aren’t “getting rich off these increases. You know, the client’s rate might go up 25 percent, but, typically, we might see a 3 1/2 percent increase per head in a given year on an account like that.

“So, our compensation doesn’t float with the increase in the premium,” he said.

To deal with the rising premiums, many employers are passing a greater share of the cost to their workers, Cumberland said. Deductibles and co-pays are rising, and more are setting up health savings accounts so employees can pay the deductibles from their own earnings, set up in the pretax accounts.

Reducing benefits

Across the nation, many companies are reducing benefits, according to the Kaiser-HRET survey.

“Among those offering benefits, 21 percent report they reduced the scope of health benefits or increased cost-sharing due to the economic downturn, and 15 percent report they increased the worker’s share of the premium,” the survey found.

“In 2009,” the organizations said, “22 percent of covered workers must pay at least $1,000 out of pocket annually for single coverage before their plan generally will start to pay a share of their health care bills, up from 18 percent last year and 10 percent in 2006.”

At the Western Maryland Consortium, the deductible increased to $2,000 for an individual and to $4,000 for a family, starting in October 2007, Thomas said.

In 2008, facing a 22 percent increase in the premium, the consortium changed its insurance coverage again. This time, it combined the deductible for its prescription drug plan with its overall medical deductible “so you have to spend the $4,000 family deductible before you would get prescriptions picked up,” he said.

Even with that change, the premium rose 16 percent. The consortium split the added cost with its employees to help them afford it, he said.

And then, for the insurance year that began this month, CareFirst said it would increase the premium 19.5 percent — “if we kept that plan” of keeping the prescription deductible in with the overall medical plan, Thomas said.

To get that lowered to an 8.4 percent increase, the consortium has abandoned its preferred provider plan (PPO) and chosen a health maintenance organization (HMO) plan. The change means, for instance, that now only certain family doctors are “in network”; going to doctors “out of network” costs more.

Now, Thomas said, an employee going to “in-network” doctors and other medical providers pays a deductible of $1,200 for individual and $2,400 for family coverage. But if the employee goes for “out-of-network” care, he or she must pay a separate deductible of $1,800 for individual and $3,600 for family coverage, he said.

If you go for “in” and “out” coverage, the deductibles will total $3,000 for individual and $6,000 for family coverage in the coming year, he said.

“So that means that some people are going to have to give up their primary care physician” because he or she isn’t on the HMO’s “in” list, Thomas said.

“So we got a lesser plan and still ended up paying almost a double-digit increase on the premium,” he said. “It’s double digits every single year and even when you go to the lesser plans, you’re still knocking it down to a sizable increase as opposed to an outrageously large increase.

“It’s clear something has to change. There’s no question that insurance reform, whatever way it comes about, is overdue.”

The uninsured

What frustrates Schnebly is that in addition to the rapid increases in health insurance premiums, there is the huge cost society bears in paying the medical bills of the uninsured.

At a recent Chamber of Commerce forum, Schnebly said, he learned about 760,000 Marylanders don’t have health insurance.

“About a third of these have incomes over $50,000 and could probably afford insurance. Another third qualify for public assistance, but don’t enroll. And the remaining third are the bubble, who may be able, in the right circumstances, to afford it, but have two kids in college” and/or other expenses and decide not to get it, Schnebly said.

“And of course, you’ve got this number bandied about on the national level of 47 million (uninsured) and one would expect the composition of that would be similar,” he said.

Considering all that, along with seeing insurance becoming more expensive and companies dropping it, “I guess my concern is, are those numbers of uninsured going to continue gravitating upwards?” Schnebly asked.

Unfortunately, he said, at a time when Americans need to focus on such facts amid the national health care debate, there “seems to be some hysteria about the costs” of providing insurance for all.

Protesters saying, “‘We’re not paying now for these people who don’t have insurance’ is just ludicrous,” Schnebly said. “We are paying for them.”

In Maryland, hospital rates are set to cover those costs — about $900 million just in the past year for patients who don’t have insurance and didn’t pay their bills.

That could be the most efficient way to cover such costs, he said, but he would rather that the system be examined with a look at requiring everyone to buy insurance, with some paying the full premium and others getting a subsidy, all based on their ability to pay.

“If I’ve got a 25-year-old professional, say an accountant, who doesn’t have a wife and children, who says, ‘What the hell, I don’t need insurance,’ I’m just saying we can’t go on like that,” Schnebly said.

“So my feeling is, we have to have a national template, a financial responsibility standard for each citizen. Just like if you have a car, if you go out and hit someone’s car, you have to prove you can pay the bill” by at least having minimum insurance.

“I don’t think you can go on with people going to the emergency room and saying, ‘I can’t pay.’”

Schnebly said he is not advocating a government insurance company.

“Obviously, we have sort of a vested interest in this,” he said of his own company, “but we think in all this process, there should be a resistance to create a public health insurance company. I don’t feel government can ever be as efficient as private companies in processing paperwork.”

But, he said, major change is needed.

He said that would include “a national template for health care benefits”; an end to insurers’ refusals of coverage for people who have pre-existing illnesses; permission for workers to change jobs and keep the same health care coverage; “reasonable caps” on judgments against doctors; and everyone buying insurance, according to their ability to pay.

Different views

Sarah McWilliams, Jessie Wigfield and Marquita Davis

Sarah McWilliams, 22, of Hagerstown, and Jessie Wigfield, 22, of Shippensburg, Pa., are at or near the same point in life when it comes to health insurance.

McWilliams’ recent graduation from Rollins College in Winter Park, Fla., forced her to leave her father’s insurance plan and get her own.

Wigfield, meantime, knows when she graduates from Shippensburg University next fall, she, too, will have to find her own insurance.

“I heard about it from a lot of graduates before me. They had to get off their family plan,” said McWilliams, who graduated with a degree in theater and has been working part time in medical records for her father, a Hagerstown urologist.

Maryland law does allow a dependent child, regardless of student status, to stay on a parent’s health insurance policy until age 25 under certain circumstances, but McWilliams’ circumstances did not match up.

So her mother, who is a nurse, chose an insurance plan for McWilliams that’s similar to what she had through her father’s policy, she said. She pays part of the premium, and with the difference in policies has noticed “my prescriptions are beginning to get expensive.”

Wigfield, a part-time secretary at Hagerstown’s Memorial Recreation Center, said she has coverage through each of her parents’ plans now.

But she said she knows that after earning a degree in social work, her chances of finding a job offering health insurance likely will be a challenge.

“There’s a lot of nonprofit organizations out there for social work that really don’t supply health insurance for their employees,” Wigfield said. And, if they do, “sometimes, they do charge them a good bit” for the premiums, she said.

The Memorial Recreation Center is one such organization that can’t afford to offer health insurance to employees.

That doesn’t particularly bother Marquita Davis, the program coordinator, who has worked at the center nearly two years.

“So far, it’s not a big problem,” the 26-year-old Davis said. “I just live for today.”

But having insurance could make a difference, she said.

For instance, when she sprained a finger while playing basketball recently, she doctored it herself “because I didn’t have health insurance. That’s why I didn’t go. I knew it would be a couple hundred (dollars).”

Davis said she and her friends don’t talk much about the subject or President Obama’s plan. But she said there is a need for it, particularly in her field.

“I think it’s sad that I’m working with children and I can’t get a decent health plan,” she said. “I think anyone working with children should have a decent health plan. Just to be healthy overall, to give children the best care.”

Janet Martinez

It is close to a year now since Rayloc closed its Hancock plant and Janet Martinez, like hundreds of others, lost her job.

But Martinez, 52, who is taking classes to train for other job opportunities, said she has been fortunate in at least one respect — she has been able to stay on health insurance.

After getting Rayloc’s severance package, “I set it aside so I would be able to afford health care coverage,” she said.

The insurance cost her $396.74 per month — about a third of the $1,300 per month she was receiving in unemployment benefits.

And she received another boost. Because Rayloc’s closing was related to work being lost to foreign competition or being moved overseas, Martinez qualified for a federal Health Coverage Tax Credit that pays 65 percent of her insurance premium.

So what Martinez herself pays has dropped to $138.86 per month.

“It’s extremely helpful for me to be able to afford the health coverage,” she said.

Jim Failor

Jim Failor, 77, retired in 1999 as a mortgage loan officer at Home Federal Savings Bank in Hagerstown.

Interviewed outside Robinwood Medical Center, where he goes for frequent treatments, Failor said he’s satisfied with his insurance plans — Medicare Part A and B, for which he pays out of his Social Security check, and a supplemental policy.

The premiums on both have gone up this year.

He said $96.40 is the standard premium for Part B, but recently, he noticed $38.50 has been added, “probably because my income must be over something.”

The supplemental is through Guaranteed Trust Life, for which he pays $160.39 per month. That’s 12.5 percent more than last year’s rate.

“Normally, these premiums go up every year and I can understand why,” Failor said. “If you go to the hospital, those prices are really going up.”

He said he isn’t sure whether America needs a national health care plan.

He said the idea “doesn’t appeal to him personally ... but people that are younger and have different insurance, I’m sure that they’d have another opinion.”

National health care would change coverage

If Congress can agree on national health care, what changes in terms of insurance would affect us?

For thoughts on this, we turned to Karen Pollitz, research director for private health insurance at Georgetown University’s Health Policy Institute, an independent research group in Washington, D.C.

Pollitz, a former deputy assistant secretary for health legislation at the U.S. Department of Health and Human Services, directs research at Georgetown on health insurance reform issues as they affect consumers and patients.

She also is on call for technical information needed by legislators who are considering the health care reform bills on Capitol Hill.

Asked how a national health care plan would change things in terms of insurance coverage for Maryland, West Virginia and Pennsylvania residents, here’s what she said:

“It would require that everybody have health insurance.

“Secondly, it would expand the Medicaid program in every state for any citizen who has income below 133 percent of the poverty level.

“For a family of three, the poverty level is $18,310 — so 133 percent is $24,352. The poverty level is $22,050 for a family of four — so 133 percent is $29,326. And the poverty level is $10,830 for a single person — so 133 percent is $14,403.

“Right now, Medicaid is only for certain categories — children, parents of dependent children, pregnant women, the disabled and the elderly.

“So, right now, if you’re a working age adult and you don’t have kids, it doesn’t matter if you’re homeless, it’s not for you.

“But if you wipe out those categories and say that anybody who is poor can get health coverage, that’s kind of huge. Most of the uninsured are poor or near-poor adults.

“About a third of the uninsured have incomes below the poverty level and so they would go right into Medicaid in all three states and the federal government would pay for more or all of that.

“Right now, Maryland and Pennsylvania pay half, and West Virginia probably pays about a quarter or a third.

“And for folks who have income above that level (133 percent of the poverty line), we’d all be required to have insurance. And our employers, if we work, would be required to offer us insurance.

“And all health insurance would have to cover a minimum set of services.

“In Maryland now, if you’re out on your own, you can’t buy a policy that has comprehensive prescription coverage. They all have $1,000 worth of coverage, and that’s it — so if you have cancer, you’ll burn that through in a month or two.

“All health insurance would have to cover that stuff that you need. No more bare-bones policies. And no health insurance could turn you down or charge you more because you’re sick.

“And that’s kind of a core deal with the insurance industry: You stop discriminating against people, we’ll make them buy your product.

“And then, the last thing that will happen — and all the details are still being worked out in Congress — if you have low or medium income, (you’ll) be helped to pay the premiums.

“And the subsidy scales vary. They all end at 400 percent of poverty level.

“So with the poverty level for a single person at $10,830 and for a family of four at $22,050, if your household income is four times that (or less), you would get some help paying the premiums.”

In Monday’s Herald-Mail

Costs, causes and effects: Maryland’s largest health insurer posted one of its lowest profits ever last year — even as some of its clients are seeing their highest insurance bills ever.

In Tuesday’s Herald-Mail

Maryland is known across the country for its efforts to control health care costs through the state Health Services Cost Review Commission and through the Maryland Health Insurance Plan.

In Wednesday’s Herald-Mail

Four Tri-State health care professionals — including two hospital officials and two doctors — say they favor health insurance coverage for all.

In Thursday’s Herald-Mail

In recent months, the Community Free Clinic of Washington County has seen an influx of uninsured patients, many of whom are without health insurance for the first time in their lives.