Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.twt.news From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Blues plan healthy, federal workers told Date: Tue, 17 Nov 92 15:07:56 EST Message-ID: \SE A \HD Blues plan healthy, federal workers told \SH 'Open season' note assures insured \BY Karen Riley \CR THE WASHINGTON TIMES As federal workers consider a switch in health insurance coverage, Blue Cross and Blue Shield has written to its 1.7 million U.S. employee subscribers to allay any worries raised by reports of problems in the Blues system. "You may have seen recent stories in the press relating to the financial status of local Blue Cross and Blue Shield organizations," said the letter. "We want to assure you that your federal Blue Cross and Blue Shield Service Benefit Plan coverage is secure and will be there to protect you." The Oct. 30 letter was signed by Alan P. Spielman, vice president for the Federal Employee Program division of the Blue Cross Blue Shield Association, the national organization that licenses and monitors the 73 regional members of the Blue Cross system. The letter was mailed to coincide with "open season," the five weeks from Nov. 9 to Dec. 14 when federal workers are allowed to switch their coverage to another health plan and companies vie for customers. The Blues have been rocked by a series of negative stories that questioned the management practices and financial stability of several members, including Maryland Blue Cross and Blue Shield, based in Owings Mills, and D.C.-based Blue Cross and Blue Shield of the National Capital Area. The stories stem from concerns raised by Maryland state regulators and a separate probe by the Senate permanent subcommittee on investigations, begun earlier this year after the failure of West Virginia Blue Cross and Blue Shield in late 1990. Association officials said the letter was intended to answer members' questions and was not meant to avert any feared stampede from the plan during open season. "We heard from a few members, not too many, but we wanted to make sure they understood what was going on," said Marilyn Quintal, executive director for marketing for the federal plan. "There were some comments in those articles that rates, premiums and benefits might be adjusted. We wanted workers to understand that [these problems] did not affect federal coverage," she said. Blue Cross provides health insurance for 40 percent of all federal workers, up from a 36 percent share about 10 years ago. The 3.1 million federal workers and their families who belong to the Blues program account for about 8 percent of the system's total business. Federal workers who elect Blue Cross join the Federal Employee Program, which is underwritten by 68 Blue Cross and Blue Shield plans all over the country, the letter points out. That means federal workers "are not affected by the financial situations in any one Blue Cross and Blue Shield plan," Mr. Spielman wrote. The local organization serves in an administrative role for federal workers - processing claims, contracting with local doctors and hospitals, and answering enrollment-related questions. In contrast, those who buy Blue Cross coverage through a private plan may not be so well protected. That insurance is underwritten by local Blue Cross companies, and some are more secure than others. For example, more than a dozen of the local Blues are now on the national organization's financial watch list. When West Virginia Blue Cross and Blue Shield failed in 1990, thousands of clients were left without coverage, but the federal employee program was still paying claims filed by federal workers there. Mr. Spielman also notes in the letter that the federal plan's financial cushion is healthy. Those reserve funds are set aside from premiums and kept by the federal government for the exclusive use of this health plan, he explained. "Federal regulations require that reserves be kept at adequate levels," the letter said. "The current reserve level is excellent, and the reserves are secure." The federal Office of Personnel Management worked with the Blues to draft the letter, according to Lawrence Holman, deputy assistant director in OPM's Office of Insurance Programs. Last year the Blues' Federal Employee Program paid 37 million claims totaling $4.5 billion in benefits. The payout should climb to $5 billion this year, the letter said. Despite fierce competition from 400 or so health companies across the country to attract federal workers during open season, there has been no noticeable slippage in business so far this season, Mr. Spielman said in an interview yesterday. "Our call volume is up. A lot of people are very interested. We're quite excited," he said. 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