Blue Cross proposes low-cost, limited policy

December 06, 1990|By Peter H. Frank

Looking to ease the ranks of the uninsured and setting up a potentially heated debate in Annapolis, Blue Cross and Blue Shield of Maryland has proposed offering a low-cost, pared-down insurance plan that includes only a fraction of the benefits currently required under state law.

The company, the largest health insurer in the state, said that by reducing the scope of benefits, it would be able to cut premiums by up to half and thereby make health insurance accessible to many of the estimated 570,000 uninsured Marylanders.

The Blue Cross proposal, which calls for a three-year pilot program, was outlined yesterday before a gubernatorial task force known as the Feinblatt Commission, which was created to study a broad range of health-insurance matters and offer recommendations to Gov. William Donald Schaefer.

Though the proposal had been widely expected, yesterday's announcement by Blue Cross was the first time the company had formally pushed for a specific plan.

The policy would cost $65 to $150 a month for an individual, said Carl Sardegna, chairman of Blue Cross and a member of the commission.

Unlike a typical Blue Cross policy, the program would cover a range of preventive medical care items, including physical examinations, immunizations and screening tests, for which the patient would pay $10 for each doctor visit.

However, many benefits that under current state law must be included in other policies, such as those for transplants, in vitro fertilization, mental health and substance abuse, would not be included.

The policy also would limit its coverage to just 10 days of hospital care each year and would not cover any costs that exceed $50,000 in any given year.

"This won't fix all the problems there are," Linda Benedict, vice president of Blue Cross' Individual Market Division, told the commission. "But it will go a long way to fixing some of them."

The Blue Cross proposal, which requires the approval of the General Assembly, is part of a growing trend nationwide that has at least eight states experimenting with ways to provide affordable insurance to millions of uninsured people.

Ms. Benedict told the commission that an estimated two-thirds dTC of the uninsured are employed and that half earn more than $20,000 a year and 20 percent earn more than $40,000 a year.

Although there is a precedent in a number of other states, including Virginia, for trimming benefits to reduce insurance premiums, any attempt to skirt the politically charged list of mandated benefits in Maryland is expected to meet with some stiff opposition during the upcoming legislative session.

"I honestly believe that if this kind of program goes forward that it will be the beginning of the end of all mandates because it will subvert all insurance policies," said Delegate Lawrence A. LaMotte, D-Baltimore County. "In the name of protecting the uninsured," he said, "they are going to destroy the mandates in this state."

Mr. LaMotte, a member of the House Committee on Environmental Matters, which oversees health policy in the state, said that for the eight years he has been in Annapolis, "insurance companies have done everything they could" to get around the mandates.

With 32 benefits that state law says must be either included or offered in health insurance policies here, Maryland ranks second in the nation only to Connecticut, according to Greg Scandlen, director of state research for the Blue Cross and Blue Shield Association.

Blue Cross and others have argued that state mandates account for more than 20 percent of the price of health-insurance coverage. Between 10 percent and 12 percent of the proposed savings under the current plan would come through the exemption from state mandates, the company estimated yesterday.

One of the more controversial aspects of the Blue Cross program, observers said, is the requirement that subscribers must have been without health insurance for the previous 12 months.

"Your real problem is staving off the small businesses that believe that insurance is too burdensome now," said William A. Beasman Jr., former chairman of Baltimore Bancorp and a commission member.

Under the proposed plan, Blue Cross said, it would offer individuals a policy requiring subscribers to pay the first $200 in medical costs and 20 percent of expenses thereafter, up to a limit of $2,000 each year.

To be eligible for the coverage, prospective subscribers would be required to complete a medical questionnaire, known as medical underwriting, after which Blue Cross would have the right not to accept them as customers.

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