Answers to common questions about health-care choices
The university’s Open Enrollment period, when employees choose benefits for the following year, began Nov. 1 and will end Nov. 19. Changes in health care benefits options make it more important than ever that employees carefully research their choices and actively participate in Open Enrollment before the deadline Nov. 19. BenefitSU below raises and then answers the top questions that have been asked this year by university employees.
For a more extensive list of frequently asked questions, visit the website at http://benefitsu.stanford.edu/openenroll/index.html or call BenefitSU at 736-2985, (877) 905-2985 (toll free) or (650) 926-2356 for Stanford Linear Accelerator Center employees.
Why are some plans going up in cost to employees, while others are going down?
Health care costs are going up nationwide and have been for many years. Stanford employees have expressed concerns about the high cost of their contributions. In response, Stanford redesigned many of its plans. That’s why you see substantially new or different programs. These new programs were designed to balance cost with usage. The plans that remain the same more directly reflect the increasing costs health care providers are passing on to consumers. Comparing last year’s plans to this year’s plans is—essentially—like comparing apples and oranges, with the exception of the HMOs.
Stanford had to change the health care plans it offered employees to address two big issues: one, rising premiums nationwide; and two, access to the Stanford Hospital and Clinics. For instance, we dropped Triple Option and the Stanford PPO because they had become unaffordable to most people. We introduced three new plans: a consumer-driven health plan, which is designed to promote decision making among consumers; the 3-Choice Plan, which has important differences from the Triple Option Plan; and Only@Stanford, which makes the Stanford Hospital and Clinics an exclusive provider for people who choose the plan. The HMOs stayed the same: PacifiCare, Health Net and Kaiser.
The university contribution for each individual or family plan is equal to the cost of the lowest-cost plan—Kaiser Permanente. So, the university figures out how much Kaiser costs both to an individual and their dependents and then applies the full individual cost or 82 percent of the family cost to whatever plan the employee chooses.
Is Stanford passing on the increasing cost of health care to employees?
In fact, everyone—employees and employers alike nationwide—are feeling the burden of increasing health care costs. The university is paying more for health care coverage this year than ever before. The university’s contribution to health care costs has increased 13.5 percent.
Stanford’s contribution to an individual’s health care plan is essentially tied to the market—specifically to the lowest-cost plan, which is Kaiser. In other words, the university’s contribution is aligned with the cost increases being charged by Kaiser, whose costs have gone up more than 15 percent per year on average over the past three years. As Kaiser’s costs have gone up, the university’s contributions to employee health care plans have gone up.
However, the university wants employees to be able to choose other plans if they want, for example, more flexibility. The cost of any health plan is directly related to the choices an employee makes in terms of what is important to his or her family.
The employee contributions in the three new health plans are lower in 2005 than similar plans were in 2004. Does this mean the university’s costs went down and the university is saving money?
No. In fact, the opposite is true. The amount that comes out of your paycheck for some plans is lower. We redesigned the plans primarily to lower your premiums and to provide greater access to the Stanford Hospital and Clinics. The university’s contribution to whatever plan you choose is 13.5 percent higher than last year.
Why have I been automatically assigned to a new plan when I didn’t choose it?
Triple Option and the Stanford PPO have been eliminated. We assigned people in those plans to the plans they most closely resemble. You are not obligated to keep those plans. In fact, we prefer you choose your own. But we must assign people to one plan or another—or have them choose no coverage—by the time Open Enrollment ends. If we don’t, we risk having employees with no coverage.
I’m worried about how much I’m going to have to pay for my hospitalizations if I choose the new 3-Choice Health Plan. When I was in Triple Option, I had 100 percent coverage for my hospitalizations.
The 3-Choice Plan is the plan closest in design to the Triple Option Plan (TOP), but it is not an exact substitute. If having hospitalization covered at nearly 100 percent is important to you and to your family, you might consider PacifiCare, Health Net or Kaiser. There is a $100 hospital copay for each of those plans. None of the plans covers hospitalization 100 percent. On the other hand, you will not have to pay so much out of your paycheck for the new 3-Choice Plan as you have been paying for the TOP. Lower premiums usually come at a cost, such as higher out-of-pocket expenses for services such as hospitalization.
It is true that in the 3-Choice Plan you are responsible for 25 percent of hospitalizations. But that doesn’t mean a hospitalization will be financially catastrophic if you are enrolled in 3-Choice. That’s because you are protected by out-of-pocket maximums. For instance, in Tier 1 of the 3-Choice Plan, the maximum is $2,500 per individual and $7,500 per family. Using Tier 1 means that your admitting doctor is at the Palo Alto Medical Foundation, but your hospital can be Stanford Hospital or Lucile Packard Children’s Hospital.
Can I pay more for a plan that gives me 100 percent hospitalization?
No, because we do not offer such a plan. But, again, if having coverage that is nearly 100 percent is important to you, you might consider an HMO.
Can you explain the tiers in the 3-Choice Plan in simple terms and what the main difference is from last year?
The 3-Choice Health Plan offers a wide choice of Blue Shield physicians and hospitals and other health care professionals. The provider you choose at the time you need health care determines under which tier your services will be covered and how much of the out-of-pocket cost you will be responsible for.
In Tier I—which gives you the highest level of benefits—you must use Palo Alto Medical Foundation (PAMF) providers.
In Tier II, you can use any of Blue Shield’s PPO providers, including Stanford Hospital & Clinics, Lucile Packard Children’s Hospital and Menlo Medical Clinic, although your out-of-pocket costs will be higher than in Tier I. You also have the option to cover your children who are away at school under Tier II.
In Tier III, you can use providers that are not in the Blue Shield network, but you are responsible for much more of the costs and for submitting claims.
If you are comparing the 3-Choice Plan to the Triple Option Plan (TOP), one difference is that Tier I is no longer like an HMO, so access to the Blue Shield HMO network was eliminated. Under Tier I, your physicians must now be from the Palo Alto Medical Foundation (PAMF), and you will be responsible for more out-of-pocket expenses for services like hospitalization and co-insurance for lab work and X-rays. Most of the TOP usage was concentrated at PAMF.
I want to keep my Stanford physician. What plans can I choose?
Only@Stanford Health Plan, Lumenos or the 3-Choice Health Plan (covered in Tier II only). This year, because of the redesigns, you are able to keep your Stanford doctor while paying a lower premium.
What should I consider when evaluating Lumenos, the new consumer-driven health plan?
Consumer-driven health plans are different from conventional plans and, therefore, use unfamiliar terminology. Lumenos, which has about 380,000 doctors and 50,000 hospitals and other facilities nationwide in its Beech Street network, encourages you to think about out-of-pocket expenses and deductibles differently. Lumenos starts with a Health Reimbursement Account (HRA), for which there is no equivalent in other plans. Unused HRA funds roll over into the next year. The HRA provides an amount upfront to pay for covered health care services and prescriptions at the full-negotiated rate. Once you have exhausted those funds—and many never do—you are responsible for “the Bridge.” The Bridge is the amount you then owe, in combination with your covered dependents. You are responsible for 100 percent of medical expenses and prescriptions in the Bridge. If you continue to need coverage, Lumenos offers what it calls “Traditional Health Care coverage.” You have to pay a co-insurance until you and your dependents reach the out-of-pocket maximum for the year, at which time your expenses are covered at 100 percent.
Has PacifiCare renewed its contract with Palo Alto Medical Foundation for 2005?
Sutter Health, which includes Palo Alto Medical Foundation (PAMF) as well as other provider groups, and PacifiCare are in active negotiations. As this piece goes to print, a contract for 2005 has not yet been renewed. Although we cannot make any guarantees, we are hopeful that Sutter Health and PacifiCare will reach an agreement. You may also get access to PAMF through Health Net, Lumenos and the 3-Choice Plan, but your per-pay-period contributions, as well as copayments, may be higher. If you have enrolled in PacifiCare in order to have access to PAMF, and the contract isn't renewed, you will be able to change your enrollment in January.
I am not sure which health plan to select. How can I get help?
Health care coverage is complicated, and there is no substitute for studying the options. We suggest reading the available materials, working through the online tools—especially the Educated Chooser—and calling plan representatives. Call BenefitSU with questions, but understand that your colleagues there cannot actually recommend a plan for you.
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