Showing posts with label Health insurance. Show all posts
Showing posts with label Health insurance. Show all posts

Wednesday, January 15, 2014

Mail | Their drug costs soared to $6,142 vs. $960

Anonymous@12:36 a.m. writes:

Jim:

I'd love to see you create a separate thread on healthcare costs pre- and post-"Employee Choice" program. Notably, prescription drug care costs. They definitely went up quite noticeably.

Example from me: A medication that retails for just over $2,100 for a 30-day supply cost me $80 out of pocket from Caremark in 2013. In 2014, the same 30-day supply will cost me $1,622 in January (I'll just round it to my full $1,500 deductible since I'm single), then $422 per month out of pocket after the 80/20 coverage kicks in. So my cost for this drug for 2013 was $960 ($80 multiplied by 12) and for 2014 will be $6,142 ($422 multiplied by 11 plus $1,500).

Ergo, my $5,000 reduction in salary and benefits, just on this one medication, which my doctor tells me I cannot stop taking and for which there's not a generic. And yes, I got a second opinion!

I'd love to know what others' experiences are now that folks are starting to see the real prices for 2014 and do the math for themselves.

As always, other views are welcome. Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot.com]; see Tipsters Anonymous Policy in the green rail, upper right.

Monday, November 25, 2013

GCI predicts higher medical costs under Obamacare as more uninsured sign up for company's coverage

That's according to a new Wall Street Journal story that says Gannett and other employers expect the Affordable Care Act will increase the number of workers seeking company-provided health care to comply with the law's requirement that all Americans get medical coverage by Jan. 1.

Because Gannett funds its own plan, that would raise the company's annual medical costs, now well over $100 million a year for its 30,000 employees.

The WSJ attributes the role of uninsured workers in Gannett's higher medical cost forecast to a person familiar with the company's plans the paper didn't identify. It does not say how many employees are currently without any medical coverage.

Gannett announced a major shift in its medical plans in September, switching to one plan from two, and adding steep deductibles that must be met before plan coverage kicks in. With those deductibles, an employee with coverage for just themselves must pay the first $1,500 in doctor visits and other costs before the company starts paying 80% of the rest. Employees with family plans pay the first $3,000 out of pocket.

The company also scrapped a policy where employee premiums were set according to a sliding scale based on how much they earned. Now, the lowest-paid worker pays the same as the highest paid.

It's not all Obamacare
At the time, CEO Gracia Martore principally blamed Obamacare for the company's decision to boost employee premiums and deductibles. But she offered no details on the reform law's specific role. The WSJ story is the first I've seen to do so.

But the paper says that new, higher employee premiums aren't solely because of Obamacare -- a point I made when Gannett first announced its new plans.

"Employers have been pushing more of the cost of providing health insurance on to their workers for years," the WSJ says, "and firms that aren't booking much sales growth due to the sluggish economy are under heavy pressure to keep expenses down."

Gannett's full-year 2013 revenue is expected to dive 3% to $5.2 billion, according to a survey of Wall Street stock analysts. But those same analysts forecast a 17% surge in revenue to $6.1 billion next year because the broadcasting division will sell more ads with the winter Olympics and the midterm elections.

According to the WSJ, Gannett says more than half of its employees will see monthly premiums fall by 12% when the new plans start in January. But factor in the higher deductibles and the savings will almost certainly evaporate.

And for the other half, of course, premiums will rise on top of the higher deductibles. "For some employees, the result was a 60% jump in monthly premiums for family coverage, to $575 from about $360," the WSJ says.

Earlier: Here are two FAQs about Gannett's new medical plan.

Wednesday, October 30, 2013

Planning medical procedures to beat higher prices?

In an e-mail, a reader asked me if Gannett employees are scheduling surgery and other expensive procedures before the end of the year to beat higher annual deductibles kicking in under the new medical plan in effect starting Jan. 1.

That's what I'm doing. I've just been told the shoulder problem I wrote about last month requires surgery. Under my current health insurance plan, I have a $1,500 deductible, much of which I've already met for the year.

In 2014, I'm certain to move to a new plan with an annual deductible that will be three times higher.

If I get the surgery done before year's end, it will cost me only $540. But if I wait until January, it could cost me a net $4,500 depending on any other medical expenses during the year.

Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.

Tuesday, October 01, 2013

Post-Obamacare, GCI's premiums top U.S. averages

Gannett's new health insurance premiums are sharply higher than average prices across the nation for similar plans this year, before the Obamcare reform law took effect, according to data in the authoritative Kaiser Family Foundation annual insurance survey.

GCI will charge a $90 monthly premium for its employee-only benefit next year. That's nearly 50% higher than the national average of $61 other companies are charging this year, the Kaiser data show.

For family plans, GCI will charge $575 a month vs. the $270 national average this year -- a price more than twice as high.

To be sure, there's a big caveat in directly comparing the GCI and Kaiser data. The company's figures are for the new high-deductible employee plan starting Jan. 1, while the Kaiser data are for 2013 high-deductible plans, and are based on a survey of 2,067 firms done from January to May.

Indeed, when Kaiser reports figures in next year's survey, they may be much closer to the company's new premiums and deductibles if other major healthcare companies raise their rates, too.

Company shifts blame
GCI has principally blamed the Affordable Care Act -- commonly called Obamacare -- for the company's decision to switch to a plan that's more costly for employees. But the company hasn't offered any hard evidence to back up its assertion, suggesting it might be trying to achieve a long-sought goal of shifting more costs to employees without accepting much responsibility.

Comparing the GCI and Kaiser data offers at least a snapshot of where prices have been, and where they're now heading across the company -- and, possibly, other large employers. I'm unaware of any other survey as comprehensive as Kaiser's. The non-profit published its 2013 report on Aug. 20.

Although GCI's premiums next year are higher, its deductibles compare more favorably with those in the Kaiser report. The employee-only deductible next year will be $1,500 vs. the $2,098 national average this year. For family plans, Gannett's deductible will be $3,000 vs. the $4,037 U.S. average this year.

For this post, I compared Kaiser figures for plans like the one Gannett is switching to starting Jan. 1: high-deductible plans with health savings account options. The company announced its new plan a week ago for nearly 31,000 employees and thousands more of retirees. It's one of the biggest medical plan overhauls in the company's history.

Obamacare moves into higher gear today, when government "exchanges" go live, allowing consumers to shop for new health insurance plans that are often less expensive vs. the private market -- as much as 84% cheaper in my case. The reform law is meant to bring better medical care to about 45 million Americans who don't have insurance. All new plans go into effect Jan. 1.

More high-deductibles
GCI is joining a growing number of other big employers switching to high-deducible plans in a bid to better control costs. Last year, the company spent more than $100 million on medical care. Employees paid just about 40% of that, and Gannett picked up the rest. This year, however, that ratio will be closer to 50%-50%, according to one of my readers.

The new plan requires employees to pay hundreds and even thousands of dollars of their doctor and pharmacy bills out of their own pocket to first satisfy the deductibles before the plan's coverage starts. However, GCI will pay a portion of the deductibles for employees earning less than $70,000 annually who open health savings accounts.

But even with those small subsidies, the company's lowest-paid employees will be hurt more than ever. That's because the new plan charges the same premiums regardless of how much employees get paid -- a big change from the current insurance plan.

CEO Gracia Martore, who last year earned $2.5 million in salary and bonus alone, would pay the same premium for family coverage as her lowest-paid employees -- assuming she even pays for her own health insurance.

About 23% of all firms offer these kinds of high-deductible plans. But they're much more popular among bigger employers, those like GCI with 1,000 or more employees. Some 43% of firms that size offer such plans, according to Kaiser.

Earlier: GCI's new plan is "a pay cut, sure and simple."

Related: Here's the full 236-page Kaiser report. Details about high-deductible plans with health savings accounts are in Section 8. Plus: This is Gannett's FAQ on its new plan, plus a document offering examples of how the plan will work.

Sunday, September 29, 2013

Why Obamacare could slash my medical costs 84% and other lessons from a screwed-up health system

Gannett's sweeping new 2014 employee health plan is based on the much-debated concept of consumer-driven health care. The theory: Workers control an employer's medical costs much better when their own money is at stake.

My employee ID card.
Under Gannett's new Consumer Choice Health Plan, you'll still pay monthly premiums. But you'll also pay for all doctor's visits and prescription drugs up front, with your own money, until you satisfy an annual deductible. Only then will the insurance benefits really start, paying 80% of expenses going forward. You'll pay the remaining 20%.

The deductibles are steep. For employee-only plans: $1,500. For family plans: $3,000.

Feeling sick already? You'll now have a big financial incentive to ask how much a doctor's visit costs before scheduling an appointment, or the price of meds when a prescription needs filling. Then you'll weigh those certain costs against the uncertain severity of your symptoms -- and the potentially awful consequences if you make the wrong choice. You'll ask before spending, instead of spending without asking.

I feel your pain
My recent experience as a patient -- a shoulder injury that's cost $600 so far -- is a story about the pluses and minuses of traditional health insurance plans. In other words, plans like the ones 31,000 Gannett workers and thousands more retirees are about to lose.

The extraordinary price I pay for insurance premiums -- nearly $11,000 a year, just to cover myself -- starkly illustrates the grim life many older Gannett employees face if they get laid off. Yet, that's tempered with a new reality: Under Obamacare, my premiums for exactly the same coverage could plunge to less than $2,000 a year.

Or not. As I post this, both political parties in Washington are holding Obamacare hostage in a searing battle over government spending. Simultaneously at 12:01 a.m. Tuesday, the health reform law kicks in and the federal government shuts down, barring an increasingly unlikely ceasefire.

Against that backdrop, Gannett has just launched one of the biggest medical plan overhauls in its history. And no wonder: With a self-funded plan, the company spent more than $100 million on medical care alone last year. Employees paid only 40% of that. Shareholders paid the rest.

Welcome to one of the world's most dysfunctional health care systems, and certainly the priciest. That's where one frustrated consumer's story begins: mine.

A little health history
I am 56. I don't smoke or drink. I'm 5'6" and weigh about 155 lbs. My health is good to great, except for high cholesterol that I've beaten into submission with a daily statin pill.

My medical plan is Kaiser Permanente, an enormous non-profit based in Oakland, Calif., near my San Francisco home. Kaiser employs 17,000 doctors and 160,000 other employees at 37 hospitals and 611 medical centers across California and nine other states. With nine million members, its $51 billion in annual revenue last year was 10 times more than Gannett's.

Kaiser was my provider when I was a USA Today reporter. I paid $150 in monthly premiums for a comprehensive, employee-only plan that included benefits like acupuncture and classes on nutrition, yoga and how to quit smoking.

When I accepted a USAT buyout in 2008, I continued getting Kaiser care for the same monthly premium until my severance benefits ran out 10 months later. Then, COBRA kicked in for another 18 months of Kaiser benefits -- but at a much higher price: $450 a month. That was because Gannett was no longer subsidizing my costs.

Once COBRA expired, I stayed with Kaiser -- even after it turned down my request for a less expensive high-deductible plan -- because I liked my doctor and other services that much. My monthly premium jumped to $600. Then, nearly every year after, it rose another $100.

I'm now paying nearly $900 a month, with a $1,500 annual deductible. Kaiser covers 80% of my expenses. My 20% is mostly co-pays of $30 per office visit, more if I see a specialist.

Martore and Obama.
Add it all up, and I've spent nearly $42,000 on premiums alone since I left USAT nearly six years ago. As you see, without access to an employer plan, it's insanely expensive to buy insurance on the individual market at non-group rates. That's why many older Gannett employees fear leaving the company without first lining up a new job with health benefits.

These crazy-high prices are a main reason why 48 million Americans -- about 15% of all -- don't have health insurance. That's what Obamacare is supposed to fix. But richly paid Gannett CEO Gracia Martore will have none of that.

No questions asked
Last February, when I called Kaiser about recurring pain in my right shoulder, I wasn't worried about big up-front expenses. Indeed, I wasn't worried about any expenses, because I knew Kaiser would pick up most of the tab.

At the office, I paid my $30 co-pay with a credit card, then headed for the examining room. There, my doctor asked a few question, gave me an exam, and then a diagnosis of adhesive capsulitis. He referred me to a Kaiser physical therapist.

I didn't ask how much the PT would cost. Over the next month, I saw him three times, paying a $55 co-pay for each session.

Soon enough, I received monthly statements showing how much I had paid toward my deductible. As always, I tossed them aside, unread. In 13 years at Kaiser, I've only reached my deductible once -- in 2000, a very bad year for both me and Gannett. Two surgeries cost $35,000, nearly all of it paid by the company itself. (A belated thank you, shareholders.)

The physical therapy didn't help much. I e-mailed my doctor, who replied: "Let's go for a steroid injection this week. It will definitely help." He referred me to one of Kaiser's sports medicine doctors. No co-pay for that, because the "visit" was by e-mail.

The sports med guy also gave me an examination. And then he told me something I didn't want to hear.

It's my choice
He said it was very unlikely a steroid shot would help. What's more, potential complications included an infection. And even in the best cases, steroids only work about a third of the time. And then there was this kicker:

"But I'll give you a shot if you still want one," he said.

Now, it would have been easy to say yes. After all, Kaiser was footing most of the bill. I said no, however, mostly because of the potential complications.

It wasn't until later that I found the encounter crazy. Why didn't he just say: steroids won't work. No shot for you. There would have been immediate savings from the unused medicine, needle, cotton swab, etc. And not least: his time. Plus, further down the road, there were potentially huge savings for not having to treat a costly infection.

Maybe he was taking the path of least resistance. I might have chewed up more precious time arguing. Or worse, complained to my main doctor -- his colleague.

And the real cost?
Researching this post yesterday, I surfed Kaiser's website for copies of those monthly statements I'd thrown away. And here's what I learned.

Kaiser billed $170 for the office visit with my main doctor -- the one where I'd paid only a $30 co-pay.

They billed $431 for the three physical therapy sessions, but zip for the sports medicine guy, although I don't know why.

Total: $601. Of that, my share was only $224. Kaiser paid the rest.

This year has been unusual in terms of using Kaiser. More typically, my annual charges would run closer to $500. That means I've received a total of $3,000 worth of care in the nearly six years since I left Gannett. But I've paid those $42,000 in premiums, so Kaiser's gotten the better end of the deal financially. On the other hand, I've enjoyed really good health. That's what matters in the end.

Dollar-wise next year, things could be very different.

Time to shop
Under Obamacare, Kaiser will sell me a plan with a higher annual deductible: $4,500 vs. $1,500. Co-pays will barely change. Otherwise, my coverage will be identical. My premiums will drop to about $500 from $900. And Kaiser can't turn me down for pre-existing conditions this time, also because of the health reform law.

In fact, that Kaiser plan costs even less when bought through California's government-run healthcare exchange. There, it's only $139 a month for individuals earning less than $50,000 a year. Same coverage, deductible and co-pays.

With Obamacare, my premiums could plunge 84%, to under $1,800 a year from $11,000 -- if I qualify.

But across Gannett, few employees will catch a break like that, especially the lowest-paid ones. The top brass? Not a problem.

Whatever my plan next year, I'll ask questions I've never asked before. So will Gannett employees:
  • How much will this office visit cost? 
  • Is there anything you can tell me over the phone or on the Web for free?
  • What's the charge for that X-ray, and is it really necessary?
  • I can't afford those pills. Will something over the counter work?
  • I can buy groceries. Or I can see the doctor. But not both. What should I do?
My shoulder still hurts
More than $600 later, I'll take my now pre-existing condition to the new medical marketplace on Tuesday.

But I've recently discovered what's causing some of the pain: too much typing. Best of all, the remedy is free.

What's your healthcare story? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot.com]; see Tipsters Anonymous Policy in the green rail, upper right.

Saturday, September 28, 2013

In new med plan, a worker named Maria suffers; little-publicized shift hurts the most vulnerable

As employees dig deeper into Gannett's new health insurance plan, it's become clear the sweeping changes will have potentially devastating financial consequences for many of the company's 31,000 employees and thousands more retirees.

To be sure, some may benefit. For example: younger workers earning $35,000 or less with no dependents and few if any health problems. Under the plan, they could build tax-free health savings accounts with $500 annual contributions from Corporate. They'll own those HSAs outright, and can take the accounts with them if they leave the company.

But for most, last week's plan will significantly boost medical costs in just three months, after it goes into effect Jan. 1.

We already know about a particular glitch in Obamacare, one that affects Gannett families in certain income brackets. Now, here's another significant wrinkle in the company plan that many people may have missed.

Under the current one, monthly premiums are based partly on how much an employee is paid. Those earning less, pay less. Those earning more, pay more. It's a feature similar to our system of progressive income tax rates.

But in the new plan, that feature goes away. (It's disclosed on Page 8 of this FAQ.) And that will be brutal for many thousands of lower-income workers. They'll soon spend a far higher percentage of their pay on premiums compared to better-paid colleagues. Here's an example, using employees I'll call Maria and Phil.

A clerk and her boss
Maria is a TV station ad sales clerk earning $10 an hour, or $20,800 a year. Her boss, Phil, is the station's ad sales director, making $120,000 a year. They both have employee-only coverage.

Under the current plan, Maria's monthly premium for the same benefits would be lower than Phil's because she earns less. But in the new plan, they'd both pay the same premium: $90 a month, or $1,080 a year.

For Phil, that's less than 1% of his annual income. But for Maria, it's more than 5%.

And it gets worse, because that doesn't reflect the impact of the new deductibles. Under the current plan, employees are only responsible for co-pays when they visit doctors. But in the new plan, co-pays go away. That means employees will be on the hook to pay hundreds and even thousands of dollars in up-front medical expenses right out of their pocket before any coverage kicks in.

In employee-only plans, the deductible is $1,500 a year. For lower-income employees like Maria, who earn $35,000 or less, Gannett covers the first $500.

Big bite, little bite
Even so, Maria would have to spend at least $1,000 of her own money before her plan starts covering any of her doctor's visits or prescription drugs. That would eat nearly 5% more of her pay, bringing the total bite to almost 10% of her annual income.

Gannett doesn't cover any of the deductible for employees making more than $70,000 -- like Phil. He'd be responsible for the full $1,500. Still, that would cost him only about 1.3% more of his annual pay. So, his total bite will be just about 2.2% of his annual pay.

To recap: Maria barely makes $21,000. Phil earns $120,000. But unlike under the current insurance plan, they'll soon pay the same monthly premium.

Lougee
Now, let's carry this up to Gannett's highest echelons. Dave Lougee, president of the TV broadcasting division, got paid $1.1 million cash in salary and bonus last year. (That doesn't include another $1 million in stock awards, pension gains and other pay.)

Under the new plan, Lougee would pay the same monthly premium as one of the lowest-paid employees in his division. (And it's doubtful he pays even a dime.)

To be sure, employees with more skills and responsibilities have always done better financially than those with fewer. That's true at every company across the country. It's a bedrock on which Corporate America was built. But at least Gannett's health plan recognized the special hardships for frontline workers like Maria as costs soared into the stratosphere. The new plan takes that away.

Martore signs off
CEO Gracia Martore announced the new plan in a letter to employees last week. I doubt she wrote the letter herself. These crucial communications are drafted by many people, including especially attorneys.

Still, the letter doesn't offer so much as a hint of the enormous new medical costs she's shifting to the backs of employees -- many of whom have received only tiny raises in recent years, if they've gotten any at all. It's a strange omission for a woman whose childhood was marked by hardship.

Indeed, Martore doesn't express a whit of remorse for what she's decided to do. In fact, the way she closes her letter is worse than if she'd said nothing at all.

It's signed, "Best regards, Gracia."

Related: Here's the company's FAQ about the new employee health insurance plans. And here's a document showing examples of how the plan will work for individuals and families. They are stored on Google Docs, where you can download copies anonymously at no cost.

Got a personal healthcare story to share? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot.com]; see Tipsters Anonymous Policy in the green rail, upper right.

Friday, September 27, 2013

Here's the red carpet medical care top execs get

At Gannett, VIP stands for very important perquisites.

As Gannett ratchets up the cost of health insurance for regular workers, it pays for generous extra medical benefits for the most senior executives and their families during and after employment -- and in some cases, even after they die, company documents show.

That's hardly surprising. Across Corporate America, executives get all manner of platinum perquisites once they're promoted to the sunniest corner offices. But they're controversial because many corporate governance experts say seven-figure paychecks ought to be enough.

As at other companies, Gannett's board of directors argues these perqs are more than necessary. In company documents, the board says they "help minimize distractions from important initiatives" and "attract and retain the best management talent."

Here's a rundown of the executives' benefits, according to annual proxy statements to shareholders.

Cash for mortgages
Gannett pays for supplemental medical coverage for at least CEO Gracia Martore, newspaper division President Bob Dickey, and broadcasting President Dave Lougee.

Dickey
Supplemental generally pays cash for essentials not included in your regular plan, including your mortgage, groceries, childcare, and a private hospital room.

How much does supplemental care cost the company? It's not detailed, but instead is lumped into a category called "other compensation." That also includes costly life insurance premiums and such extra perqs as personal use of the company jet. Last year, other compensation totaled $117,283 for Martore; $125,612 for Dickey, and $131,030 for Lougee. (This table shows total pay last year.)

Supplemental continues after retirement, when it also extends to covering family members. The reports doesn't say how long the benefit lasts, suggesting it's at least as long as the executive is alive.

And if they keel over at their Crystal Palace desk? Family dependents not only continue to get regular medical coverage, but also the supplemental coverage for the rest of their lives. That supplemental insurance costs the company about $10,000 a year.

Top executives swing these benefits thanks to an entire industry of lawyers and other financial consultants who are experts in brass-knuckle negotiating.

Paying to pay even more
And in one of the ultimate perqs, Corporate provides legal and financial advice at company expense. In other words, the company pays attorneys who can help executives wrangle these very benefits.

The report doesn't say how much that expert advice costs the company. But the 2012 proxy report suggests it's worth as much as $25,000 a year, in a section detailing former CEO Craig Dubow's post-retirement bennies.

Earlier: Tell us how much more you'll pay next year for medical coverage.

Related: Here's the company's FAQ about the new employee health insurance plans. And here's a document showing examples of how the plan will work for individuals and families. They are stored on Google Docs, where you can download copies anonymously at no cost.

Mail | New med plan is 'a pay cut, plain and simple'

In a new comment, Anonymous@6:31 a.m. writes:

Historically, employer-provided health care coverage was used as a recruitment device, mostly during the 1940s when skilled employees were in short supply.

There were strict wage and price controls at the time, and health care coverage often was a deciding factor when companies were trying to land good employees. Provision of health benefits was offered in lieu of salary or other compensation that was forbidden by the laws of the time.

At this point, Gannett and other companies are adopting the employee-funded model, essentially taking away the benefit that originally was provided in place of salary. The unfair part of it is that they're doing so without effectively replacing the benefit with some other compensation.

In short, companies provided health insurance in place of money. Now they are withdrawing significant parts of the insurance coverage without replacing it with money. It's a pay cut, plain and simple.

The fact that the entire idea of employer-funded health insurance resulted from misguided government interference in the market is a debate for another day. Let's talk about the pay cut.

Related: From snake oil to science, accidents of history created U.S. health system.

As always, other views are welcome. Post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot.com]; see Tipsters Anonymous Policy in the green rail, upper right.

Thursday, September 26, 2013

You may pay more of your real med costs in 2014; employee share reportedly rising to 50% from 40%

Gannett's newest campaign to rein in health care costs stems partly from something thousands of employees and retirees don't fully understand: The company pays more of your actual medical expenses than you do.

With its self-funded plan, Gannett covers all medical claims over and above what employees pay in monthly insurance premiums, co-pays and deductibles. Historically, you've been paying about 40% of your actual costs for doctor visits, hospital stays and the like. Gannett paid the other 60%.

So, for example, if you had $15,000 in back surgery this year, and your annual premiums, deductible and other out-of-pocket contributions totaled $6,000, Gannett paid the remaining $9,000.

The insurance company or HMO you choose simply helps manage the process.

Now, it's changing 
Starting with the new 2014 plan, the split will be closer to 50%-50%, according to one of my readers. That's one reason your costs are jumping.

The dollar amounts are staggering. Gannett's medical spending in one recent year totaled around $110 million, according to my reader. Of that, the company paid around $66 million and employees paid $44 million.

That's crazy. After all, Gannett's in the business of selling news and advertising. It shouldn't be forced to also be a health care provider. But this is the screwed-up health care system we've got.

In my 20 years at Gannett, the company never did a very good job of explaining this more-or-less hidden benefit -- and I'm someone who always paid close attention to the company's inner workings. And it's still doing a lousy job: I don't see any of this mentioned in the new FAQ.

Getting the word out
This won't change the fact you're shelling out an enormous amount of money. But it could explain the real impact of rising medical costs on Gannett's finances -- whatever the true role of Obamacare -- and smooth employee relations a bit.

I've written about this before, starting three years ago, after I obtained company documents outlining medical costs in 2008. To be sure, they were much higher vs. the $110 million I mentioned above. That year, Gannett paid out $172 million, but collected only $70 million from employees.

Of course, the company had many more workers: 42,000 vs. around 31,000 today. And it took in a lot more money: $6.8 billion in ad sales and other revenue. (It lost $1.8 billion after writing down the value of assets.) Last year, by comparison, revenue totaled $5.4 billion, but net income was $551 million.

How much will you pay for medical next year?

I'm collecting examples to illustrate just how much Corporate is raising employee healthcare insurance premiums and out-of-pocket expenses for 2014. In your replies, please provide as much of the following as possible.

This year
  • Your current insurance premium deduction per month
  • How many people does your plan cover?
  • Approximately how much have you spent so far this year on co-pays and other expenditures not covered by your plan?
  • Your total household income
For 2014
  • Your expected premium deduction per month
  • How many people will your plan cover?
  • About how much do you expect to spend on care not covered by the new 2014 plan? (Note the new deductibles outlined below.)
  • Your anticipated total household income

A reminder
Here are the new monthly premiums for 2014:
  • Employee only -- $90
  • Plus spouse -- $436
  • Plus child(ren) -- $392
  • Family -- $575
In another big change, co-pays disappear. But employees must now first meet large deductibles before insurance benefits kick in. For employee-only plans, it's $1,500. For family plans: $3,000. After that, the plan pays 80% and the employee, 20%.

Also, the employee-only maximum out-of-pocket cost per year will be $5,000. For families, it will be $10,000 per year.

Related: Here's the company's FAQ about the new plans. And here's a document showing examples of how the plan will work for individuals and families. They are stored on Google Docs, where you can download copies anonymously at no cost.

Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot.com]; see Tipsters Anonymous Policy in the green rail, upper right.

Wednesday, September 25, 2013

How other employers are reacting to Obamacare

United Parcel Service got attention by dropping some working spouses from its health plan and partly blaming the Affordable Care Act usually known as Obamacare.

But according to Kaiser Health News, UPS’s move is only one among many changes in employer health insurance, most of them having little to do with the health law.

Gannett and other employers are raising deductibles, giving workers health savings accounts that look like 401(k) plans, mimicking the health law’s online insurance marketplaces and nudging patients to compare prices and shop around for treatments.

In a recent Q&A, Kaiser correspondent Jay Hancock tackled this complicated subject. Here's one passage relevant to Gannett's argument that Obamacare was a principal factor in adopting a new, more costly plan for 2014. (Emphasis added.)

Q: The Affordable Care Act required fewer changes in employer coverage than in plans sold directly to consumers. Why are employers overhauling their benefits?

A: They cite rising costs. Although overall medical expenses are rising at the slowest pace in decades, they’re still going up at twice the rate of inflation. Some analysts doubt the deceleration is permanent.

At the same time, employers say health law requirements such as covering dependents to age 26 and banning annual and lifetime limits on benefit payouts also increase their costs. However, some analysts portray what’s going on as part of a long-term trend of employer benefit redesign that has little to do with the health law.

Assigning blame for new, more costly medical plan, Corporate points to Washington's favorite piñata

I'm always skeptical when companies make broad statements without citing dollar amounts or other hard numbers to back them up. That's why Corporate's communications around the new employee health insurance plan have raised big red flags.

I'm talking about how much the company is blaming the Affordable Care Act of 2010 -- Obamacare -- for the 2014 plan and its sharply higher costs for current employees and for retirees. Corporate's blame game comes off as a cynical ploy to divert anger toward one of Washington's biggest political piñatas. And Gannett's not the only company doing this.

Let me explain.

Obamacare was the very first sentence in CEO Gracia Martore's letter to employees Monday announcing the change. "The implementation of Health Care Reform," she wrote, "will bring significant changes to the health care industry and to health insurance plans."

Then yesterday, in an FAQ to employees, Corporate included a section on Page 3 under the question, "Why is Gannett changing the health care plan?"

Two of the three reasons were about spiraling medical spending by employers and employees. There's been a 114% increase nationwide over the past decade, and for Gannett especially, costs have been rising ahead of the inflation rate, the document says. Fine.

How much?
But the first answer listed was also the longest: Obamacare. Corporate says, "employers who offer insurance are required to pay fees to help make the public exchange premiums affordable to those needing to use the exchanges."

Really? How much are those fees? What's the average cost per Gannett employee annually during the early years of Obamacare? I guarantee you Corporate and its highly-paid consultant (Mercer, I believe) have a very good estimate of that cost.

Indeed, Gannett's own medical administrator, UnitedHealthcare, offers an overview of some of the fees to be paid by self-funded employers like Gannett. One of the biggest is the reinsurance fee, which costs companies about $63 per employee per year in 2014. So far, however, it looks like Gannett is boosting employee medical premiums alone by amounts far in excess of $63 a year.

But that's not all. Next, Corporate writes: "Many employers are seeing their health care plan costs increase as a result of Health Care Reform." How many employers? What percentage of all? Even a ballpark estimate would be better than the loosey-goosey "many."

Corporate's blame-Obamacare message ends with this: "Employers view consumer-driven health care plans as a key component to managing costs related to the changes driven by Health Care Reform."

Here, then, is how Gannett arrived at the radical change in 2014's medical benefit. By adopting a single plan based on high deductibles and health spending accounts, Corporate is putting employees in charge of managing their health spending.

In the driver's seat
It's similar to what happened 30 years ago when Gannett and other employers started offering 401(k) accounts that have effectively replaced traditional pension plans. Today's employees are now expected to do their own retirement planning, including how they invest.

Martore vs. Obama
I don't have a problem with that philosophy: putting employees in the driver's seat. Gannett sells news, information and advertising. It shouldn't be forced to also be a health care provider. But this is the system we've got.

I'm sympathetic to any employer's frustration with government regulations. Briefly during my 20s, I started and ran a small graphic design business with a part-time employee and a medical plan for the two of us. I was angered by all the paperwork requirements to meet local, state and federal workplace regulations -- and that that was in the early 1980s. I'm sure it's worse today.

But facts are facts. Gannett expects its purported 5,000 journalists to question local employers closely whenever they ratchet up consumer costs. Watchdog journalism isn't limited to public governance -- it also extends to corporations, too.

In principally blaming Obamacare for the new insurance plan, Corporate owes 31,000 employees and thousands of retirees more information than they've received so far.

Related: White House details premium costs of health plan in 36 states. Plus: Sen. Cruz's defiant stand is also a lonely one. And: a basic primer on how Obamacare will work.

Tuesday, September 24, 2013

Here is an FAQ explaining medical plan changes

The document in .pdf format was apparently issued today with information about changes coming to Gannett's employee medical coverage in 2014, which affects as many as 31,000 employees.

There's also a second document with examples of how the new plan will work. (I've added both of these to Google Docs, where you can download them anonymously and at no cost.)

For the FAQ section on key plan changes, go to Page 10.

Of considerable interest
From Page 8 of the FAQ:

Question: What are the premiums for 2014?

Answer: Monthly contributions as follows:
  • Employee only -- $90
  • Plus spouse -- $436
  • Plus child(ren) -- $392
  • Family -- $575
Contribution changes:
  • Rates the same across the company
  • Rates no longer based on salary bands or geography
Without knowing what you currently pay per month, I can't say whether these new premiums equal the 20% to 50% increases I was told about earlier today.

This could really hurt
From Page 6 of the FAQ:

Question: How does a participant pay for a medical expense? Explain the process.

Answer: It apparently involves four steps, as follows.
  • A participant has a health event, visits a pharmacy, or doctor for treatment.
  • The participant is responsible for the full cost of his or her health care expenses until the deductible is met. The participant can choose to pay for the medical expense with available funds from their HSA or pay another way and let the HSA grow.
  • Once the deductible is met, the plan coverage begins and the participant and the plan pay co-insurance.
  • The participant is protected with an out-of-pocket limit. After that limit is reached, the plan pays 100% of covered expenses.
Clearly in this case, the dollar amount of your annual deductible is key to understanding your new effective annual medical costs.

Are health insurance premiums rising 20% to 50%?

I'm told employee premiums will jump 20% to 50% starting next year under the just-announced change to Gannett's medical plan for next year. This was from someone who attended one of the human resources web-based seminars that started yesterday.

Can anyone else confirms those figures? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot.com]; see Tipsters Anonymous Policy in the green rail, upper right.

Monday, September 23, 2013

GCI discloses big shift in employee medical plans

This morning, CEO Gracia Martore notified employees of a big change coming to the company's health care benefits next year, which cover up to 31,000 employees. In a letter (text, below), she ties the changes to the Health Care Reform act commonly called Obamacare. It goes into effect Oct. 1, when consumers can start enrolling in new plans offered under the law.

Martore says Gannett will offer one plan it calls the Consumer Choice Health Plan (CCHP), which she says will "offer comprehensive health care benefits and other important services to you and your family."

(I am assuming Gannett's is not the nearly identically named Consumer's Choice Health Plan, which calls itself a "member-governed, health insurance co-op for South Carolina citizens.")

Martore doesn't offer any specific details, including especially costs to employees, so it's impossible to evaluate the significance of the change. She says more information will come starting today and in the weeks ahead.

Who really pays
I obtained a copy of her letter from an employee. Because it's addressed to current employees, I don't know whether similar changes are coming to retiree medical plans.

Gannett is self-insured, which means it pays 100% of all employee medical costs that aren't covered by monthly premiums, co-pays and other deductibles paid directly by employees.

At one time, GCI's share was about 2/3 of all such costs, with employees picking up the rest. I don't know whether that's still true. The annual cost to the company runs into the many multimillions of dollars. That's one reason why Gannett has been laying off or occasionally buying out so many older workers over the past five years: their medical costs are just too high.

Most other employers also are burdened with high employee health care costs, and have been for many years. And some have been using Obamacare as cover to make changes they've wanted for a long time. It will be interesting to see whether Corporate is one of those employers.

Text of letter
Dear Gannett Employee:

The implementation of Health Care Reform will bring significant changes to the health care industry and to health insurance plans. As a result, Gannett, like many other employers across the nation, has spent months evaluating different health care plan options.

In 2014, Gannett will offer one health care plan called Consumer Choice Health Plan (CCHP), which will offer comprehensive health care benefits and other important services to you and your family. Our annual enrollment period this fall will be held Nov. 4 to Nov. 15.

Martore
Many more details will be coming your way in the days and weeks to come. I encourage you to attend one or more of the employee information webinars being held by our Human Resources department every day, Monday through Friday, starting Sept. 24 and running until Nov. 1. In these webinars, you will get a full overview of Gannett’s plan and have the opportunity to ask questions.

Your HR representative will be contacting you about these webinars and in many locations there will be in-person meetings. You should receive your Consumer Choice Health Plan (CCHP) enrollment kit around the first of November.

To further help you and your family get the most out of the plan and have all of the information you need to make informed decisions, we will provide helpful resources such as United Healthcare’s myuhc.com, Gannett’s Benefits website and a mobile app through United HealthCare called “Health4Me,” which will show employees nearby providers, track claims, highlight doctor ratings and more. For more information about Health Care Reform and the Affordable Care Act, go to ALEX, a virtual benefits counselor, on Gannett’s Benefits website.

Best regards,

Gracia

Wednesday, August 07, 2013

Layoffs | A tip about retiree medical coverage

In an e-mail, a reader asked me to post the following for the benefit of older folks recently laid off. I've changed a few details at their request to help keep them anonymous.

Hi, Jim.

When I got laid off years ago, Gannett did not inform me that I was entitled to join the retiree medical plan. (I found out by accident and it was a months-long billing ordeal to get it switched over from COBRA.)

They will tell you only how much it would cost you if you ask. I think age and possibly years of service need to reach a certain point to qualify for it, as opposed to the cost for COBRA.

COBRA, however, runs out after 18 months; the retiree plan covers your medical until age 65. It doesn't cover dental or vision, though, so they would need COBRA for the 18 months that they can get it.

I live in the East, but I presume it applies to everyone in Gannett. I also was never able to get any literature about the plan -- to this day.

The only hint that Gannett offered was after I had signed up for COBRA, when a little asterisked note appeared on the bottom of the Web page about my health benefits that I had "opted out" of the retiree plan.

Related: the U.S. Labor Department's FAQ on COBRA.

Saturday, April 06, 2013

To curb health costs, workers 'pay for being fat'

As they fight rising health-care costs and poor results from voluntary wellness programs, companies across America are penalizing workers for a range of conditions, including high blood pressure and thick waistlines, according to a new story in The Wall Street Journal. They are also demanding that employees share personal-health information, such as body-mass index, weight and blood-sugar level, or face higher premiums or deductibles.

The WSJ story (behind a paywall) continues: "Corporate leaders say they can't lower health-care costs without changing workers' habits, and they cite the findings of behavioral economists showing that people respond more effectively to potential losses, such as penalties, than expected gains, such as rewards. With corporate spending on health care expected to reach an average of $12,136 per employee this year, according to a study by the consulting firm Towers Watson, penalties may soon be the new norm."

Thursday, October 18, 2012

Detroit | Union nixes contract concessions: 'We are down to the Marines, and the Marines need a raise'

Labor unions representing employees at the struggling Detroit newspapers are pushing back on management's proposed two-year contracts that would include only merit raises, rather than across-the-board increases, plus costly changes to medical plans.

On Monday, the two sides met for the first time over new contracts that would replace those set to expire  Nov. 13. The negotiations cover employees in editorial, circulation and the pressroom at the Gannett-owned Detroit Free Press, MediaNews Group's Detroit News, and the Gannett-controlled Detroit Media Partnership.

In a bulletin to union members, negotiators noted that employees covered by the contract hadn't received raises since January 2008. Indeed, they said employees had agreed to pay cuts in November 2010, and also accepted health care concessions that included higher premiums. Last month, the Detroit operations eliminated about 70 jobs through buyouts.

Now, union negotiators say, they won't accept any more concessions.

"The employees have given enough already,'' the bulletin says. "We made sacrifices so the company could deal with changes in readership and advertising and the economic recession. We gave the company breathing room to deal with the new realities of the industry."

GCI's most fragile market
The bulletin continues: "The employees who are left are expected to do a lot more with less, and they are doing it. Now we are down to the Marines, and the Marines need a raise."

Detroit is GCI's most financially challenged market. The dominant auto industry is still recovering after the bankruptcies of Chrysler and General Motors, while the city and surrounding Wayne County have lost 300,000 residents since 1990. At 9.3% in September, the statewide unemployment rate remains one of the nation's highest.

In a risky bid to reduce further losses in 2009, the Detroit Media Partnership -- which handles advertising sales and other business operations for the two dailies -- ended home delivery for all but three advertising-rich days.

Tuesday, May 08, 2012

Kaiser Health reporter seeks your help for story

Jay Hancock, a reporter for Kaiser Health News, asked me to post the following query. You may contact him at the e-mail address he provided. Or, you may forward material to me at jimhopkins[at]gmail[dot-com] and I'll pass it along to Hancock. Here's his note:

I’m working on a story about large employers moving to health plans with deductibles of $1,000 for individuals, $2,000 for families -- or much more. I’m compiling a list of companies that are going in this direction. It’s a big trend for Fortune 500 companies, but often they don’t want to talk about it. I’ve heard that at Gannett, high-deductible plans are the only choice. Gannett declines to comment. Could you please help me crowdsource this? I’d like to confirm that high-deductible plans are the only Gannett option. Ideally I’d like to see documents showing the whole menu of plan choices and stating what the deductibles are. My email is JayH@kff.org and my phone is 202-654-1328. Thanks.

Tuesday, November 08, 2011

Employees report problems with health surcharge

Some Gannett Bloggers have been posting comments today in this thread about being hit unfairly with a surcharge for failing to complete an online health assessment survey with this year's medical care enrollment.

The beef: They completed the survey by the deadline they were given, then found out the deadline was, in fact, earlier. Another reader said they called the Gannett Benefits Center and were told many people had called and were being advised there had been a "technical problem."

One reader said the surcharge amounted to $480 a year, or $40 monthly. Another reader said it was $18.36 monthly; a third said $18.46, and a fourth said $20 per paycheck.

Earlier: Amid rising costs, it's open season on employees.

Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.