Blue Cross Long Held As Gold Standard

JANUARY 2008: With pressure on local government to control the rising cost of health care at an all-time high, much attention has been brought to the insurance companies that provide the coverage for tens of thousands of local retirees and employees.

For generations, Blue Cross Blue Shield (BC/BS) of Massachusetts has been held as the gold standard of health insurance plans. Over the decades, public retirees and employees, like their private sector colleagues, have held their insurance coverage with “The Blues” in very high regard.

Since its founding in 1937, BC/BS of Massachusetts has been viewed by many to be the upper echelon of insurance coverage. Bragging rights were established between friends or within families, depending on which level of Blue Cross insurance was carried.  As it currently stands, the overwhelming majority of local retirees are enrolled in a BC/BS insurance product. While Harvard Pilgrim, Tufts, Fallon and other healthcare plans have made some headway into the municipal insurance market, there is no question that Blue Cross firmly remains the industry standard.

“Public retirees are extremely loyal to Blue Cross. Our local members have been insured with them for as long as they have been working. In fact, many retirees recall their parents being with ‘The Blues’ when they were kids,” said Association President Ralph White, who also serves on the BC/BS Labor Advisory Board. “The history here runs deep and a great loyalty exists, especially at the local level.”

“Most of the requests for assistance are from members enrolled in the state GIC plan,” noted Association Insurance Coordinator  Cheryl Stillman. “It seems that any Blue Cross question is handled by either a human resource person in a city or town hall or by a local Blue Cross agent. Like the state, local retirees, insured by Blue Cross, have ExpressScripts for prescription drug coverage. I do receive a number of local calls regarding prescription drugs. ExpressScripts has been very cooperative whenever I’ve had to contact them.” 

Commitment to Service

With 3,900 employees servicing over 3 million Massachusetts subscribers, BC/BS remains the largest health insurer in the Commonwealth. The non-profit firm holds some 40% of the total insurance market and a whopping 80% of the municipal retirees and employees.

Located in the Fenway section of Boston, nearly 1,000 employees staff the BC/BS headquarters in the historic Landmark Building. Facilities in Hingham and Rockland house the majority of employees, which include the important claims processing and member support centers.

Stephen Shea and Barbara Sbrogna are the Blue Cross directors for labor affairs and municipal sales respectively. Both work closely with local officials and labor leaders to offer affordable high-quality insurance.

“Steve Shea has been the point person for labor relations going back many years. He has helped us work some tough issues during his tenure,” said Association Legislative Liaison Shawn Duhamel. “Barbara Sbrogna also has an excellent reputation at the local level. Everyone in the Blue Cross municipal unit is well regarded and do a fantastic job for local retirees. Our Association has a long standing relationship with the Blues.”

Several years ago, with HMO fever taking place in a number of communities, several smaller towns, seeking to save money, dropped their Blue Cross package and turned over their coverage totally to a local HMO. This left no other option for retirees, except their local HMO, meaning they  lost their greatly-valued Medicare supplement - Medex. Blue Cross, which normally does not offer Medex as a single entity in a community that does not have other Blue Cross products, changed their practice and agreed to offer Medex in these towns.“This was a big dilemma at the time,” said White. “These communities showed little concern for their retirees. A Medicare supplement, which was widely recognized in our country, namely Medex, was a must for these retirees.

“Not wanting to leave these retirees in a lurch, the Blues agreed to change their practice and agreed to reinstate their Medex coverage in these communities. In other words, Blue Cross came to the rescue of retirees in the same towns that had rebuffed them.”

Kevin Regan, a firefighter and chairman of the Westfield Retirement Board, also serves as the chairman of the Westfield Insurance Advisory Committee, attested to the strong loyalty to BC/BS that exists at the local level. “In the 37 years that I’ve been working for the City of Westfield, we’ve never had an insurer other than Blue Cross. From time to time we’ve been approached by other carriers, but none have been able to offer us a product as good as Blue Cross.

“The employees and retirees have griped whenever there is a premium increase, which is only natural. But they cherish that Blue Cross card, and there is always an uproar when the mayor even mentions the possibility of looking at another insurer.”

Blues Fight Back

The mounting pressure to control insurance costs resulted in a new law (Chapter 67) being passed this past July, which encourages local communities and districts to join the state’s Group Insurance Commission (GIC), instead of maintaining local insurance plans.

Governor Deval Patrick, among others who support local participation in the GIC, points to the state’s ability to keep insurance costs below state and national averages, as a reason why local communities should insure their retirees and employees under the state plan.Chapter 67, which was supported by our Association, allows each municipality, district, and authority the local option to join the GIC through a process known as coalition bargaining. As we have previously reported (see page 6), local retirees have a representative in the bargaining process, who wields an automatic 10% vote.

“Our position is that one size does not fit all when it comes to local health insurance. What may work well for one community, may be a bad idea for another”, said Duhamel. “The quality of the plans and services offered by Blue Cross is a major factor to consider.

“Blue Cross has been unfairly criticized by some as being responsible for the high cost of local insurance. We feel the blame is misplaced and are glad that the Blues are not only fighting back, but, more importantly, are working to offer high-quality, yet affordable health plans.” In response to local concerns, BC/BS has announced a series of new insurance products called Municipal Blue, which are tailored to the modern needs of local communities. Through a series of local forums, Blue Cross officials spent the fall meeting with local officials and labor leaders to explain their new approach.Under Municipal Blue, three insurance options are offered that provide varying levels of coverage and different cost models. Each option provides the standard level of coverage, which is required by MGL Chapter 32B (local insurance law).

However, BC/BS has enhanced their offerings by including coverage under Dental Blue as a standard insurance feature. Company officials point to studies that indicate oral health is an important factor in overall health, as the reason why dental coverage is offered.

In a recent editorial, John Coughlin, who is the BC/BS vice president of select markets, acknowledges and compliments the job the GIC has done to “address cost and quality issues” in health care. “The GIC does a great job for state employees and actually may be a solution for some municipalities,” writes Coughlin. “But municipalities should examine all available options to save on health insurance costs.”

Coughlin goes on to state, “For those communities that want to retain local autonomy and realize savings similar to the GIC, please take a look at Municipal Blue…Municipal Blue can provide immediate cost savings without relinquishing local control of health care benefits and costs.”

“Our position on the issue of local insurance is clear. Each community needs to examine their own situation, gather the facts, and not jump to any rash conclusion,” says White. “Local retirees play a central role in these discussions, either as part of coalition bargaining or through the traditional Insurance Advisory Committee (IAC).“It’s obvious Blue Cross is dedicated to local retirees. We applaud their efforts and will keep working with them to make sure our members have the best health insurance available.”