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Employers

Employer Bulletin

State Employers
Vol. 20, State E
October 20, 2003

Bulletin Provides State Maintenance Plan and Uniform Benefits Comparative Information

This bulletin article provides a comparison of the 2004 Uniform Benefits (UB) to the State Maintenance Plan (SMP) and the Standard Plan. Employees affected by the withdrawal of CompcareBlue North and its replacement with SMP in those counties where no qualified Tier 1 Health Maintenance Organization (HMO) is available in 2004 have raised questions regarding the two plans. Please distribute the following to employees who have questions regarding SMP during the Dual Choice enrollment period.

Why is SMP being offered and why did CompcareBlue North withdraw from the plan?
The Group Insurance Board's new 3-Tier employee contribution structure provides the lowest employee contributions for health plans in Tier 1. In response to concerns that all employees have access to a Tier 1 plan, the Board determined that SMP would fill that role. For more than 20 years, SMP has filled that role in the State employee's program under the 105% formula.

Some of the major providers in the northern part of the state are among those with the highest cost. CompcareBlue North decided it could not offer its plan at a premium rate low enough to be in Tier 1, and withdrew because officials there felt it would not be competitive. Had the plan remained in the program, it would have been at a Tier 2 or Tier 3 level, and the Department of Employee Trust Funds (DETF) would have placed SMP in these counties to offer a Tier 1 plan. Over the past several years, other plans in these northern counties have made similar decisions to withdraw.

The Board is concerned that lack of competition among providers is causing fewer choices of health plans for members. Since we have no relationship with physicians and hospital groups, we must rely on our health plans' abilities to contract with providers to create additional offerings.

Is Uniform Benefits a better plan than SMP?
That depends on each individual's personal situation. While there are differences between UB and SMP, the value of the benefit package is substantially equivalent. Although SMP has an up-front $100 deductible, a change from UB to SMP may result in lower out-of-pocket costs for some members. For example, SMP has higher benefits than those of UB in the following areas:

  • UB has a $40 emergency room (ER) copayment every time the ER is used unless the individual is admitted to the hospital. SMP has no ER copay.
  • SMP offers preventative dental care for children under 12. Dental coverage is not available under UB, though some plans offer it as an option.
  • SMP has a better benefit for:
    • home health care;
    • physical, speech and occupational therapy;
    • durable medical equipment;
    • inpatient mental health coverage up to 120 days;
    • and oral surgery.

While we recognize that SMP has lesser coverage in other areas, such as hearing aids (one every third year) and no copays for outpatient treatment of mental health/alcohol and drug abuse, the overall value of SMP is fundamentally the same as UB.

Is there a profit margin on the SMP plan?
This is a self-funded plan so there is no margin for profit. All premiums go to pay claims with a small fixed fee paid to Blue Cross & Blue Shield United of Wisconsin (BCBSUW) for administration services.

Why did the Group Insurance Board (GIB) make changes to the current SMP plan?
The Board approved the redesign of SMP effective January 1, 2004 to make the plan design:

  • More closely aligned with other plans in Tier 1;
  • Easier to understand and use;
  • More cost effective.

1. Why was SMP given Tier 1 status and how was it made to more closely align with other Tier 1 plans?
In response to concerns that all employees have access to a Tier 1 plan, the Board determined that SMP would fill that role. However, SMP's current structure does not meet the criteria of a Tier 1 plan based upon its efficiency, provider discounts, and other criteria. In fact, the Board's actuary originally recommended that SMP benefits be subject to significantly greater deductibles in order to make it a true Tier 1 plan. This was due to the substantially higher cost of many of the providers that are covered under this plan. The SMP plan design was modified by adding an up-front deductible and a specialty care and hospital network to bring it closer to the level of efficiency of a Tier 1 plan. While the changes adopted still do not result in the classification of a true Tier 1 plan, they do bring the plan closer to that tier. In any other area, SMP would cost employees more in monthly premium than it does now.

2. How is SMP easier to understand and use? SMP's current plan design includes a deductible and coinsurance that applies only to major medical services. It does not apply to hospital or professional charges. This type of plan was common in the 1970s. Health insurance has changed dramatically since that time, and SMP has become one of the few of its type remaining in the marketplace. With this change to an up-front deductible along with no coinsurance on all services (except for nervous and mental/drug and alcohol treatment), we hope our plan will become easier for members and providers to understand and use.

3. How do these changes make the plan more cost effective and affordable? Nationally, health insurance costs have been rising at double-digit rates for the last four years and this trend is expected to continue for several years to come. Over a year ago, the GIB, which manages the state employee health insurance program in conjunction with DETF, studied ways to hold down the rapid increases in health insurance costs for state employees. The referral and network changes made to the SMP plan will result in a plan more comparable to an HMO, and should result in a more efficient plan with better provider discounts. The change to an up-front deductible and no coinsurance helps to keep the cost of administration down. As the plan saves money, future increases would reflect the savings.

Please contact Bill Kox, Division of Insurance Services, at (608) 266-0211 if you have questions comparing the SMP with other plans.

COMPARISON OF STATE PLAN TYPES FOR 2004

The Chart below is designed to help you compare benefit between Uniform Benefits, SMP, and the Standard Plan.

All plans listed below are substantially equivalent in the value of their benefits.

  • Plan benefits vary and in places any one plan may contain a benefit that is better than that of a different plan.
  • Although HMOs offering Uniform Benefits may appear in either Tier 1, 2 or 3, plans in Tier 1 have the most cost-effective contracts with their providers. Plans with less cost effective contracts fall into other tiers.
  • SMP is designated as a Tier 1 plan in counties where no qualified Tier 1 plan is available.

This outline is not intended to be a complete description of coverage. For details, see specific language in Uniform Benefits and the SMP and Standard Plan booklets. Wherever percentage of payment is listed, it means percent of charges. Out-of-network charges may be subject to Usual, Customary and Reasonable (UCR) determination. All services subject to medical necessity.

BENEFIT

UNIFORM BENEFITS

SMP

STANDARD PLAN

In Network

Out of Network

Annual Deductible1 (ded) No deductible $100 individual /

$200 family

$100 individual /

$200 family

$500 individual /

$1,000 family

Annual

Co-insurance2 (coins)

As described below None None 80% / 20%

Annual OOP maximum (includes deductible):

$2,000 individual /

$4,000 family

Lifetime Maximum $2 Million $2 Million $2 Million $2 Million
Hospital Days No day limit 365 per admission 365 per admission 365 per admission
Emergency Room $40 copay per visit 100%, no copay 100%, no copay 80%, no copay
Ambulance Service 100% 100% 100% 80%
Transplants

(May cover these and others listed)

Lifetime benefit of $500,000

Bone marrow, musculoskeletal, corneal, kidney, heart, liver, kidney/pancreas, heart/lung, and lung

100%

Bone marrow, musculoskeletal, corneal, and kidney

100%

Bone marrow, musculoskeletal, corneal, and kidney

80%

Bone marrow, musculoskeletal, corneal, and kidney

Mental Health3 Inpatient 30 days

Outpatient 100%

Transitional 100%

Inpatient 120 days

Outpatient 90%

Transitional 90%

Inpatient 120 days

Outpatient 90%

Transitional 90%

Inpatient 120 days

Outpatient 90%

Transitional 90%

Alcohol, & Drug Abuse3 Inpatient 100% to $6,300

Outpatient 100% to $1,800

Transitional 100% to $2,700

Inpatient 90% to $6,300

Outpatient 90% to $1,800

Transitional 90% to $2,700

Inpatient 90% to $6,300

Outpatient 90% to $1,800

Transitional 90% to $2,700

Inpatient 90% to $6,300

Outpatient 90% to $1,800

Transitional 90% to $2,700

Hearing Exam 100% Benefit for illness or disease, 100% Benefit for illness or disease, 100% Benefit for illness or disease, 80%
Hearing Aid 80% up to $1,000 per ear, every 3 years No benefit No benefit No benefit
Routine Vision Exam One per year One per year for children under 18, 100% No benefit for routine No benefit for routine
Skilled Nursing Facility

(non custodial care)

120 days per benefit period 100% for 730 days per admission less hospital days used 100% for 730 days per admission less hospital days used 80% for 730 days per admission less hospital days used
Home Health

(non custodial care)

50 per year; Plan may approve an additional 50 100% for 365 days less hospital days used 100% for 365 days less hospital days used 80% for 365 days less hospital days used
Physical / Speech / Occupational Therapy 50 per year; Plan may approve an additional 50 100%, no limit on visits or days 100%, no limit on visits or days 80%, no limit on visits or days
Durable Medical Equipment 20% co-insurance, $500 OOP maximum 100% 100% 80%
Hospital Pre-Certification Varies by plan Advantage Program for inpatient stays. Voluntary 2nd surgical opinion Advantage Program for inpatient stays. Voluntary 2nd surgical opinion Advantage Program for inpatient stays. Voluntary 2nd surgical opinion
Referrals In network varies by plan. Out of network required. In network not required. Out of network required. Not required Not required
Primary Care Provider Varies by plan Primary care clinic required Not required Not required
Treatment for Morbid Obesity No benefit No benefit 100% 80%
Oral Surgery 11 procedures 23 procedures. 100% 23 procedures. 100% 23 procedures. 80%
Dental Care Varies by plan Preventative up to age 12, 100% No benefit No benefit
Prescription Out-of Pocket Maximum4 $300 individual /

$600 family

$300 individual /

$600 family

$1,000 individual /

$2,000 family

$1,000 individual /

$2,000 family

1 Deductible applies to all services except mental health

2 Coinsurance applies to all services up to the listed out-of-pocket maximum, then 100%

3 Any benefits paid for mental health during the year will be applied toward the alcohol and drug abuse maximums.

4 Separate from other out-of-pocket maximums, such as the medical

 

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