Health care costs affect everyone. The Congressional Budget Office estimates that Americans will spend $2.5 Trillion on health care in 2009. This means most Americans are going to pay about $9,500 more for health care in 2009. This includes premiums, cost-sharing amounts like deductibles and copayments, and charges for non-covered services. Although the expected increase of six percent over 2008 health care expenses, this is a lot less than the almost 15 percent increase in 2002. Still, many employers and employees are concerned because of the current economic issues and the fact that the six percent increase is twice the rate of inflation.
Like most health insurance companies, our goal is to provide coverage that our members want and to keep it affordable. The increase in medical costs also takes money out of your budget when premiums and out-of-pocket cost-sharing amounts increase. And health care providers want to make sure they are paid for their services so they can continue to provide care to everyone. We have to aim for a balance that allows insurance companies to pay for medical care without making out-of-pocket costs so high members do not get the needed health care.
Why Is Health Care So Costly?
The rising cost of health care is the result of many things, including the following:
- New Medical Technology and Prescription Drugs: The treatment of illnesses is now high-tech. The new drugs and surgical therapies developed within the last decade greatly improve the quality of life and prolong life for patients with procedures such as organ transplants. And diagnostic tools, like a Magnetic Resonance Imaging (MRI) machine, make diagnosing conditions easier. All this new technology and procedures contribute to the rising cost of health care.
New drugs are developed to improve the treatment of many conditions and to give patients hope of recovery. In addition, new drugs sometimes replace an older, less expensive drug. These new drugs benefit patients with cancer, heart disease and other conditions. Without some of these new drugs, patients face a certain death. Drug companies invest a lot of money in the research and development of new medications. Once a drug has FDA approval and is ready for the market, the price includes a return on their investment. - Population Changes: A substantial part of our population is getting old. And when the population ages, the medical costs generally rise as well because an aging population needs more medical care than a younger one.
- The Cost of the Uninsured: There are over 45 million Americans who for many reasons do not have health insurance. Most Americans have health insurance through their employers and many individuals lose their health insurance when they lose their job. This means that the number of uninsured may continue to rise this year. A new report released on March 24, 2009 by the Center for American Progress (CAP) in Washington, DC, found that many hospitals and physicians pass along the cost of treating the uninsured to insured patients.
What Are We Doing?
Your health is important to us and we want to keep you healthy. We want to make sure you and your family get the health care you need. So, we actively work to help control health care costs.
For our members, we offer many preventive and health services. This includes our WalkingWorks program and our Blue Health Assessment. Preventive care is important not only to keep you healthy but to discover any illnesses at an early stage. This increases the chance of recovery and decreases the length and cost of treatment. In addition, you only pay $20 under Standard Option and $25 under Basic Option for an annual physical, which also includes basic screening diagnostic tests and cancer screening test, when provided by a Preferred physician. For children, we pay 100 percent of routine care when you use a Preferred physician from the day they are born until they are 22 years of age.
Our network of almost one million Preferred hospitals, physicians, pharmacies and other health care professionals also help to save you money. When you use Preferred providers, your coinsurance payment or copayment amount is less than if you use out-of-network providers. It also decreases the amount we pay to providers for covered services, which we pass along as a lower cost-sharing amount when you use Preferred providers.
In addition, we help if you have a chronic condition and need assistance with managing your condition. You can call our Blue Health Connection Nurse Line 24 hours a day, seven days a week at 1.888.BLUE.432. Registered nurses are there to help you with any questions you may have about your condition and the treatment of that condition. Further, many local Blue Cross and Blue Shield Plans offer Disease Management programs to Service Benefit Plan members free-of-charge for diabetes, heart disease and asthma. These local Plan programs provide guidance and information to help manage your chronic condition.
Eliminating paperwork is important to us. Many of our network physicians and hospitals file claims to the local Blue Cross and Blue Shield Plan electronically.
We are also helping save costs through our Prescription Drug Programs. Our Standard Option Mail Service Pharmacy buys drugs directly from manufacturers in large quantities. As you know from your own shopping, buying in large quantities lowers the price per item. So, many maintenance drugs are available at a low copayment for you regardless of the actual cost of the drug. Our Retail Pharmacy Program contracts with national and regional store chains as well as with local independent pharmacies to help ensure you get the lowest price available for your prescriptions.
What You Can Do?
- Become aware of your health care costs. Many of us don't realize how much health care really costs. We know quite a bit about our share - premiums, deductibles, coinsurance and copayments. But how often do we really think about the total cost. For instance, the federal government pays a large portion of you premium amount each year. The biweekly premium amount for Standard Option self and family coverage is over $550 and you pay about $185 of that amount. When your Explanation of Benefits arrive, like most of us, you probably focus in on what you owe. So, you may miss the physician's charge of $100 and focus on the $20 copayment you pay.
- Make sure you know what is covered and not covered under your coverage. We offer an electronic copy of our brochure on our web site to help you learn more about your coverage. In addition, we provide benefit information in plain language on our web site under the Benefit Plans feature and in articles in our Media Room feature. You can also call your local Blue Cross and Blue Shield Plan at the number on the back of your ID card or email the Plan a question through our eService feature on fepblue.org.
- Learn the common cost-sharing terms and what they mean to you and your out-of-pocket costs. For example, coinsurance is an amount you pay that is a percentage of the allowable amount for which you are responsible. A copayment is a fixed amount that is the same regardless of what the provider charges. The terms important to your Service Benefit Plan coverage are in Section 10 of the Service Benefit Plan brochure.
- Know the network or Preferred providers located in your area. You can access our online provider directory to find physicians, hospitals, pharmacies and other health care professionals near where you live. If you travel, you can also use the directory to locate a provider if you should need medical care away from home. You can print the information for your reference and keep in on hand so you have it when you need it.
- Use Preferred providers to pay less in out-of-pocket expenses. If you have Standard Option, the coinsurance amounts for care by Preferred providers are less than the coinsurance for care by Non-preferred providers. The difference in the coinsurance amount can be significant. Further, if you use Preferred providers for some types of care, you only pay a copayment instead of the coinsurance amount required for care by a Non-preferred provider. Under Basic Option, benefits are not available for care by a Non-preferred provider, except in certain circumstances such as emergency care. So, if you use a Non-preferred provider, you may be responsible for the provider total charge.
- Make sure your physician knows your prescription drug costs. Many physicians are not aware of the cost of prescriptions. Make sure you let your physician know about the prescription medications you are taking and their cost. If your physician is prescribing a new medication, ask if a generic drug is available. You may also wish to ask about generic drugs for your other prescriptions. You can save money when you use generic drugs under both Standard and Basic Options. Under both options, your copayment or coinsurance amount is less when you use generic drugs.
- Focus on health, wellness and prevention, and living a healthier life. In 2008, the treatment and management of diseases, such as diabetes and heart disease, was more than $500 billion in health care costs. Regular check-ups and disease screening supports keeping you healthy. Regular exercise and maintaining a healthy weight are key to good health, and the prevention of diabetes and heart disease. Check out your benefits for preventive care in the Service Benefit Plan brochure, and check out WalkingWorks on our web site to see how walking can improve your health.
- Use generic drugs when possible. As we stated previously, you can save money when you use generic prescription drugs. And in 2010, under Standard Option, you may also be able to get generic drugs without paying a copayment or coinsurance amount. See the Service Benefit Plan brochure for more information.
We all need to help control the cost of health care. Each of us, insurers, members and providers, all have a role to play and will provide an important viewpoint in any outcome.