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  • From: bob ford <bobford79 AT yahoo.com>
  • To: homestead AT lists.ibiblio.org
  • Subject: [Homestead] Tennessee CoverTN healthcare article
  • Date: Sat, 22 Nov 2008 10:04:19 -0800 (PST)

We have several list members from TN. I thought this was an interesting
article. I don't know anything about it, other than what is in the article.
Maybe it is like the Mass. plan? From today's WSJ

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NOVEMBER 22, 2008

What Tennessee Is Doing About Health Insurance Coverage with limits is
better than no coverage at all.

By PHIL BREDESEN


Three years ago, I realized something about health care. I've taken part in
uncounted policy discussions about America's uninsured, both as governor of
Tennessee since 2003 and before that as CEO of Nashville-based HealthAmerica
Corp. Everyone regularly criticizes the unfairness of the system. But we
don't make progress.

What I realized was this: Everyone proposing solutions or criticizing
unfairness was doing so from the comfortable vantage point of having good
health insurance. While we work to build a better system, wouldn't it also be
responsible to find a way to get something -- not a perfect solution, not
even a long-term solution -- into the hands of the more than 46 million
uninsured Americans who don't share our good fortune?

Dottie Landry is one of those uninsured Americans. She lives in Nashville and
is self-employed. She makes and sells jewelry. Over the years, she has been
generally healthy but uninsured. In 2000 she got very sick -- from a tick
bite -- and had to spend about $9,000 for medical care. She put most of it on
her credit cards, which took years to pay off.

We all want to help Ms. Landry, but here's the problem: a comprehensive
health-insurance policy for her costs about $5,000 a year, and someone has to
pay that. That's a real number that won't go away with group purchasing or by
beating up insurance companies. Ms. Landry can't afford that, and in a world
of trillion-dollar deficits it's hard to see how the federal government can
either.

We need a national health-insurance solution, but isn't it sensible in the
meantime to make sure everyone has a basic health plan before we give a few
more people a perfect but expensive one? Shouldn't we make sure everyone at
least has a Chevy rather than providing a Cadillac to a few and letting the
rest walk? We're trying that in Tennessee with CoverTN.

CoverTN, which began in 2006, is a health-insurance plan for those who are
self-employed, or who work for small businesses that can't afford a
traditional policy.

It is not free health care. Rather it is a limited plan with shared costs. In
devising this plan, we didn't start out the usual way -- by defining what
benefits we wanted -- but instead set how much we wanted to pay. And then we
began a competitive-bidding process to see how much health care we could buy.
We initially set the amount we would pay at an average of $150 a month, and
split the responsibility for that premium three ways. The company would be
responsible for $50, the individual for $50, and the state for the final $50.

The bidding was vigorous. It was ultimately won by BlueCross BlueShield of
Tennessee with a benefit package that meets a great many -- not all -- of the
real needs of the uninsured at a cost far below conventional plans.

At these premium levels -- less than half of what a conventional plan might
cost -- the benefits are limited. But the benefit structure is also different
than in a conventional plan. Most limited plans achieve their savings with
high front-end deductibles, requiring a person to spend often thousands of
dollars out-of-pocket before benefits kick in. But when we asked our
customers -- uninsured Tennesseans -- what they actually wanted, we found
that they were most interested in some help with the more common things; a
doctor's visit, prescriptions, a short hospital stay.

CoverTN emphasizes covering these front-end costs. It features free checkups,
free mammograms and $15 doctor visits without deductibles, for example. And
it achieves its savings on the back end, with relatively low limits on
hospital stays and an overall $25,000 benefit limit in any one year. It does
not cover truly catastrophic events.

This makes medical sense. Good access to a doctor and a drugstore when you
first have a problem can avoid a lot of cost and heartache later.

One thing that has been unexpected is the success of a generics-only
prescription drug program. We needed to cover medications, but because of the
high prices and aggressive marketing of branded prescription drugs, we were
concerned that the costs would overwhelm the program. With some misgivings,
we required our bidders to propose a largely generic prescription program.
It's worked surprisingly well. Physicians have typically been able to select
suitable medications for their patients, and patient satisfaction has been
high and complaints few.

Having been badly burned by uncontrolled growth in costs in Tennessee's
Medicaid program (TennCare once gobbled up a third of the state's budget), we
proceeded cautiously with CoverTN and have been rewarded with good control of
costs. This fall we added some benefits: The number of primary care visits
doubled from six to 12, for example. Best of all, we added them without
increasing rates. When did you last hear of a health-insurance plan whose
annual update was a benefit improvement but no rate increase?

An obvious and valid criticism of health insurance such as this is what
happens when a patient exceeds the benefit limits.

What we're finding is that even in health care, when people know that there
are limits, they work to manage their costs. This year, as of the first nine
months, only four people out of the more than 15,000 people covered had hit
the maximum overall limit of $25,000, and only three had exceeded the
separate in-patient hospital limits. A larger number, under 4%, hit the
quarterly pharmacy limits during those first nine months.

Even those who go over the benefit limits get the significant advantage of
being able to piggyback their personal expenditures on the contracts CoverTN
has negotiated. By doing this, they often can cut their costs on uncovered
health care in half.

Ms. Landry, to continue her story, has joined CoverTN and is very happy with
it. About a year and a half ago, right after she joined, she had a bad dog
bite that put her in the emergency room with several follow-up visits. The
cost for this episode was about $4,000, and CoverTN paid for almost all of it.

The Chevy plans certainly have their critics, and I don't offer CoverTN as
the perfect or ultimate answer, but it sure has worked for Ms. Landry and
thousands of other Tennesseans.

Mr. Bredesen, a Democrat, is the governor of Tennessee.







  • [Homestead] Tennessee CoverTN healthcare article, bob ford, 11/22/2008

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