University of Southern California Dissertations and Theses

The Selection, Administration And Content Of Health Insurance Plans For Public School District Personnel

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The Selection, Administration And Content Of Health Insurance Plans For Public School District Personnel

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Content 19 61 uadurey aluoa;; aauip.*-j jCq qi}9iJj{rjOQ THE SELECTION, ADMINISTRATION AND CONTENT OP HEALTH INSURANCE PLANS FOR PUBLIC SCHOOL DISTRICT PERSONNEL A Dissertation Presented to the Faculty of the School of Education The University of Southern California In Partial Fulfillment of the Requirements for the Degree Doctor of Education by Palmer George Carapen June 1961 This dissertation, written under the direction of the Chairman of the candidate’s Guidance Committee and approved by all members of the Committee, has been presented to and accepted by the Faculty of the School of Education in partial fulfillment of the requirements for the degree of Doctor of Education. Date June., 1961 ( t tiidant f (trim m i l t < v ■ ) Dean DEDICATION OP THIS STUDY I would to dedicate this study to my wife* Marilyn, and my daughters, Julia and Claudia, for their patience and under standing during the many months of Its preparation. TABLE OF CONTENTS Page LIST OF TABLES ix LIST OF ILLUSTRATIONS x Chapter I. THE PROBLEM AND THE ORGANIZATION OF THE The Problem Statement of the problem Importance of the problem Delimitations Hypotheses Assumptions Definitions of terras Health plan Health insurance Health and welfare plan Basle servloe plan Nonprofit service hospital plan; nonprofit service medical plan Corridor Deductible Co-inauranoo Comprehensive major medical (first dollar) coverage Supplementary major medical Group practice plan Closed panel Open panel Service corporation Restricted type of health plan Unrestricted type of health plan Prepaid health plan Fee-for-service Social insurance STUDY 1 111 Chapter II. III. Page Indemnity insurance Accidental death and dismemberment inauranoe Foundation type of health Insurance Superimposed supplementary major medical ooverage Relative Value Study Higli option, low option Premium rate Subscriber Fee sohedule Brand or package health plan Conversion privilege Utilisation Anoillary services Assignment by form Waiting period Quality control Reserves Accident rider Surcharge Premium tax Community rating Experience rating Blanket deductible Blanket co-insurance Excess (Insurance) clause Consultant Organization of The Study THE PROCEDURE. . . . . . . . . . . . . . - 21 Introduction Gathering information on the problem Developing the questionnaire The sample Administering the questionnaire Subsequent procedures REVIEW OF THE RELATED LITERATURE ..... 31 Beginnings of Health and Welfare Pro grams Health Insurance developments» 1850-1910 iv Chapter Page Subsequent Development of Health and Welfare Programs Health Insurance developments, 1910-1930 Health Insurance developments, 1930-1951 Types of Health Insurance Plans Background Information Nonprofit hospital and physicians ooverage Indemnity coverage Group practice coverage Individual commercial policy coverage Federal Legislation Affecting Health Insurance Plans Social Insurance, or Compulsory Insur ance School Dlstriots and Health Insurance Recent Trends in Health Insurance Medloal Care for the Aged and the Canadian Plan Dental Care Insuranoe Evaluation of Health Insurance Flans General evaluation Principles of health Insurance Quality control of health plans Education of subscribers regarding benefits of health plans Benefit provisions Dental Insurance coverage Other References Chapter Suwnary IV, INITIATION OF A HEALTH PLAN............. Introduction Plans and Procedures v 149 Chapter Page Committee selection The bid Self-insurance Cost Rates Composition of the bid Chapter Summary V. ADMINISTRATION OP THE HEALTH PLAN......... Introduction Area of Administration Identification Forms Payment of Claims Information Regarding The Health Plan Communication of information Informing new subscribers Billing Payment of Premiums Benefits Received Reserves How A Plan Is Rated Health Plan Longevity Chapter Summary VI« THE BASIC SERVICE TYPE PLAN AND/OR SUPPLEMENTARY MAJOR MEDICAL COVERAGE • . Introduction Pattern of Presentation Hospital coverage Surgical coverage Medical coverage Diagnostic X-ray and laboratory coverage (inclusions and exclusions) General coverage Special coverage Dental coverage Chapter Summary VII. COMPREHENSIVE MAJOR MEDICAL (FIRST DOLLAR) COVERAGE o * vi 161 176 229 Chapter Introduction Pattern of Presentation Hospital coverage Surgical coverage Medical coverage Diagnostic X-ray and laboratory coverage (inclusions and exclusions) General coverage Special coverage Dental ooverage Chapter Summary VIII. GROUP PRACTICE HEALTH PLANS INCLUDING CLOSED PANEL, OPEN PANEL, RESTRICTED AND UNRESTRICTED TYPES, FOUNDATION FOR MEDICAL CARE, SELF-CONTAINED UNIT, HEALTH CARE PREVENTATIVE TYPE PLANS. . . Introduction Pattern of Presentation Hospital coverage Surgioal coverage Medical coverage Diagnostic X-ray and laboratory ooverage (Inclusions and exclusions) General coverage Foundation for medical care coverage Special ooverage Dental coverage Chapter Summary IX. SUMMARY, FINDINGS, CONCLUSIONS AND RECOMMENDATIONS. Summary The problem The procedure Findings Background development Instituting a health plan Page 273 315 vli Chapter Page Administration of a health plan Types of health plan coverage The baslo service type plan and/or supplementary major medical oovaraga Comprehensive major medical (first dollar) coverage Group practice plans Conclusions Recommendations BIBLIOGRAPHY ®©©o®®»©«»«*®o©o®©>o©® 353 APPENDICES • • • • • • • • • • • • • • • • • • ■ • 339 APPENDIX A©©©®®ooo®®®®o®©®»©« 3*70 APPENDIX - 4 : 5 3 APPENDIX C a o b ©©®*'©©©®'*®®®*'©'©© 4o0 vili LIST OP TABLES Table Page lo Percentage of Peraona in Each Geographic Region with Voluntary Health Inaurance by Type of Coverage............. 36 2* Number of Persons in the United States Having Hospital Expense Protection, by Type of Insurer, 1940-1958............... 92 3* Number of Persons In the United States Having Regular Medical Expense Protection by Type of Insurer, 1940-1958 • ••.•• 95 4a Number of Persons In the United States Having Major Medical Expense Protection, 1951-1958 . . . . . . . . . . . . . . . . 97 5® Number of Primary Insureds and Dependents Protected by Health Inaurance In the United States In 1952-1958........... 98 6* Private Expenditures for Medical Care and Voluntary Health Insurance, 1948-1958 . . 106 7. Survey of Current Business— Medical Care and Death Expenditures, 1956-58 • • • . « 108 8„ Methods of Financing Group Insurance Plan Costs to Employers and Employees, Stato of California, 1958—59. 109 ix LIST OF ILLUSTRATIONS Figure Page 1. Public Health Inaurance Profile: Extent of Health Insurance Coverage in Families. « . » ......... . . . . . . . . 82 20 Growth of Major Medical Expense Coverage in the United States from 1951 to 1958. • 94 3, Growth of Hospital, Surgical, and Regular Medical Expense Protection in the United States from 1940 to 1958* . . . . . . . . X02 4. Per Cent of Health Insurance Plans Pro viding Hospital Benefits to Active and Retired Workers and Their Dependents In Late 1955 and Early 1959. . . . . . . . . Ill 3 T . CHAPTER I THE PROBLEM AND THE ORGANIZATION OP THE STUDY The Problem Statement; of the problem The purpose of this study was to analyze the types of health Insurance plans available to school districts and other selected agencies, with particular emphasis upon the initiation, administration, and content of such in surance plans. This objective was to be accomplished by means of a comprehensive resume of available written sources, by personal Interview, and by means of an Inten- slve first-hand survey of a highly selective sample of school districts, cities, and counties In an effort to determine trends® More specifically, the study searched for answers to the following questions: I® Yifhat major health plans are now available to school districts in the United States? 2. What criteria can be developed for the 2 determination of an acceptable health Insurance plan? 3. In what geographic areas are health Insurance plans available? 4. What basic elements characterize available types of health insurance plans? 50 What are the advantages and disadvantages of existing health insurance plans which are now available to school districts and to other local governmental agencies? 60 What steps are required and/or advisable in instituting a health insurance plan in a school district or other organization? 7. What factors are pertinent to the successful administration of health insurance plans? 8, Is it practicable for a school district to underwrite a health plan on a self-Inaurance basis? If 30, under what conditions? Importance of the problem As recently as half a century ago, the average citizen In the United States lived In an agrarian society, the units of which were predominantly small communities. The citizen fortified himself against the crippling costs of Illness by saving money® With a modest savings account 3 on hand, It was not impossible for the average thrifty citizen to pay for the medical care he needed. Major surgery in the pastoral backdrop of the agrarian society was not common, and the services of the anesthetist, the roentgenologist and the diagnostician were seldom used* A well-staffed hospital was a rarity. Treatment, even for chronic illness, was relatively inexpensive and of limited extent. The substantial advances made In medical science during the past half-century have brought extensive Im provements in diagnostic and laboratory techniques, have brought Into existence a great number of well-staffed hos pitals, and have added a multiplicity of new drugs and medicines. The entire spectrum of medical care has changed radically. Of necessity, medical care has become a highly specialized and costly operation. Sickness and Its attend ant financial burdens often spell financial ruin for to- day's family, if it must use its own savings to meet the emergency. Even the finest program of budgeting is usually inadequate to meet today's expenses for medical and hos pital care. Some type of financial budgeting on a broad group basis has become a necessity. Private Industry early recognized the problem and sought to alleviate it through the benefits of health in surance. Governmental agencies, traditionally slow to 4 make innovations, even those affecting the welfare and well-being of employees, have within the past few years recognized the need for health care and in selected in stances have made some strides In closing the gap between industry and government in this respect. The present investigation of the extent and type of school district participation in health insurance plans was undertaken after it had been ascertained that, to date, no over-all study of the problem has been made, and that no single compendium of data pertaining to health insur ance plans had been made available to school districts,., Delimitations The questionnaire investigation has been delimited to cooperating school districts in the United States which met the criterion of having at least 30,000 pupils In average dally school attendances Cooperating cities and counties selected on a national basis also participated,. Hypotheses In initiating the study, the following hypotheses were formulated: 1. There are no health insurance plans designed especially to meet the Insurance needs of school districts. 2. There is a need for an analytic investigation of the initiation, administration, and content of health insurance plans suitable for school districts. 3. A health insurance plan is needed which is tailored to the specific requirements of school district employees, a plan which differs in certain respects (content and administrative features) from that suitable for large govern mental and industrial organizations® 4® There is need no develop procedures for the selection and administration of health insur ance coverage for school districts. Assumptions The following assumptions were made in conducting the inveatigation: 1. Employees of school districts and of other governmental agencies look favorably upon ex tended fringe benefits and upon higher wages, considering the former to be a part of their regular compensation. 2. Health insurance plans can fulfill a need for adequate employee protection against the ox- pensos incurred when illness and accident occur to the employee and hi3 family. 3. Insurance carriers, whether of the nonprofit service or indemnity type, are interested in providing health insurance coverage for govern mental and school district employees. 4. With rising costs of medical care, school dis trict employees increasingly will demand more comprehensive health Insurance coverage, fur nished by the school district. 5c, A wide variety of health insurance plans has been established In school districts through- out the United States. Definitions of terms Because many of the terms common to the field of insurance may be unfamiliar to those In public education, a number of terms are here defined. Health plan.*— The term health plan, or health In surance plan, Is used to denote all types of health In aurance plans, whether the carrier Is a commercial company a nonprofit organization, an employee group, or another type of firm. Health insurance.— Used here synonymously with the term health plan, the term health Insurance plan refers to any or all types of health insurance designed to protect 7 the Individual or group against the expense of Illness, accident, or other health risk* Health and welfare plan*--Used synonymously with the term health plan, the term health and welfare plan has been commonly used 3n management and labor negotiations and In federal and state legislation, especially during the late thirties and early forties. The term i3 some times used interchangeably with health and accident plan. Basic service plan.— The basic service plan refers to the type of health plan that does not indemnify (or make direct payment to) the subscriber. A prepayment arrangement is mad© with the subscriber for the carrier to pay the hospital or doctor directly for services per formed on behalf of the subscriber. The word "basic" de notes that fundamentally the coverage takes care of basic needs but Is not comprehensive In coverage. This type of plan Is also known as the "nonprofit service hospital or medical plan." The well-known Blue Gross and Blue Shield plans are of this type. Not always thought of as "insur ance" plans, in a commercial sense, such health plans are properly health insurance plans. Nonprofit service hospital plan; nonprofit service medical plan.--Also known as the "basic service plan," the nonprofit service hospital plan and the nonprofit service medical plan are health insurance plans developed and administered by a nonprofit-making organization operating within the nonprofit statutes in a designated area* No premium taxes are levied against such an operation, in contrast to the indemnity type of Insurance operation. The well-known Blue Cross and Blue Shield plans fall with in thi3 definition* Corridor.--The term "corridor" refers to the amount of out-of-pocket expense that the subscriber must pay before the superimposed supplementary major medical plan becomes applicable. If a fifty-dollar corridor is established, then when the basic service benefits ares ex hausted by the subscriber, he must pay $50.00 out of his pocket as his own direct expense before the supplementary major medical benefits can apply. Deductible.— In a hoalth insurance plan the term "deductible" is applied as it Is commonly used with re- spoct to automobile, fire, glass and other casualty cover age. The first deductible amount agreed upon (possibly $50.00) is subtracted from the health expenses before the health insurance benefits become effective. For example, if a subscriber incurs a $125.00 health expense and his straight $50.00 deductible is applicable, he must pay the first $50.00 himself, and the insurance carrier must pay the remaining $75.00® Co-insurance.— Co-insurance refers to the sharing of expense between subscriber and insurance carrier. If the group has an 80-20 co-insurance plan in effect, the Insurance carrier pays 80 per cent of the expenses and the subscriber pays the remaining 20 per cent. Comprehensive major medical (first dollar) cover age.— As the words "first dollar" would Indicate, the com prehensive major medical (first dollar) plan carries very broad coverage. It contains usually a few deductibles or co-insurance features and provides for upper limits within a $5,000 to $35,000 range® This type of plan is not al ways defined clearly in the literature; it is sometimes described as a major medical type and sometimes as a major medical (supplementary) type. In the former case, cover age eliminates the use of corridors or deductibles before the cash benefits of the plan become operative. General ly, this type of plan is comprehensive In its coverage In such areas aa hospital, surgical, medical, laboratory and diagnostic care® In many cases, however, it does not fully provide the benefits of preventive and rehabilitative coverage. Supplementary major medical.--The supplementary major medical type of health insurance plan uses a deduct ible or corridor feature as a direct expense to the sub scriber before cash payment benefits begin® Usually there 10 la also a co-insurance feature in which the subscriber and the carrier share the costs on an 80-20, 75-25, or other percentage basis, the larger percentage being assumed by the carrier. "First dollar" expenditures are usually not covered in this type of health plan; therefore, it is dis tinguished from the comprehensive first dollar coverage by many health plan representatives. The supplementary major medical upper limits are often similar to those of the comprehensive first dollar coverage ($5,000 to $35,000). The scope of coverage (l-e., hospital, surgical, medical, diagnostic, or other special coverage) may or may not be as broad as that of the comprehensive first dollar plan. Group practice plan.— Group practice plan refers to the type of health insurance that usually includes pre ventive, diagnostic, and curative coverage in a broad sense* A group of professional doctors, technicians, and other specialists work as a team in a medical center, pooling their knowledge, experience and equipment, as vie 11 as their earnings. This type of plan is also referred to as a "self-contained health plan." Closed panel.— Usually associated with the group practice type of health insurance plan in which treatment is limited to member subscribers, the closed panel plan may Include hospital, surgical, medical, diagnostic, 11 general, special, and dental coverage. Member doctors and other professional staff members of the closed panel treat only member patients who are members of the plan. The professional staff usually carries on no solo practice. This type of service is sometimes referred to as "restrict ed panel," or "restricted health plan." Open panel.--The open panel type of care is given by a professional staff of doctors and related personnel who may treat subscribers of a particular health plan group, but Y/ho also engage in solo practice and thus ren der professional services to patients who may belong to no health plan. The professional medical staff and re lated personnel are members of the health plan In an open panel, but are not limited to rendering professional serv ices within the specific plan alone. Service corporation.— The service corporation is an open panel type of health insurance plan and is particu larly appropriate to the professional dental field. Restricted type of health plan.— Restricted is another term used in referring to the closed panel type of health plan. It is usually associated with a group practice type of plan. Unrestricted type of health plan.— Sometimes re ferred to as the open panel type of health plan, the unre stricted plan Is usually associated with a group practice 12 type of health insurance. Prepaid health plan.— Under a prepaid health plan regular periodic payment is made by the subscriber, usual ly through payroll deduction, whether or not health ex penses are incurred. Prepaid health insurance is the most common method of payment today in the health plan field. Fee-for-servlce.— •Sometimes referred to as payment due at the time services are rendered, the fee-for-service method of payment is in contrast to the prepayment plan. Social insurance.--Social insurance refers to the type of health insurance (usually compulsory in nature) developed by federal, state, or local legislation. State workmen's compensation and disability plans fall within this classification. Indemnity Insurance.--The typo of health insurance referred to as indemnity insurance is usually written by private insurance companies. Here the insurance company indemnifies the subscriber (I.e., pays him directly) for authorized health expenses. Generally the insurance com pany makes direct payment to the hospital, doctor, or other designated person directly only upon assignment from the subscriber. Most health plans written by private In surance companies incorporate the indemnity principle. Accidental death and dismemberment Insurance.-- Accidental death and dismemberment insurance is a type of 13 apodal coverage for accidental death (usually while on the job). Such coverage can also extend to off-the-job accidental death. Dismemberment insurance is usually written for loss of limb or other specified parts of the body. A dollar amount is customarily paid In the case of death, or a specifically scheduled dollar amount for loss of specific body facilities. Foundation type of health inaurance.--Operative particularly in the state of California, the foundation plan for medical care is one set up by medical profession al personnel to develop quality control of professional judgment and costs. Specific standards are established by the foundation. Qualified medical personnel may apply for membership in the foundation on a year-to-year basis. All medical services rendered by members are reviewed by qualified medical men within the foundation to determine if professional judgment and reasonable costs have been rendered. Reputable insurance carriers, whether profit or nonprofit, can operate within the foundation plan for medical car© program as long as they meet minimum stand ards set by the foundation. Claims are reviewed as indi cated above, and paid by the foundation office which acts for the insurance carrier. Only professional members of the foundation can render services to health plan members 14 Superimposed supplementary major medical cover- •ge.— A supplementary major medical plan can be superim posed on a health plan Independent of any other type of In surance covering a group* In many cases, the major medi cal ooverage la superimposed over a basic service type of plan such as Blue Cross and/or Blue Shield* When the bene fits of the basic service type of plan have been exhausted, the superimposed supplementary major medical coverage pro vides health protection, subject to whatever limitations (deductibles, co-insurance, and so on) may have been Im pose dB Relative Value Study*--One of the most comprehen sive studies made to date in the field of medical services is the Relative Value Study developed by the California Medical Association in an effort to establish a relative scale of units which can be translated into costs for the many professional services rendered In the areas of pathol™ ogy, surgery, radiology, and other medical specialties* High option, low option*--A health plan may contain a high option and a low option* These options are distin guished by the amount of ooverage (benefits) specified and call for a corresponding differential In premium rate* Premium rate*— Premium rate refers to the cost of the health Insurance to the subscriber or agency that as sumes the cost for th© subscriber* 15 Subscriber*--The subscriber is the member of a health plan. He may be referred to as the patient, the member, the employee, or even the dependent. Ordinarily, the dependent is considered as separate from the employee- subscriber of the health plan. Fee schedule.--The fee schedule is the listed amount allowed (usually a fixed dollar limit) for the per formance of a professional health service. Brand or package health plan.— The term "brand" or "package health plan" refers to a health plan that is of fered by a carrier not as a result of tailor-made specif1- cations. It usually provides for certain listed benefits at specified cost. Optional coverage may be available under certain conditions and at certain costs. Conversion privilege.— -Conversion refers to the privilege of the subscriber, upon termination or retire ment, to convert from a group plan to either an individual health plan with the same carrier or to the same group plan as a retired employee with the 3ame or adjusted bene fits at the same or adjusted premium rate. Utilization.--The utilization refers to the extent to which the health plan or its special areas of coverag;e may be used. There may be an under-utilization or over- utilization of certain provisions. An example of over- utilization of hospital confinement provisions would bo 16 evident when a patient remained In the hospital more days than were necessary. Ancillary services.— Ancillary services are health services performed in the hospital other than the provision of room and board; they include such items as laboratory work, drugs, dressings, medicines, and similar items. Assignment by form.— The subscriber may assign h33 rights to indemnity or payment for health services to the hospital, the doctor, or other particular assignee. Waiting period.--The waiting period is a control feature in health plans which designates a specific period of time before coverage or benefits will apply. Quality control.— Quality control refers to the evaluation of professional services and costs rendered to subscribers. Such a control may be applied by a qualified committee set up by the group or other agency which con ducts periodic evaluations to determine that hospital, medical, surgical, dental and special coverage are being administered (and costs established) in accordance with the highest ethical and professional standards. Such evaluation includes personnel, equipment and plant facili ties® Reserves.--As used here, the term reserves refers to monies held in reserve to pay for claims or losses that cannot be determined easily in current health plan operation* Accident rider*— An accident rider is a separate special coverage or benefit for expenses incurred because of an accident, either on or off the job. Surcharge*--A nominal charge for services per formed where some type of control to avoid abuse is used is referred to as a surcharge* Premium tax.--A premium tax is a tax on the health insurance premium other than for nonprofit health plans. It is usually levied by a governmental agency* Community rating*--Premium rates are based in part on the loss experience or claim-premium experience of a community for several group health plans. The rating could cover a local community, a region, an entire state, or even a larger area. Experience rating.--Experience rating refers to the claim-payment loss of any one specific insured group, used in determining premium rates. Blanket deductible.--The term blanket deductible refers to a deductible amount that applies to all benefits regardless of area of coverage (I.e., hospital, surgical, medical, laboratory, diagnostic, or general or special). On the other hand, a blanket deductible may be so stated as to avoid certain full-coverage areas, the blanket cover age applying to all other benefits. 18 Blanket co-insurance.— The co-insurance feature may be applied to the over-all coverage of the health plan, in which case it is referred to as blanket co-insurance. Excess (insurance) clause.— To avoid possi le dup lication of benefits, especially in the case of dependents, an excess (Insurance) clause may be inserted stating that insurance coverage will apply only in case it is not al ready covered under another Insurance policy. Consultant.--A person who specializes in the study of health plans and who is acting as an independent con tractor without any one or group of health insurance poli cies to sell is referred to as a consultant. This would not include an agent, broker, or sales representative act ing in the capacity of one who had one or more plans to sell. A true consultant should be acting independently of pressure or prejudice involving insurance benefits, rates, or- foes to himself or his firm. Organization of the Study The dissertation was developed according to the following arrangement of chapters. Chapter I has stated the problem, its importance, delimitations, hypotheses, and assumptions together with definitions of terms® 19 The procedure is described in Chapter II. The sources of data, data-gathering procedures, questionnaire development, and treatment of the data are all described. In Chapter III are presented the results of a re view of the literature pertaining to the selection and ad ministration of a health Insurance plan and an analysis of trends and content. Chapters IV through VIII are devoted to a presen tation of survey results as they pertain to trends In selection and administration of health insurance plans and to the content of plans. Chapter IV deals with the initi ation of the plan; Chapter V with its administration; Chapter VI with basic service and/or supplementary major medical types of plans; Chapter VII with comprehensive major medical (first dollar) plans; and Chapter VIII with the group practice type of plan. The latter includes the foundation type and other related types. The summary, findings, conclusions, and recommen dations based on the findings are set forth in Chapter IX. The scope of the study was so broad that no de tailed presentation of questionnaire responses was planned for this dissertation. The decision was made, rather, to confine the presentation to a consideration of broad trends, in the interest of providing a basis for a compre hensive understanding of existing practices, trends, and 20 content of insurance coverage. The impressive growth of health insurance plans, and the rapid changes occurring in all areas of the health insurance field, make it imperative that educators develop an awareness of the problem and a working relationship with the subject, for it is quite likely that all will sooner or later become involved in some aspect of the problem. CHAPTER II THE PROCEDURE Introduction Under the guidance of Mr* Robert Fisher, Person nel Director, Personnel Commission, Los Angeles City Schools, and of Dr* D* Lloyd Nelson, Professor of Educa tional Administration, University of Southern California, the topic of health insurance plans and programs in se lected school districts, cities, and counties was placed under study* Mr* Fisher, Chairman of the Personnel Re search Committee of the Association of School Business Officials of the United States and Canada, was instrumen tal in getting the Association to agree to sponsor the study* Copies of a prospectus wore submitted to Dr® Nelson, Doctoral Committee chairman, and to Mr. Fisher for criticism* On the basis of their suggestions, modi fications were made and a second prospectus prepared* The second draft was approved by Dr* Nelson and Mr* Fisher for submission to the Board of Directors of the Association of School Business Officials for study and approval* 21 22 Association approval was subsequently granted at Its board of directors meeting in I960* Subsequent to the association1s approval the study was submitted to the doctoral study committee composed of Dr* D* Lloyd Nelson, chairman, Dr. Emery Stoops and Dr* Raymond C* Perry, mem bers, for their acceptance* Approval was granted by the doctoral study committee* Gathering information on the problem In the Interest of gaining an orientation to the content of health insurance plans throughout the United States, move than 200 separate plans were studied. Seventy-two letters were written to agencies, or ganizations, and individuals throughout the nation and Canada to obtain representative plana and other informa tion relating to the subject of health insurance* Replies wore received from each contact* Contacts were made with Insurance companies which were writing a substantial pro portion of health insurance; with state governments which had or were contemplating health Insurance plana; and with oounty and local governments which were interested in health insurance plans, which had in many cases already established such plans in their jurisdictions* Contact with several departments of the federal government brought forth a wealth of material on health and welfare plana* 23 Assistance of a local Blue Cross service repre sentative was helpful In gathering and sifting information in the local area* Replies to the researcher's Inquiries from numer ous sources were prompt and fulfilling. After approximate ly six months of detailed study, the need was felt for attendance at conferences and discussions to learn at first hand about current health insuranoe developments from well qualified persons* Personal oontacts were made with Mr. Fred Ward and Mr. John James of the county of Los Angeles. Los Angeles County was at the time in the midst of a study concerning adoption of a health plan of its own. The studies being made by its committees were most helpful* Mr* William Tandy, who had been one of the administrative leaders In health plan studies made by the city of Los Angeles, was also helpful in giving further direction and information. Contact was made with Mr* Ted Ellsworth, attached to the Department of Industrial Relations, University of California at Los Angeles* He was most helpful in furnish ing materials on current developments in health insuranoe plans* Through the efforts of Mr. Fisher, the researcher was invited to attend the convening of the Governor's Committee on the Study of Medical Aid and Health for the 24 State of California, which met at San Francisco on April 2, I960. This meeting was attended by the Finance and Organization Task Foroes of the oommlttee. A day-long series of sessions was held and much valuable information was obtained. In addition, many valuable personal con tacts were made and interviews held with representatives of group insurance plans and major insurance companies, service type plan executives, and men with a keen interest and ability in the health field, who were all assembled under the chairmanship of Dr. Roger 0. Egeberg, Los Ange les County Health Officer. Later, In discussions with Dr. Schuyler Joyner, Business Manager, Los Angeles City Schools, valuable di rection was given to the investigation. Mr. Clifford Allen, Insuranoe Supervisor of the Los Angeles City Schools, supplied considerable written information con cerning health insurance plana® On May 20 and 21, 1960, a conference workshop was attended in Santa Monica, California. The subjects in cluded new developments and problems in negotiated health and welfare plans. Medical men, ranking insurance com pany executives, and representatives of top management and labor were present to take part in an exchange of ideas on the problems and developments In medical ears throughout the United States® Contact mad© with Mr® A® B® Halverson, 26 Second Vice-President* Occidental Life Insurance Company, later proved to be extremely helpful to the researcher in a critique of the questionnaire. Developing the questionnaire The initial plan was to survey the field by means of a questionnaire. As actual questionnaire construction began* it became apparent that the problem was too complex to treat in a single instrument. At the outset it was therefore deoided to split the questionnaire into three major sections: (1) institution and selection of a plan., (2) administration of a plan* and (3) content of a plan. Later It became evident that the task of placing the contents of all types of health Insurance plans in one section would create a questionnaire too cumbersome to use. For this reason* a further classification of the third section (contents of plana) was made and three sub sections were identified: (1) basic service plana and/or supplemental major medical coverage* (2) comprehensive major medical (first dollar) ooverage* and (3) group prac tice plans. It was realized that this design would create a voluminous questionnaire. However* since it was thought best to retain the content coverage of the health plan investigation* it was decided to be extensive in the items of the questionnaire rather than selective® Selectivity 26 of items did not seam to lend Itself to determining which queatlone of content would prove to be moat significant* Further study was made of the questionnaire while personal Interviews were held with educators in the Orange County (California) are*. regarding their experience with health insurance plans* One entire panel meeting of the Orange County Public School Business Officials# a unit of Section 3 of the California Association of Public School Business Officials# was devoted to health plana in Orange County* Valuable materials# including duplicated papers and report© of panel discussion# were made available for use in this investigation* Mr* Bruce Shepherd of the Life Insuranoe Associa tion of America sent valuable data through Mr. A. B. Halverson* Mr® Ted Ellsworth# Coordinator of a two-day dental conference and workshop sponsored by the University of California at Los Angeles Department of Industrial Rela tions# held at the Statler Hotel in Los Angeles on April 29 and 30# 1960# invited the researcher to attend. Similar to the Medical Care Conference held in Santa Monica# this dental conference was attended by exec utives in the fields of management# labor and dentistry# and by other personnel directors* Much useful printed and duplicated matter was made available® 27 A first draft of the questionnaire, comprising five parts, was sent to a jury of specialists for examina tion and oommant, Those chosen and consenting to review the draft were Mr, Clifford Allen; Mr, Robert Fisher; Mr, A, B, Halverson, whose chief actuary and four other staff members also contributed succinct oritlques; and Dr, D, Lloyd Nelson, Many helpful suggestions and comments were received from this "Jury," On the basis of the jury orltlque, the question naire was revised and duplicated. It was believed that the three content sections of the questionnaire, If sent together, might be best answered by an insuranoe techni cian, It was suggested that the appropriate content sec tion (depending upon the type of plana offered by the or ganization) be sent by the cooperating respondents to the Insurance carriers for answering* The decision was made to retain the entire five-part questionnaire and male© the study one of specialization rather than of broad numerical sampling. The sample Since the questionnaire was to be most comprehen sive and the results of the sample were to be consider ably detailed, It was decided to enlist the cooperation of a highly selected group of respondents. Contact was mad© 88 with selected school districts, cities, and counties who pledged their cooperation In this study. Twenty-seven such responding agencies provided the basis for the select sample. All school districts Included In the selection had over 30,000 in average daily attendance; oitles and counties had populations of over 100,000, The areas in cluding the New England states, Eastern Seaboard, central, southern, western, and far-western United States regions were represented. Administering the questionnaire Mr* Fisher and Dr, Joyner wrote personal letters to assist in the establishment of the cooperating agencies* Mr, Fisher also enlisted the assistance of Mr, Kenneth Warner, Director, Public Personnel Association, to contact cities of over 100,000 population that might be interested In cooperating in the study, A covering letter for each questionnaire was developed, A short instruction page was also developed separately for school districts and for cities and coun ties, The Instruction letter indicated that the study was Interested only in health insurance plans sponsored and/or financially supported in whole or in part by the school district, oity, or county, Mr, Fisher arranged for machine tabulation to b@ 29 mad* of the responses to Sections I and II* Responses to Sections III, IV and V were tabulated by hand* Subsequent procedures At the October meeting of the Association of School Business Officials of the United States and Canada held in St. Louis, Missouri, the researcher was asked through the joint sponsorship of the Insurance and Per sonnel Committees of the association to present a report to the conference* He was also asked to present a similar paper to the California Association of Public School Bub I- ness Officials at its annual conference held in Los Ange les in April of 1961* In November, 1960, the researcher attended a national conference in San Francisco of the American Pub- lie Health Association. At this conference workshops and section meetings were held pertaining to medical care® Much valuable Information was obtained, both In terms of printed material and discussions of health insuranoe plans* In order to provide a well rounded study in addi tion to the questionnaire responses from the cooperating agencies, the following investigations were conducted: 1* Personal interviews were held with twenty- seven insurance company executives, city, county, and school district personnel directly connected with health plana* 2. Intensive oaae studies of thirty-nine insur ance plans containing a variety of provisions and approaches to the health plan problem were made* The thirty-nine plans studied were the intensive portion of the more than 200 health plans reviewed* 3. Seventeen conferences were held with groups who now have health plans* are directly con- neoted with their sale* or who act as consult ants in the health plan field* Such Investigations were moat fruitful in provid ing much information regarding the current practices in Initiation* administration* and content areas of health plans. Such Interviews and investigations also provided valuable insight into the future of the health plan field and herald the new directions that seem to be developing on the health plan horlaon® CHAPTER III REVIEW OF THE RELATED LITERATURE Beginnings of Health and Welfare Program* The evolution of health and welfare programs in the United States began In the early eighteenth century* As indloated by Janis and Roemer, The earliest efforts to oushlon the risk of sickness were made by workers themselves in the late 18th and early 19th century* • • • They first took the form of mutual aid societies which paid last benefits to the family on the death of the breadwinner (for burial expenses and general aid). Later cash benefits were paid in the event of prolonged sloknaas. (54:46) The historic origin of these mutual aid organisations is found in England's "friendly societies" or in Germany's "workmen's orders," even though somewhat similar patterns are found even in antiquity* Some of the beneficial asso ciations, like the Free African Society, later became in surance companies* When other mutual aid societies became departments of unions or continued Independently, "their principal functions became cash Indemnification of workers for wage loss during periods of temporary disability due to sickness or Injury." (54:46-47) 3X 32 Klem and McKiever atatad that tha first major Industrial medical oara prepayment program still in ex- istenoe— that of tha Southern Faeifio Railroad— was or ganised in 1868 in Sacramento, California (13:3), Elam indicated that as early as 1837 a paper appeared in the United States on the problems of Industrial mediolne, It was considered to be a prise essay and eras entitled, "On the Influence of Trades, Professions, and Occupations in the United States in the Production of Disease* " The re port was written for the Medical Society of the state of New York by Benjamin W, McCready, who later became on® of the founders of the Bellevue Hospital Medical College and of the New York Academy of Medicine (33:49), In 1882 the first sujor employee sponsored Mutual Benefit Association was the Northern Pacific Railroad Beneficial Association, This association developed a program of oomplete medical care and other benefits flnanoed by employer-employee payments, • • « Medical serv ices were provided thru (sic) group medical practice in the Northern Pacific Hospital in St, Paul, Minnesota, and thru arrangements with physlolans along the line, • • , In 1885 the Maey Mutual Aid Association was estab lished, which in 1886 appointed a part-time physician to adviae on sick benefit olalms and give service for minor ailments, (1:52) A number of authorities have reported that cash benefits whloh replaced part of the income lost during illness were the first health benefits provided. Then medical service programs followed closely thereafter. As Dickinson has put it, Insuranoe against loss of Income became a felt need at about the middle of the 19th century as factory and wage systems became dominant and the individual no longer had the oloseness to the soil which makes for a large degree of self sufficiency* (44:561) Qoldmann pointed out: Voluntary medical Insuranoe in the United States has grown from humble beginnings in a few communities to a social movement extending throughout the country* Although it dates back to the second half or the 19th century it did not enter the major phase of its development until the third decade of the 20th cen tury* (49:225) In 1905 the Massachusetts State Board of Health Issued a brief report on the conditions affecting the health and safety of employees in factories and other es tablishments in the state. This report was supplemented in 1907 by an extensive study made by Dr. William C. Hanson of the ”dusty trades*" The ninety photographs from this study, together with charts and a collection of data and other material, wore put on display in Boaton-^the first industrial hygiene exhibit in the country (33:53). In 1908 Congress enaoted a law granting to certain employees of the United States the right of compensation for injuries sustained in the course of employment; in 1916 Congress replaced this act with one ooverlng all fed eral civilian employees (33:54). In 1910 the Department of Labor issued a report on ‘ ’Phosphorus Poisoning in the Match Industry In the United 34 States" by John B, Andrews. This led to the first major public act to control occupational diseases In the United States— "the Imposition of the prohibitive federal tax or. yellow (white) phosphorus matches*" (33:55) It is inter esting to note that the early controls here did not in clude any medical social insurance for industrial workers in the federal Congress, but rather the use of the power to tax in actually abolishing the use of the poisonous phosphorus* In 1911 Illinois passed a law requiring monthly examinations of workers "in industrlaa using or possess ing lead, zinc, arsenic, brass, meroury, and phosphorus," but did not require the removal from danger of workers who showed symptoms of the resultant diseases (33:55). In 1915 the United States Commission of Industrial Relations Issued an eleven-volume report on its Investiga tions of industrial unrest and labor-management relations® This included a survey of the sickness prevalent among approximately a million workers In representative occupa tions (33:58). Health Insurance developments, iggff-isio — -----“---- Avnet divided the history of health and welfare into three periods. The first period covered the years 1850 to 1910® 35 The story of health Insurance In the United States is almost 100 years old, but early attempts In the field vere not successful* • . • The Indus trial Revolution introduced the need for protec tion against accidents or sickness • • • • • • During the last quarter of the 19th cen tury the two basic types of health insurance began to emerge* One, medioal protection came in the form of medical oare arrangements for industrial workers in Isolated areas chiefly in the railroad, lumber, and mining industries— where the economic conse quences of accidents and illness were secondary to the difficulty of reaching a doctor* The other type, disability benefits, was Introduced by commercial and nonprofit organizations to compensate for loss of earning by urban workers* (1:1) Except for the industrial plans just mentioned, this form of health Insurance dominated the field until the oarly thirties. Avnet indicated that in the light of current de velopments, early Industrial experience Is interesting chiefly for the precedents established: 1. The assumption by industry of responsibility for providing workers with medical care in areas having insufficient medical facilities, 2. The use of the procedure of prepayment as a method of financing part or all of the program, and 3. The use of payroll deduction as a means of collecting workers' share of prepayments. (1:1) Characteristic of the beginnings of a health pro gram, from 1850 to 1900, was one of experimentation for insurance Indemnities, Avnet believed, Beginning around 1890 policies indemnifying th© holder against loss of earning because of certain specified illnesses were successfully issued * . * 36 each policy vac sold separately to individuals— group insuranoe was not Invented until 1911, and was not applied to the health Insuranoe field un til muoh later. (1:3) Because of the lack of ability of the oonmercial insurance companies during this period to acquire the con fidence of industrial workers of middle and low Income groups, only limited insurance benefits by nonprofit asso ciations, fraternal societies, cooperatives, trade unions, or mutual benefit associations were available. However, as reported by several authorities, the impact of these nonprofit, mutual societies, and the like, was negligible on the health insurance field. During this period the only other group active in the health insuranoe field was the trade union. However, its few plans were strictly limited both as to scope and availability. Limited surgical benefits first appeared In insurance company individual policies in 1903, and medical benefits were first provided in 1910. • • « In group insuranoe surgical benefits were first Issued in 1928, but the intensive development did not begin until 1939. (4:45) Subsequent Development of Health and Welfare Programs Health Insuranoe developments, T5TCT553 --------- Avnet defines the second of three periods of de velopment as covering the years 1910 to 1930. This period 57 was characterised by the emergence of social Insuranoe as an important compulsory Insurance factor in the United States as well as the period claiming birth of group in suranoe in the life Insurance field. Beginning in 1911 workmen* s compensation laws were introduced in the important industrial states . • • some of the best industrially sponsored medi cal service plans now operating had their origin during this period. (1:6) This was a period of orlsls for determining the direction of insuranoe coverage. Would it be compulsory or voluntary? The compulsory type had a firmer foundation during this era, but its growth became definitely stunted during the early twenties. Avnet lists two exceptions (San Francisco Municipal Health Plan and Rhode Island Health Insurance Law of 1942) to the statement that work men* s compensation laws are the only form of compulsory health insurance in the United States. In 1924 following 18 to 20 deaths among the watch dial painters in New Jersey extensive studies into the health hasards of the radium watch dial industry were made including one by the U.S. Public Health Service, which outlined the methods of con trol. (33:60) In 1926 the first collective bargaining agreement containing a health and welfare clause was drawn up be tween the Public Service Corporation of Newbury, New York, and the Amalgamated Association of Street and Electric Railway Employees. This agreement provided for life In 38 surance and weekly sick benefits (33:61). This agreement is Important In that it establishes a bench mark from which the unions of the late thirties, forties, and fif ties have garnered broad and comprehensive health and wel fare programs. The year 1929 was significant in the health and welfare field, for it was during this year that a contract was made between 1,500 school teachers in Dallas, Texas, and the Baylor University Hospital. This agreement is generally regarded as the birth of the present Blue Cross plans. Avnet points out that the year 1929 was a signifi cant year because in addition to the birth of the Blue Cross program in that year: 1. The first consumers’ cooperative was formed for the specific purpose of providing a prepaid medical care through group practice. 2. The Ross-Loos Clinic, a physicians’ coopera tive, set up a group practice prepayment plan for a group of employed people and their dependents in Loo Angeles where the shortage of physicians was not a factor. (1:9) Health Insurance developments, IgSO-TggT ~ E--- The current period of health programs dating from the 1930’s could, Avnet believed, be divided into two phases: the period up to 1938, which was mainly of study and discussion, and the period from 1938 on, which she characterised as a period of Increasing action® 39 In 1933 the American Hospital Association endorsed the principle of group prepayment for hospital bills and established a list of essentials which should characterise such plans* In 1934 the Amerloan Col lege of Surgeons gave its approval to prepayment plans for medical and hospital service* In 1933 the important Committee of the Costs of Medical Care issued its final report based on a five-year study of all types of medical services; four of the twenty- eight reports dealt with the industrial prepayment medical care plans* (33:61) The reports of this committee have become standard references in the field of health insurance and were par tially responsible for the Increasing emphasis on medical care in the middle and late thirties* In 1935-36 the National Health Survey, the Presi dent' s Interdepartmental Committee to coordinate Health and Welfare Activities (1935-38), added to the focus on medical care. (1:12) In the thirties there were other forces at work that contributed greatly to the development of the health Insurance programs. The "passage of the National Labor Relations Act (Wagner Act) In 1935 provided labor with statutory authority to bargain collectively on the basis of wages, hours, and working conditions." (76:7) In 1939, which Avnet speaks of as the period of Increasing activity in the health program field, the Cali fornia PhysioIans Service received recognition as the first state-wide plan to be offered by a state medical society. Interestingly enough Avnet believed this was done by the medical profession to ward off a threat of compulsory health Insurance In the state of California. Brumm indicates that the first collective bargain 40 ing Agreement to provide for non-oocupatlonal eioknese and accident benefits was negotiated as early as 1926, but the new trend did not emerge elearly before World War II (57). The presence of a world war is felt in almost every area of development and the health and welfare field was to be no exception. Brumm believes that most health and insurance plans negotiated during World War IX were the result of efforts to discover benefits in lieu of wages, which the War Labor Board would approve and which would have an obvious value for workers in dollars and cents as well as Improved morale (37:5). In 1955 Klem, who throughout the health plan 11t- erature has made a substantial contribution in the health and welfare Insurance field, made a study in California of medical care and costs to families In relation to their economic status (11). This study presented an analysis of the incidence of Illness, the extent and volume of medical care, and the costs of medical care in relation to family economic status In California in 1934. The findings, drawn from three distinct bases of analysis (Income level, employment status, and change in economic level subsequent to the onset of the depression) revealed that there was a close relationship between low economic status and high illness rates, lack of sufficient medical care, and in ability to meet medical costs® Klem concluded that th® 41 eosts of nodical service in cases of serious or prolonged illness are beyond the financial capacity of most low in come and wage earning families (11:1)* Of the 6*096 fami lies Interviewed during this survey* 666 reported that they subscribed to some type of annual fee plan for medi cal services. These families oonslsted of 2*067 persons* of whom 57 per cent* or 1*179 individuals* representing 6.4 per cent of the total population surveyed* were en titled to medical oare under annual-fee arrangements. . . . Nearly half of these individuals were eligible for medical benefits through lodges and sooietlesj one-third were members of associations providing hospital and clinical oare; and one-fourth of them were included in medlcal-care arrangements between employers and employees. (11:38) Mosby indicated that the growth and development of insurance against hospital expense was greatly stimu lated by the inception of Blue Cross during the thirties* and to some extent by the limited protection provided by Insurance companies for more than a decade. During this era health Insurance emphasis was placed generally on in surance against the cost of hospitalization. This may have resulted from a general realization that many persons eligible for health insurance plans eould somehow afford the routine medical and dental expenses much more easily than they could the greater cost of hospital care (55). Klem indicated that group insurance against surgi cal expenses was started in 1938* and group medical ex- 42 pense Insurance was first offered in 1943 (35:62). With the freezing of wages in 1943 as a result of the Stabilization Aot of 1942 and supplemental legisla tion, many employers established employee benefit plans in the area of health and welfare as an inducement to keeping their labor forces intact. An American Dental publication pointed out that Hlt was true, too, that the Bureau of In ternal Revenue ruled specifically that employers oould charge the cost of providing employees' group hospital and medical insurance to business expenses." (76x7) 3>uring the World War II years (1942), Goldmann noted, "Rhode Island enacted the first State law providing cash sickness benefits to workers for non-occupatlonal illnesses and Injury covered by its unemployment insurance law." (38:64) California was the second state to enact a law (1946) for "cash sickness benefits for non-occupa- tional illness and Injury to workers covered by the Stat© unemployment insurance law." (33:65) In 1947 by an amendment to the National Labor Re lations Act, known as the Taft-Hartley Act, there was es tablished the mechanism under which health and welfare aotlvities could be carried on and the act delineated the responsibilities of labor and management in the operation of such programs (76). In the area of negotiated contracts the ruling of the National Labor Relations Board in 1948 45 holding that the employer Is required to bargain with the representatives of the majority of employees concerning group health and accident insurance gave considerable em phasis to the rapid expansion of health Insurance coverage* Just a year later* In 1949* the Steel Industry Board of the United States government ruled that In steel the right to bargain for health and welfare plana was similar to the right established by the National Labor Relations Board in 1948 (76)* Welnermann indicated that by far the most promi nent of recent industrial "welfare" negotiations was "the provision of some form of prepaid medical care for non- occupational illness*" (70:704) Although forward-looking employers and unions have developed various types of medloal oare pro grams since the turn of the oentury* the establishment of such plans through collective bargaining is a rel atively new phenomenon* • • • The movement had its major Impetus sinoe World War II following the war time "wage freeze" and the 1945 ruling of the War Labor Board in support of employee-beneflt provisions in collective bargaining* Spurred on by the lack of health and disability Insurance and the inadequacy of retirement and survivor* s benefits under the Social Seourlty Act* increasing number of unions have been led to negotiate for their own "welfare" benefits* (701704-706) In 1951-52, one powerful influence was the nation al Wage Stabilization Program established during the Korean Emergency* "Restrictions on wages and salary increases X@d employers and unions to substitute a number of fringe benefits including health plans." (83:11) Balsden and Hutchinson pointed out that from the standpoint of the employee* if an Increase in his compensation took the form of higher wages* part of the increase would go to the gov ernment in taxes. On the other hand* Increases in compen sation in the form of health and welfare benefits were not subject to taxation. Prom the standpoint of the employer, the cost of supplying medical benefits could be deducted as a business expense in computing federal tax earnings. "Since the excess profits tax was in effect during wartime, only a small portion of the cost of such benefits came out of company profits." (83:11-12) During wartime, especial ly* there was an attitude that "sickness and disability not only cut down on workers' earnings but also reduced the national output." Actually, "the full extent of the loss is incalculable, since absenteeism represents only a portion of it • • • 111 health, like an iceberg to which It has been compared* goes far beneath the surface and only the visible portion can be measured." (15:8) To this point the discussion has centered around the early development of health expense Insurance and its progress through the forties and Into the early fifties. A later section considers the more recent trends of the early, middle, and late fifties. 45 Types of Health Insurance Plana Background Information A surrey conducted by the New York State Department of Labor In December 1958 showed that nearly 63 per oent (about three million of the four and three-fourths million New York State employees) had one or more health benefits paid for by the employer (106:3)* In reviewing the literature It Is difficult to trace the development, or area of interests without dis cussing the types of plans that characterize the health and welfare area* It is the intention of this study to concern itself only with the group type of plans* Recognising that there are individual policies that are issued to those desiring financial protection from poor healths such plana consti tute such a variety of coverage and depend so intently on the particular Individual that no attempt shall be made to analyze them in this review of the literature. However, it is pointed out that reference is made only to individual policies related to individual coverage and not to individ ual subscribers Involved in group plans. Types of health Insurance programs have been clas sified in many ways and on many different bases. Some speak of such plans as being contributory or non- 46 contributory as a major classification (86:2)• Davis in dicated that she believes there are three formal non- contributory types of plans# namely# those financed and managed by the employer# joint employer-employee flnanoed and managed plans# and Insurance plane Issued and adminis tered by an insurance company (89:9)• Still other writers in the health insurance field indicated that health Insurance# compulsory or voluntary# may assume any of three forms: (1) It may take the form of cash benefits to compensate the insured for loss of earn ings while indisposed? (2) It may Indemnify the Insured In cash payment for medical expenses Incurred; this Is called ’ ’ medical expense indemnities” or "medical reimbursement” insurance; or (3) It may dispense with cash benefits and provide the insured with medical services (lslntroduction)• This form is usually referred to as a "prepaid medical cares of medical service insurance* ” Miller summarised his discussion of this type of Insurance by saying, "Group insurance accounts for the major portion of the health insurance benefits in force with Insurance companies*” (58) These benefits are pro vided by means of a master contract issued usually to an employer but sometimes to a labor union or a trustee of a welfare benefit fund established through collective bar gaining* Benefits of various types are provided under 48 Avnet declared that regardless of the type of group insurance chosen such Insurance has become "the greatest single factor In the growth of voluntary health plans*" Group Insurance minimises the bad risks that individual policies invite. Group Insurance also "invites the employ er to share in or assume the entire expense of premiums." (1*8) Disability income and accidental death and dismem berment Insurance were the first covers issued* followed in turn by hospital* surgical* medical* and major medical, according to Dickerson (4:269). According to Goldmann* medical care insurance Is distinguished by several charac teristics. It is a modern form of social action substituting solidarity for individual effort and oertainly for uncertainty . . . It is organized self-help to re move or reduce the financial burden which may arise from sickness* Injury* or maternity. (5:8) In any event* the general types of coverage avail able Include life insurance* accidental death and dismem berment, weekly accident and sickness insurance (in lieu of or a supplement to compulsory workmen1a compensation insuranoe)* hospital care* maternity care* surgical care* obstetrical care* group medical* major medical* in-hospital medical and home and office medical expense (96:4). For the purpose of this study of the related lit erature the discussions of the types of plans will be 47 these contract# for employees or the members of a union and for their spouses and dependent children* Group hospital benefits generally consist of two parts • « • the first is an allowanoe for the cost of the hospital, room and board; and the seo- ond is the additional provision for other hospital charges such as the use of the operating room, for X-ray examinations and laboratory tests and the like* Group surgieal expense Insurance is provided by a means of a schedule of maximum benefit, a set ting forth of different amounts of reimbursement dependent upon the type of operation* (58:1125-26) Still other writers have drawn a line of demarca tion between Indemnity and service types* They have indi catod that "an Indemnity plan provides benefits in the fora of cash allowances to the insured persons for a stated premium for death, accident and sickness, disabil ity and the like," These benefits are sold by the insur ance companies on the standard concept of pooling group resources for protection against the future risks of the individual members of the group® Such a service plan pro vides actual services (not cash) of doctors and hospitals to Insured persons "for a stated premium for specific kinds of hospital, surgical, and medical care*" (92:3-4) Regardless of the avenue of approach used in describing the plan, Dickerson believed, We can safely say that group insurance policies are, in effect, three party oontraots for the bene fit of the employee • • • They involve lower costs of administration, and generally cover non-ocoupa- tional injuries only* (4:266) 49 divided Into four areas: (1) nonprofit hospital and phy sicians programs, (2) indemnity type coverage, generally through Insurance companies, (3) group practices both re stricted and unrestricted, lnoluding the open and closed panel, self-contained unit, health preventive type, foun dation type, and similar service plans, and (4) commercial individual policies* It should be recognized at the outsat that in many cases it is practically impossible to categorize the plan and that in others the plan may contain elements of more than one category. For example, many plans accepted as service-type plans have Indemnity-type features* Others are the reverse, being generally referred to as indemnity types and yet having some very noticeable service features* Group practice plans may be given a category of their own, even though they are basically of a service type. They are categorized separately here because of their broad and rather definitive pattern as individual groups* Nonprofit hospital and physicians ooverage Any discussion of nonprofit hospital and physi cians health insurance programs must include some mention of the Blue Cross and Blue Shield movements* These two types of programs have attained positions of prominence in the field of health insurance* Blue Cross for hospital care both assures the patient of 50 the means to pay hospital oare and provides the hospital with a relatively sure and stable source of inoome • • • Blue Shield plans for surgical and medloal ears aot as independent Insuring agencies under the sponsorship of local or state medical societies. (44:562) Heed indicated that, from the standpoint of the number of participants, "the leading type of existing pre payment or Insurance plans is the Blue Cross Hospital Service Plan." (19:1) The distinguishing features of these plans are that they are nonprofit, that the subscriber has free choice among the hospitals of the area, that they are sponsored or endorsed by the hospitals of the area, that they operate through contracts with the member hospitals which in return for specific pay ments agree to provide specific services to sub scribers; and finally that the plans meet the stand ard of and are approved by the American Hospital Association. (19:1-2) In 1936 a grant was given to the American Hospital Association to establish a Commission of Hospital Service (87:9). This commission was to serve as a source of in formation and advice for hospitals wishing to Initiate plans. In 1946 the Commission of Hospital Services was renamed the Blue Cross Commission and Is now supported entirely by the various Blue Cross plans themselves. The hospital Insurance of which Blue Cross is the prime ex ample covers generally room and board and ancillary ex penses and is the most popular plan of Insurance In the United States, according to Dickerson. By 1957, almost 121,500,000 persons were covered by this type of Insurance 51 (4:111). Blue Cross plans are designed to make hospitaliza tion more easily available by "substituting group payment for individual obligations." Such plans are comunlty- sponsored nonprofit corporations organized to furnish specified types and amounts of hospital service to persons making regular and equal prepayments. Their operation is based on contracts with both subscribers and hospitals. Blue Cross plans offer a "guarantee of service," which, in principle, offers service (Blue Cross making payments directly to the hospitals rather than to the subscriber) rather than a cash indemnity (5:93-94). Since 1933, the American Hospital Association has played an important role in the development of Blue Cross plans. It has provided the movement, guided it into proper channels, formulated standards for nonprof it hospital service plans, Introduced the approved system, and emphasized the establishment of satis factory working relations between hospitals and Blue Cross administrations and between medical serv ice and hospital service plans. (5:97) Of the eighty-five Blue Cross plans now in operation throughout the United States, all but seven plans limit coverage to hospital expenses only (4:122). Since 1946 the responsibilities for the various tasks involved and particularly for the coordination of all plans providing administrative council . . . rests with the Blue Cross Commission, the successor of the Hospital Service Plan Commission, which in 1941 had been established within the (American Hos pital) Association. (5:98) 52 Permission to use the term "Blue Cross plan" is given by the Board of Trustees of the American Hospital Association to nonprofit hospital service plans whloh meet the standards of the American Hospital Association (5:106), Recently many of the Blue Cross plans have added medical coverage* surgical coverage* and diagnostic services on a limited basis outside of the hospital to the major medical Blue Cross plan. Health Service* Incorporated is a corporation created by the Blue Cross Commission to provide services needed by members of a national group where underwriting by local or regional plans is not practicable. With some eighty-five Blue Cross plans throughout the country, there are necessarily some variations in the type of coverage and the limits provided. These differences have at times made it hard to "sell1 1 the coverage to national employers who desire their employees to have a uniform coverage* regardless of the branch or plant to which they are as signed in the United States. Transfer of personnel within the same company or to another branch in another region of the United States should* many national employers hold* carry the same benefits of insurance. This was the prin ciple upon which Health Services, Incorporated was founded. One of the needs that soon became evident to the Council (Council on Medioal Service and Public Relations of the American Medioal Association) was 53 for a national coordinating aganey similar to the Blue Cross Commission to assist the (A.M.A.) plans In developing sound underwriting* uniform statisti cal data* and adequate selling programs • • • For this purpose Assooiated Medioal Care Plans was creat- ed in 1945 and lndorporated as a trade association* This organisation had adapted the Blue Shield as its symbol and has as its members some 60 of the 100 medioal society plans. 152:879} County medical societies first sponsored plans In Washington and Oregon In the late 1920's« but the Blue Shield movement may be said to date from the establishment In 1959 of the California Physicians Service on a state wide basis (4:145)* Starting a year or so later, other states developed similar plans* The Blue Shield Medical Care Plans* Incorporated operates as a service and accred iting agency and authorises the use of the Blue Shield designation by approved plans* As in the case of the Blue Cross* the plans are generally tax exempt and nonprofit. The medical profession in almost every case controls the local Blue Shield Plan through local or state-wide medioal societies with a majority of physicians on the board of directors. Medical benefits are distinguished from surgical and major medical benefits and usually cover ln-hospltal medical, total disability medical (for employed persons), and non-disability medical (hospital* home, and office treatments), usually deductible (4:145). Insurance of this type often includes a blanket accident rider and is 54 characterized by physician-sponsored, service type bene fits (also some indemnity) nonprofit operation, community rating, and first dollar coverage. Goldmann described the Blue Shield type of plan nonprofit prepayment plans for physician1s serv ice which utilize the system of the individual prac tice of medicine, provide subscribers with specific types of services by those duly licensed and regis tered physlolans who are participating in the pro gram • • • The persons covered by the plana are free to ohoose any of the members of the medical profes sion whose names appear on the roster • • • The physicians receive dlreot payment from the adminis trative agency for such services as are covered by the prepayment plan, at fixed rates by agreement be tween the two parties • • • Combination of services and indemnity benefits is offered by some plans and the oholoe between the two types of contracts by others* (5tll4) As to the newness of this type of coverage on a large scale Goldmann pointed out that nearly all the medi cal society plans in operation in 1947 were organized aft er 1938, the majority being state-wide rather than local® It is not always clearly understood that although Blue Shield and Blue Cross had different places of birth and subsequent care occurred under two separate mother or ganizations in some cases the services of both are com bined to form a Blue Cross-Blue Shield type of plan® Some states will allow no indemnity payment but only a service type plan® In some states a certain percentage of the physicians must belong to the plan before it can be 55 started. Goldmann remarked: Generally nonprofit physicians plans are not per- mitted to include hospitalisation. They usually have an income limitation, and must comprise a group. The rule of free choice and fee-for-service is generally the aecepted procedure for such plans. (5:114) Blue Shield has formed a nation-wide stock com pany called Medical Indemnity of America, Incorporated and offers services very similar to the Health Service, Incorporated organization operated by Blue Cross (4:162). Indemnity coverage The second type of plan, that of indemnity cover age, is offered generally through insurance companies and contains the supplementary major medical type and the so- called "comprehensive, first dollar, coverage." Since the supplementary major medical policy is more limited in scope than the comprehensive coverage, the supplementary major medical Is her© mentioned first. "Major medical ox® pense insurance la the newest, most highly publicized and fastest growing branch of health insurance In the United States today." (61:332) "Since 1949 when the first policy took effect, major medical coverage has spread to over seven million people." (63:13) Pollack reported that the first real major medi cal or comprehensive type of plan was established by the Eflun Society as an association of men In the management 56 field of General Electric Corporation. Insurance people predicted a dismal failure for this type of coverage. Major medical, as the name implies, assumes that the sub scriber will assume minor expenses of health oare and will rely on the major medical ooverage for a greater share of large health expenditures. According to Pollack, the requirements derive from three fundamental premises on which the insurance is based: (1) If minor expenditures are not insured, more can be spent for protection against major illness. (2) Wherever possible small claims should not be Insured, because their handling is too ex pensive for the benefits derived. (3) If the Insured is to be made to share directly in the cost of the services he receives, he will be motivated to purchase more economically and will be less likely to request unneeded or overly luxurious services, than if they were available to him without direct cost. (61:322) Major medical insurance represents contracts that protect against almost all types of medical car© expend!™ tures with few if any Internal limits and with a high over-all limit, usually at least $5,000. "Generally such policies include deductible and/or percentage participa tion. N (4:168) Pollaok stated that deductibles that re quire the insured to pay for the initial portion of the loss are standard in automobile collision, fire, and glass Insurance (61:323). Deductible provisions serve two purposes: (1) they 57 lover premium costs by insuring only substantial claims, eliminating the small claims and the expense of handling them; (2) deductible also helps to eliminate duplicating other health Insurance policies and the Insurer beoomes a partner by bearing the first part of the loss (4:175). Co-insurance provisions wherein the subscriber bears a percentage of the expenses is to encourage the in surer to keep losses within a reasonable limit. Both the co-insurance feature and the deductible are efforts to control the expenditures by a partnership* Perhaps the most impressive feature of major medi oal insurance is the broad range of covered services. Compared with other type plans the exclusions are few and usually excluded under most all other typea of plana as a matter of routine. Although there is a great variation in specific provisions, it is possible to outline the general features of typical plans. Most often insuranoe has been written to supplement existing coverage . . . Generally the insured is required to pay a "corridor” deductible for covered expenses before the major medical benefits begin. (61:324) As Dickerson says, "in group insurance a corridor deductible is often used to coordinate the plan with a basic service plan, covering the same group." (4:175) Thus the major medical will operate when all benefits have been used on the basic service plan generally after a corridor deductible has been satisfied. "On intensive 58 examination major medical policies reflect a series of compromises between the demand for broad coverage and the quest for reduced costs." (61:325) It is interesting to note that for the most part, practically every company has had reasonable success with the superimposed major medical (51:31). The comprehensive health Insurance contracts are very similar to supplementary major medioal except for the fact that they provide lower deductible or, in some cases, no deductible at all and sometime omit or limit the per centage participation feature. Some describe the comprehensive first dollar coverage as extending the major medical insurance toward the first dollar coverage and eliminating the underlying coverage (basic service plan). In some cases, as Indi cated above, no deductible or co-insurance will be applied to certain features of the plan so that It eliminates co insurance or deductible on the first dollar specified sum. Many various combinations can be put together depending on the desires of the subscribing group using this type of plan. Comprehensive Insurance Is generally quite broad in coverage in that all doctors’ visits are covered ex cluding reimbursement for periodic health check-ups, well- baby care, Immunization and the like. 59 Group practice coverage The third type of plan, that of group practices, has been described by Yahraes as a group practice of medicine including the provision of preventive, diagnostic, and ourative medioal serv ices by family physicians, specialists, and other professional, technical staffs working as a team in a medical center, pooling their knowledge, experience, and equipment as well as their income* (112:3) In a number of ways this type of program has been labeled the health team concept* Davis has expressed the concept of the group practice plan as follows: "In the slow development of voluntary health Insurance in America, there has gradually appeared another avenue of attack upon the risks of insur ance— the medical approach.1 * (3:147) Davis described the plan as the provision of medical care on a prepayment basis, either in association with cash compensation against wage loss or without any such connection * . * In the bituminous coal mining, the working conditions are such that large numbers of miners and their families would be without medical care for aocident or illness if no organizational provisions were made by or with the cooperation of industry • • • In Amerioan lumbering, the cut-and-strip policy followed until recently, required lumber oamps with a large number of workmen In an area commonly Isolated from any medioal facilities • • • Greater emphasis was given to the medical approach by the absence of hos pital facilities in many of the areas with which these industries were concerned • • • Sometimes as suggested, the Industries built hospitals directly; sometimes, hospitals developed as proprietary es tablishments of physicians, most of whom would never 60 hare entered the area, much less established a hos pital, without a eontraet with the industry or an aasoolation of employees, through whleh they were assured patients and payments. (3x147-48) The forerunner of the Kaiser Permanents Health Plan was bora in just suoh a way in the great Northwest when that firm was involved in the construction of the Grand Coulee Dam. Goldmann indicated that such groups could be cre ated in any of three fashions: (1) those within Industry, (2) those by cooperatives outside industry, and (3) those initiated through groups of physicians such as Ross-Looa (5:148). Pour different types of administration of group practice plans have been identified: (1) physician con trolled, (2) company administered, (3) consumer coopera tive controlled, and (4) associations directed by all groups in the community (5:150). Perhaps It is interest ing to point out that in only the last two does the sub scriber have a voice in the administration. The group practice type of health program Includes preventive as well as curative services and usually is centered in a olinio owned by the association or society or in some oases a clinic is rented. As in the case with the Kaiser plan the hospital is also owned by the group, but if a hospital is not under the group ownership then usually a nonprofit or indemnity insurance plan is carried to provide 61 the hospital benefits. The health groups are generally nonprofit organi sations Incorporated under state regulation and may make agreements with duly lloensed physicians to furnish serv ice to the members of the groups, "In such a ease, the physiolans are in the position legally known as an 1 inde pendent contractor,'" (5:150) One of the best known plans now operating in the United States, in addition to the Kaiser Permanents and Roaa-Looa already mentioned, is the Health Insurance Plan of Greater New York, This plan, H.I«P« as it Is usually- referred to, is part of a state-wide plan in New York, It offers one set of benefits with the choice of two options. The basic plan Is state-wide and consists of hospital coverage by Blue Cross, surgery and medioal by Blue Shield with Metropolitan Life's Major Medical Policy superimposed on th® Blue Cross-Blue Shield combination. The H.I.F. plan has the same hospital coverage as the state-wide plan, but in place of the Blue Shield and major medioal, a group practice plan is made available in and around the city of New York, The second option is called Group Health Insur ance Incorporated (G.H.I.) and offers the same hospital plan as the state-wide plan; however, a nonprofit medical service corporation is substituted for the medical, surgi cal and major medical and is considered & type of open 62 panel plan where a subscriber may choose any physician on the approved service corporation list. The New York state-wide plan is available to school districts and will be referred to subsequently under a section on school dis tricts* The Seaman's Bank for Savings of New York group health program described by Ewing and Clarke started in 1941 and placed considerable emphasis on diagnostic care and health maintenance (40). The feeling in this group approach was again that the pooling of many specialists and general practitioners gave the "whole individual" ap proach that is famous throughout the country, as practiced at the Mayo Clinic, Rochester, Minnesota. Hag and Mayo described the cooperative type of ap proach in North Carolina in which a community made it its project to establish a group health program (50). Another approach to the group practice typo of plan has been formed by the San Joaquin Foundation for Medical Care. Incorporated in 1954 It was the first group so written by the Continental Casualty Company. Dr. Har rington has indicated that the group from its inception was dealing with a rural group of subscribers with low In comes. Three sohedules of charges were set up, two to be used by subscribers with inoomes below $4,500 a year. The insurance company paid for the office and administration 63 under the direction of the foundation personnel* Each claim, before payment ia made, ia reviewed by the founda tion* a medioal ataff, without oharge, to evaluate the aotivity of ita member doctors* The office personnel hired by the foundation has the power to pay Insurance claims by authorization of the Insurance company. Some 35,000 people are in the foundation program which numbers among its largest problems time, orientation, and communi cation* There are some forty-five programs operating with the foundation; some are group and some are individ ual* The California Medical Association* s Relative Value Study (schedule) has been used as a basis of payment, and Dr. Harrington has said, he hopes that the foundation is a catalyst setting up standard of membership and quality control by which the medioal profession operates* The physicians are paid through the foundation office and the Insurance company pays the foundation office in the case of eaoh program* Payment is based on a fee-for-service plan and covers personnel only In the area. Outside the area, indemnity type of coverage can be obtained (10). Soon after the San Joaquin Medical Group was under way, another foundation was formed in the Fresno, California, basin* The Fresno Foundation for Medical Care is an in corporated body under sponsorship of the Fresno County Medical Society* The specific and primary purposes for 64 which this corporation is formed are to promote, develop, and encourage the distribution of medical services by its members to the people of Fresno and adjacent oounties at the cost reasonable to both patient and physician. As in the San Joaquin plan, there is more than one fee schedule used based on the California Medical Association's Rela tive Value Study, There is a county-wide audit committee established for both in-patient and out-patient medical care to insure quality control. Many types of prepayment plans are meeting the foundation's standards and are han dled by the foundation. Blue Cross, Blue Shield and in demnity plans by commercial companies are all Included. The foundation is administered by a board of directors, membership on which requires nomination and election from the general membership of the organization. All members must belong to the medical society and must re-apply for membership each year® A two-thirds vote of the membership is necessary to become or remain a member of the founda tion (95). Individual commercial policy coverage The fourth type of plan is one issued by the com mercial Insurance company strictly on an individual basis. These plans do not meet the needs of the average man. In the words of Kulp, ”such policies are too technical, cost 65 too much, and are not dependable," (6:591) Under this type of policy is often found the guaranteed renewable policy or non-canoelable policy. These polloles are health insurance contracts which give the insured the un qualified right to continue the policy in force until at least age sixty by the payment of premiums agreed upon in advance (4:219), Federal Legislation Affecting Health — — — — i — ^ i i — — mmrnrnrn^ — — — — — — — — — — — — — mmmrnmtmmmm Insurance Plans A brief review is made at this point of federal legislation which recently (July, 1960) culminated In the Federal Voluntary Health Program for Federal Employees. Innumberable ideas about methods of flnanoing medical care for the American people have been advanced in the last twenty or more years (26:vlii), Proposals have been designed to encourage the growth of voluntary health insurance without requiring any permanent form of federal subsidy or tax. These include "legislative au thorization to permit insurance carriers to pool premiums to reinsure substandard health risks and experimental of ferings of benefits," (26:1) Also included was a federal reinsurance corporation under which health insurance carriers could partially Indemnify Insurance companies who had to take extraordinary losses, eaoh insurance com pany contributing a sum and the federal government making 66 a contribution. Other legislation designed to finance medical care Included measures prohibiting the issuance of health insurance policies which could be cancelled after a stated period for any reason other than non-payment of premiums for those Insurance companies engaged in inter state business. Brewster indicated that there were pro posals for federal participation in financing the construc tion costs of private medical clinics and health centers with prepaid membership (26). Other proposals were for federal financing of the administrative costs with sums varying from a minimum of five million dollars upwards for grants, or the launohing of a long-term loan program. The mortgage guarantee proposals concerned themselves with federal or federal-state subsidised health services admin istered through private health insurance carriers. Under this section of study was a voluntary nation wide prepayment program for the entire population with fed eral subsidy where needed. This could be done directly or through existing state plans. Other legislation under this area of proposals lnoluded voluntary health insurance for persons unable to pay part or all of the usual premium. Variations included federally paid care for the medloally indigent, groups dependent on public aid, aged and perma nently disabled; unemployment grants to finance demonstra tions on a small seal©; and local experiments concerning 67 hard-to-reach or high-risk groups. Another section of proposals studied included ex emptions on credits on federal Income taxes for amounts paid out as health insurance premiums. This would be a total allowance not included under the medical expenses action of the income tax with its restricting limitations. Proposals for federal grants to state-operated programs, which would finance personal health services by utilizing health insurance, cover a wide area of legislation. In cluded in these are proposals to give federal support to a state-operated medically indigent program, grants to states to subsidize the operation of public facilities for the chronioally ill at the state level and to subsidize certain high-cost drugs and medical services. Proposals for systems of national health insurance on a wholly or partially voluntary basis included legis lation for persona with Incomes under #5,000; such legis lation making national health lnsuranoe compulsory for lower income group workers and voluntary for others. There were proposals for a national system for prepaid health services for special population groups through an additional social security tax. One of the first proposals in this area was for hospital benefits; another proposal was for employer“employee to contribute an amount to a federal fund until the age sixty-five. At 68 that time the fund would pay for health insurance for the retired (or over age sixty-five) employee for the remain der of his or her life* Under the social security program was also a proposal to pay for health Insurance for the unemployed* Proposals for compulsory health Insurance have found their way also into the legislative annals* Prom 1943 to 1957 there was a number of bills introduced to tax earnings of insured persons to provide a compulsory de ductible coverage. Old age survivor and disability con tributions for compulsory hospitalization were embodied In a number of bills as well as federal grants for state- operated care programs* In 1935 the federal government through the Farm Securities Administration set up a plan whereby the farm ers could pool their funds and put them in charge of a trustee* The trustees then paid the physicians’ bills fox’ the group as the funds allowed* on a monthly pro-rata basis* As Williams stated* the agreements with the county (medical) societies recognise the three basic principles of the medical program: 1* The participation need for borrower families is based on their ability to pay as determined by their farm plans* 2* There is a free choice of physicians who agree to participate* 69 3* Funds Are set aside in the hands of a bonded trustee at the beginning of the operating period. (71:729) This program indicates that In specialized areas the fed eral government has participated In the health Insurance field for some little time. Proposals for voluntary health Insurance for fed eral employees and their dependents have been an area that culminated In July, 1960 with a choice of some thirty-six plans and fifty-six options, depending on the area of residence for a number of reasons. It would be difficult to ignore the federal plan, effective July 1, 1960, first, because It is a summation of a number of years of legislation to accomplish that end; and second, because of the tremendous impact the legislation can have on all other types of health insurance coverage. Item after item that commercial insurance companies and nonprofit plans would not, or indicated they could not, writ© at a fee comparable with existing plans are now contained in the federal program. The current federal plan requires no physical ex amination to Join and each employee has a choice of at least the government-wide indemnity or service plan plus a host of plans in certain regions depending on the area of residence. Plans other than the government-wide indem nity or service plan include employee organization plans, 70 group practice prepayment plans, and individual practice prepayment plana that have been approved by the United States Civil Service Commission. Many plans have a high or low option and the federal government contributes about 40 to 50 per cent of the cost of the chosen plan lnoludlng coverage for dependents in most cases. The plans chosen can be continued after retirement when specific require ment as an active employee have been met. Even when the retiree has died, the family can continue the chosen plan if it is a recipient of the retirement annuity. An eval uation of the federal plan by Wendall Milliman, an actuary with a large actuarial firm, has been made for the United States government. His views are included in the follow ing comments. There is a wide choice of plans that may weight the selection toward the broader coverages especially with those expecting a high current expense In medical care® Retired members will increase the over-all cost of the in surance, perhaps much more than has been allowed for in the initial computations. Costs are computed as uniform regardless of the geographic area, wherein medical costs are actually considerably different depending on the re gion of the United States. This will mean that the sav ings to the employee will not be uniform when considering some local plans. The computations have initially been divided into three contract periods. The first consists of the first sixteen months of the program's existence; the second, the following twelve months; and the third, a following twelve months. Thus, rates will not be ade quate by the time the third contract period (twenty-nine months) commences, according to Milliman (24). This will be so as broad coverage costa are estimated to rise from 5 to 10 per cent a year. Actually, the rates may fall short of expenses in the second contract period after the initial sixteen months. Milliman anticipated increased costs in hospital expense greater than the increased costa of living. The Increase can be Illustrated by the fact that during the ten-year period from 1948-1958 the ratio of hospital personnel to patients in voluntary short-term general hospitals increased nearly 30 per cent and the payroll cost, per patient, in creased over 130 per cent. (24:6) Milliman also anticipates an increase in utilisa tion as the trend for the past ten years haa shown a marked steady climb (24). Baker and Dahl have summed up the attitude of the unions during the current period in lending impetus to the federal program by saying, The unions seeking sickness insurance of broader Social Security clauses in their current collective bargaining are also those supporting the efforts to secure health Insurance through federal or state legislation. Both the AP of L and th© CIO 72 have repeatedly urged the passage of such federal legislation* (56x80) As of December 3» 1960 the following report was made on the newly-instituted Federal Health Plan for fed eral employees: Almost If750,000 Federal employees, or more than 85 per cent of those eligible, joined a Flan* Geo- graphio looatlon, world-wide, has little apparent influence on an employee's deoislon to participate* An additional 5 per oent of eligible employees are oovered under the enrollment of a spouse or parent who is also a Federal employee* Nearly 7 per oent of eligible employees did not enroll because they are covered under those other plans— such as a plan sponsored by the employer of the spouse* Three- fourths of all enrollments were for self and family*, covering 5,400,000 dependents* Most married em ployees— 95 per cent of the men and 60 per cent of the women— elected family coverage* More than 93 per oent of eligible employees now have some form of health benefits protection* Enrollment statistics for 36 plans with 56 op tions demonstrate that federal employees exercised fully the freedom of choice Intended by the federal employees' health benefits act* Of all enqployees who enrolled, 1,403,000 or 81 per cent chose one of the two Govemmentwide plans available to all employees* Two hundred thirty thousand or 13 per cent selected one of the employee organization plans available only to organisation members* Ninety-nine thousand or 6 per oent joined an individual or group praotioe prepayment plan available only In limited geographic areas of eleven states. Large and small carriers participate in the program with enrollment of Federal employees in the various plans ranging from a high of 938,000 to a low of 35* Federal employees prefer broad coverage to mini mum protection at low cost— four out of five selected high option benefits* With cost related to benefits in each case, plans available under the program ranged from f4*87 to $19*00 in monthly cost to the employee only and for family coverage* Salary level had little influence on selection of an option- three out of four employees earning less than $4,000 73 a year chose a high option* Fewer than 19,000 em- ploy*#* **l*ct*d th* *lght plan* which offered th* low*»t out-of-pooket cost, with oommensurately less- •r b*n*flt* and a roduced Government contribution* Da spit* a lower Government contribution in thair be half, four out of fir# of tha 75,000 woman employee* who elected to cower their non-depandent huaband* chose a high option* (109) Social Insurance, or Compulsory Insurance Although social insurance i* concerned with com pulsory type of insurance coverage as opposed to tha major voluntary trend that the health insurance program has taken in the United States, perhaps it would b® of inter est to point out that the compulsory insurance program has had a bearing on tha voluntary health insurance program development and has been complementary in coverage in some areas and a duplication of voluntary coverage in other areas* A m indicated previously, the federal government has given serious study to a compulsory social insurance program in several instances (9)* Smith's study of the social insurance field indi cates that the purpose of temporary disability insurance is to reimburse for loss of working time while the individ ual is disabled by accident or sickness* A weekly benefit is provided usually starting after a short waiting period of disability up to a specified maxi mum duration* There is also available as a supple ment to temporary disability insurance a form of accident coverage known as accidental death and dis memberment Insurance « « • (67:12) 74 In addition to the temporary disability there is also coverage for permanent disability in many of the social insurance laws known as Workmen* s Compensation Insuranoe. Klein and McKiever point out that "since 1910 all States, Alaska, Hawaii, and Puerto Rico have some form of Workmen's Compensation Insurance," (15:20) Klem indi cates that the enactment of the state's workmen* s compen sation laws directly Influenced the voluntary health in surance development. One of the first of these laws was passed in the state of Washington in 1911; it required that the employer compensate the worker for loss of earn ings but did not make it compulsory for him to provide medical care. The Medical Aid Act passed in that state in 1917 required the employer and employee to contribute equal amounts to defray the cost of medical care for in dustrial accidents and injuries (12:1). In California the workmen* s compensation insurance is coordinated with the unemployment Insurance. Califor nia allows private employers to set up their own compen sation insurance in lieu of the state program as long as the private Insurance is equal to, and better than in one area, the state plan (29). Temporary disability insurance for illness or Injury off the Job may be required in some states by legislation. 75 Sohool Djatriots and Health Insurance A review of the literature in the field of educa tion did not reveal a volume of material to be available• In June of 1965 a pamphlet was published by the American Association of School Administrators and Department of the National Education Association entitled, "Managing the School District Insurance Program." Many types of insur ance were discussed in explaining and advising the reader on the merits of the total school district program. A discussion or even mention of health Insurance for school district employees was most conspicuous by its total ab sence (75). In 1953 the Research Division of the National Edu cation Association sent out questionnaires to all looal associations affiliated with the National Education Asso ciation to ascertain the types of insurance available to its members in the health area. Of the 1,024 local associations, 44.7 per cent re ported no insurance was available. The associations represented 35.3 per oent of the 223,236 members covered in the study. The fact that six types of (health and related) insuranoe are available to 3.5 per oent of the teachers belonging to these 1,024 local associations and none is available to 35.3 per oent was more oonspicuous than any finding in the comparison of availability of the types of insur ance. (108:2) 76 Health Insurance was reported by 37.4 per cent of the associations, or about four in ten members of the total group. The study shoved that joint financial responsi bility for payment by teacher and school board ran a low second in payment of premiums for health and life insur ance. Payment by the teacher was predominantly the most frequent. Of the 383 local associations where health insur ance is available to members, 36.3 per oent credited the looal association with being responsible for availability; 29 per oent gave credit to the State association; 9.9 per cent to the joint action of the local association and the employing school board; 10.2 per cent to other groups not specifically iden tified. (108:3-4) No figures were given on the percentage of coverage ini tialed by the school board or administration separately. In November of 1957 Sturdivant indicated that the public wants adequate return for its money. In adequate teaching resulting from poor health can cause financial loss. In addition, school work Is interrupted and regular classroom work is often laid aside when a substitute steps in. Administration is likewise affected. Frequent illness in a faculty can lower morale, require numerous readjustments, and interfere with continuity, orderly pursuit, and quality of classroom work. How can turnover due to illness be reduced? (68:14) Sturdivant states in his third item addressing boards of eduoatlon that "group sickness and accident Insurance should partially be paid for by Boards (of Education) to help maintain teachers in a condition of good health*H (68:14) 77 In a letter by Robert A. Quinn, Director, Insur ance Section, Hew York State Department of Civil Service, Albany, New York, he states, Of the 180 local units of government participating In the program, 68 are school distrlots, and there are additional districts which have been approved for coverage but have not made the program active. * • • The 68 sohool districts in the program are providing coverage to 6,992 employees and their eligible dependents. Eighteen of the distrlots are also covering employees who were retired prior to the effective date of the coverage. The school dis trict or other local units of government may, at its option, cover those who are already retired. It is too early for us to have any statistical information on claims experience in the school districts. At the rate that school distrlots are applying for coverage it would be my impression that the employ ees are satisfied with the coverage and that the other sohool districts are being urged to provide protection for their employees. (118) In New York the school districts, depending on their location, are eligible for the state-wide plan or either of the two options (G.H.I. or H.IoP.) referred to under th® group practice sootion of related literature on page 61 of this chapter. Egly* s study has compared the percentage of office workers in industry with the percentage of school district classified employees covered by hospital, surgical, and medical insurance programs. Out of four regions and some seventeen large population centers, only three school dis tricts provided hospital, surgical, medical insurance coverage (90)o 78 Recent Trends In Health Insurance Today, when the average family man does a little reflective thinking, one of hie greatest worries is costly medical expenses* It is the most constant and the most frequent threat to his economic security* Each year the threat becomes a reality in millions of homes. It Is in terms of this reality that health insurance becomes a vital factor in the social and economic life of the people* Never before In history has so much attention been paid In the halls of Congress, in the press, and in the daily conversation of the public to the problem of meeting the rising cost of medical care (114:2)* Kinney found that less than twenty years ago the health insurance industry was a side-line endeavor of little economic significance or monetary value* Prepayment devices for the financing of medical care wore relatively unknown in most of th© country* Further on, Kinney comments that now health in surance Is a multibllllon dollar industry and prepayment medical servioe plans have grown in similar fashion (115: Introduction). "The migratory inclinations of our people, the trend to Industrialization have cast up problems of health care with which simple family and neighborhood arrangements cannot cope.” (91:3) 79 In 1940 a comprehensive study was made by Collins using some 9,000 families and reporting the causes and days of Illness. Studies like this have aided the health Insurance areas considerably In forming a factual founda tion upon which solvent and practicable programs can be built (41). The rapid growth of such health programs Is shown by the fact that a number of persons covered had more than doubled between 1948 and 1950. In the later years at least 7.7 million workers (about 50 per oent of all union membership) were estimated to be eligible for some type of health, welfare and/ or pension benefit. (13:17) By 1957 over 21 million persons were covered for disability income under 246,000 master polloies. Over 18 million employees were covered by accidental death and dismemberment under about 84,000 master policies. (4:269) In the current health insurance market there have been several excellent sources of data, mainly by the Health Insurance Council, Health Insurance Institute, and Health Information Foundation® Other authorities also have done much to compile useful and extensive data which will be referred to from time to time as we develop recent trends. A study by the National Analysists, Incorporated, done for the Health Insurance Institute, using a cross section of 2,000 sampled families comprising 6,600 indi viduals selected by area of probability, with an over-all response rate of 71 per cent, revealed some interesting current facts about health insurance (102)® The study 80 revealed that nearly three out of four families have some form of health insurance protection and in three out of five families every family member is insured. Nearly two out of five families vith coverage had used their health insurance in the twelve months preceding the interview. Nearly seven out of ten families had used the coverage at some time while their policies were in force. The survey indicated that the vast majority of Americans— over 80 per cent— are favorable to the idea of health insurance (102: 6) . Patterns and coverage indicate that most families have hospital coverage (66 per cent) followed by surgical (50 per cent), then medical with (47 per cent), major medical (18 per cent), and loss of income (18 per cent). It was interesting to note that the frequenoy of health coverage rises with chronological age with the peak in the thirty to forty-nine year age bracket (77 per cent) with a decline to some 35 per cent at sixty-five years and over. Men, women, and children have coverage In about the same frequency— 69, 67, and 66 per cent respectively. Family Income and health insurance coverage seem to be positively correlated. Tho study revealed that 80 per cent of the indi viduals from families with Incomes of #5,000 or more were covered; 74 per cent coverage with Incomes of #3,000 to #4,999; and 33 per cent coverage for families with incomes 81 under $3,000. As might be expected, the urban residence coverage is 84 per cent while the rural coverage la 56 per cent (102). In contrasting group and Individual coverages, over twice as many members Interviewed (49 per cent) were covered by group than by individual insurance (22 per cent)• The next point perhaps is very significant in that group coverage is much more common among individuals from families with incomes above $3,000. Th© breakdown was found to b© $3,000 to $4,999, 54 per cent; over $5,000, 62 per cent; and under $3,000, 13 per cent. This would tend to Indicate that the group insurance coverage was not reaching the low income groups— presumably one of its cardinal purposes. The number of persons holding individual policies varied little when compared on the basis of incomes® Of those earning $3,000 and under annually, 20 per cent had such policies; $3,000 to $4 ,999, 22 per cent; and over $5,000 income, 24 per cent. In only 27 per oent of fami lies is no one insured. More than one-half of the families with Incomes under $5,000 annually have every member cov ered; an additional 12 per cent of these families have some family members Insured (see Figure 1). All families 59% Families with incomes under $5,000 Families with Income; $5,000 and over i I All members insured Some but not all members insured No members insured Fig. 1.— Public Health Insurance Profile: Extent of health insurance coverage in families. Source: A Profile of the Health Insurance Public, A . national study of the pattern of health Insurance coverage, public attitudes and knowledge, Health Insurance Institute, New York, 1959, p. 12. 83 Revealing the kind of protection that American families have, the study indicated that 5 per oent of the families had hospital Insurance only, 29 per oent had a combination of hospital, surgical and medioal Insurance ( 102) . In quest for more protection, 24 per cent Indicated that they would like more coverage, and 26 per cent of the 24 per oent indicated that they would like to have in creased benefits in terms of dollars or days. The study asked all types of insurers what they believed was most lacking in the health insurance plans. One area that was consistently the most frequently men tioned (except in service plans where it was a very close second) was the desire for more information. Little variation existed among types of Insurance organization with respect to the frequency with which claims were submitted® During th© 1959 year, 38 per cent; of service type plans (nonprofit hospital, physician type plans, and group practice plans) submitted claims, while 40 per cent with Insurance company plans (indemnity, for the most part) submitted claims. In determining and evaluating the types of plans most practicable, the amount of medical expense (includ ing loss of Income) Involved In the most recent claims was obtained. Some 32 per cent of the families reported 84 medical expenses of less than $100; 54 per cent estimated expenses to be between $100 and $500; and 14 per eent re ported expenses of more than $500* In 45 per cent of the cases Illness was involved, in 21 per cent accidents were involved, 17 per cent were attributed to maternity, and 17 per cent to a combination of causes. Some 55 per cent of the families which reported claims received payment for most or all of their medical expenses on the most recent claim. In 20 per cent of the cases the families were reimbursed for three-fourths of their expenses, 15 per oent received half-reimbursement, and 9 per oent were paid one-quarter of their claimed expenses. As to exposure to a health insurance plan, it was indicated that 92 per cent of all families have had health insurance offered to them (102). Another national family survey of medical costs and voluntary health insurance oonducted under the aus pices of the Health Information Foundation was based on 2,809 single Interviews of families in their homes. The families comprised 8,846 individuals representing a nation al sample of the population of the United States sub divided by age, sex, income, size of the family, rural- urban, occupation, and region. The survey was actually conducted by the National Opinion Research Center at the 85 University of Chicago in 1954 (82). As is exhibited in Table 1, it was reported that over eighty-seven million people* or 57 per cent of the population* have some hospital insurance. Over seventy- four million people* or 48 per oent* have some surgical and other medical insuranoe according to the study. Most of the 48 per cent have only surgery and in-hospital physicians1 services. Some 4*900*000 have substantially complete physicians' services (82). With respect to occupation, there is a variation of from 30 to 90 per oent among groups which have some type of health insurance. With respect to family income level, 41 per cent of those earning under $3,000 have some type of health insurance and 80 per cent of families earn ing over $5,000 have some form of health insurance. In urban areas 70 per cent of the families are en rolled in some type of health insurance and in rural-fam areas 45 per cent are enrolled. This figure shows less contrast than in the previous study (102). As to the place of contact for buying or being provided with health insurance, this study revealed that 80 per cent of the families having health insurance ob tained the insuranoe through their place of work or in an employed group. The total annual charge for personal health 86 TABLE 1 PERCENTAGE OP PERSONS IN EACH GEOGRAPHIC REGION WITH VOLUNTARY HEALTH INSURANCE BY TYPE OP COVERAGE Region Type of insuranoe Hospital* Surgical, or medicalb Northeast 62 48 North Central 64 56 South 49 44 West 47 43 Average 57 48 ^hese figures are net of estimated duplication, i.e., they represent the percentage of persons covered by at least one hospital plan or policy. bThese figures are net estimates of duplication, i.e., they represent the percentage of persons covered by at least one surgical or medical insuranoe plan or policy. Source: National Family Survey of Medloal Costs and Voluntary Health Insurance. Health Insuranoe foundation, l3>54 (68:1^). 87 services incurred by families in the United States is 10,2 billion dollars* Of this amount, physicians’ charges ao~ count for 3*8 billion (37 per oent), hospitals 2.0 billion (20 per oent), prescriptions and medicines 1*5 billion (15 per cent), other medical goods and services 1*3 billion (13 per cent), and dentists 1*6 billion (16 per oent). Of all charges incurred by families, 15 per cent is covered by Insurance benefits* This might indicate that our health Insurance programs, as widely dispersed as they have been in the last few years, are paying a relatively small part of the total national health ex penses* All charges incurred broken down by the type of service are: hospital servioes 50 per cent, all physicians’ services 13 per oent, surgery 30 per cent, obstetrics 25 per cent (82:25)* The average charge for all personnel health serv ices is approximately #207 per family; one-half of th© families have more than #110* The families with Insurance, the study reveals, Incurred a total medical cost of over twice as great as those without insurance--#145 compared with #63* Seven per cent of the families incurred charges in excess of #495* This can give some clue as to the im portance of the large maximum amount of some policies which will perhaps never be used except as a good selling point, and also that first dollar coverage will encompass 88 muoh more activity, charge-wise, than a high deductible major medical. Related to this fact, the study finds that approximately one million families paid out amounts equal ing or exceeding one-half of their annual Incomes, and about one-half million families paid out amounts equal to or exceeding 100 per cent of their incomes (82). To garner some information on how well the insur ance is covering those who are provided with it, the study lndloates that among families receiving hospital insuranoe benefits, 50 per oent had 89 per oent or more of their gross hospital charges covered by hospital insuranoe© Among families receiving surgical insurance benefits, 50 per oent had 75 per cent or more of their gross surgical charges covered by surgical insurance (82). In terns of the hospital admission rate and the stay in the hospital, the study showed the general hospi tal admission rate for all families to be 12 per 100 per sons per year© Those with Insurance had a rate of 13, and those without insuranoe a rat© of 10© Th© average length of stay for all persons hospitalized was 9.7 days with virtually no difference between those with insuranoe and those without insuranoe. This is an interesting bit of statistics in that the general claim seems to be that If a person is covered by Insurance thore tends to be an over- utilization of hospital car© (82). 89 Th© number of hospital days per 100 persons per year was 100 days; for those with insurance the rate was 110 per 100 persons* and for those without insurance the rate was 80* This may tend to modify the above informa tion on utilization in that perhaps those people covered by insurance are remaining longer in the hospital, or at least certain cases increase the statistic (82). The rural-farm population had a hospital admission rate of 17 per 100 and the insured urban population had a rat© of 12. There was no difference for those not Insured (82). The number of surgical procedures per 100 persons per year for all families was six; among insured the rate was seven, and among uninsured families the rate was four. Among all families 34 per cent of the individuals sought dentists1 services during the year, varying from 17 per cent for income groups under $2,000 to 56 per cent for income groups over $7,500. How well do families fare in completely paying all of their health bills? Among all families, 15 per cent are in debt to hospitals, physicians, dentists, and other providers of medical goods and services; their total debt is 900 million dollars. The average debt among all families for bills owed to hospitals, physicians, dentists and other providers of medical goods and services is $121® 90 When debts to financial institutions and individuals are included, the national total is 1*1 billion dollars (82)* A greater proportion (21 per eent) of the families with children have a medical debt than those without chil dren (82)* The Health Insurance Institute in its source book indicated that persons protected by health Insurance re ceived an all-time high of 4,7 billion dollars in benefit payments in 1958. This was a 10 per cent increase in such benefits over 1957 (.10526) c Prom July, 1957 to June, 1958, according to the National Health Survey conducted by th© United States De partment of Health Education and Welfare, the average patient remained in the hospital 8,6 days* This, It can be noted, contrasts by about one day with the findings of th© National Family Survey (82) reported above, Th© source book indicates In its study that th© age group fifteen to twenty-four years experienced th© highest rate of hospital confinement® This may be con trary to popular belief that those over sixty-flv© have the highest Incident of hospital confinement. In the comprehensive nature of the coverage, the source book reported that at the end of 1958, some 91 per cent of those persons insured against hospital expenses also had surgical expons© protection, whereas only 62 per 91 cent of those with hospital expense insurance had surgical expense protection in 1949 (103)® In line vlth the rapid growth of health Insurance the study shows that from year end 1954 through 1958, there was a 30 per cent over-all Increase in the number of persons Insured against hospital expense by Insurance company programs (see Table 2)• In view of the growth, it might also be interest ing to note that in total insurance for surgical expense protection between 1940 and 1958 there was an increase of over twenty fold and over twenty-five fold increase of regular medical expense protection between 1940 and 1958 (103). The total amount of major medical expense protec tion insurance coverage issued has multiplied well over 100 times between the years 1951 and 1958, a period of only seven years® Part of the explanation for this phe nomenal Increase lies in the newness of this type of pro tection which had its birth in 1949 (see Figure 2)® In 1958 the total amount of premiums received by voluntary health Insurance programs reached 5*9 billion dollars. This was a 55 per cent increase over a five-year period and 4*3 billion more dollars in premiums than were received In 1949 (103:24)® 92 TABLE 2 NUMBER OF PERSONS IN THE UNITED STATES HAVING HOSPITAL EXPENSE PROTECTION, BT TTPE OF INSURER, 1940-1958 End of year Total* persons pro tected Totalb number of sub scribers Group policies Individual and family policies Blue Cross, Blue Shield and medical society plans Inde pend ent plans 1940 12,312 3.700 2,500 1,200 6,012 2,600 1941 16,349 5.350 3.850 1.500 8.399 2,600 1942 19,695 6,880 5.080 1,800 10,215 2,600 1943 24,160 8,900 6,800 2,100 12,600 2,660 1944 29.232 10,800 8,400 2,400 15.772 2,660 1945 32,068 10,504 7.804 2,700 18,899 2,665 1946 42,112 14,315 11.315 3,000 24,707 3.090 194? 52,584 21,127 14,190 7.5 84 27.986 3.775 1948 60,995 26,786 16,741 11,286 31,246 3.765 1949 66,044 30,216 17,697 14,729 34,315 3.760 1950 76,639 36,955 22,305 1? ,296 38,822 3,619 1951 85.348 44,288 26,663 20,802 40,933 3.531 1952 90,965 46,842 29.455 21,412 43,475 5.364 *Net total of persona protected. This figure eliminates duplication among persons protected by more than one kind of insuring organization or more than one insurance company policy proriding the same type of coverage. Net total of persons with insurance company protection. 93 TABLE End of year Total persons pro tected Total number of sub scribers Group policies Individual and family policies Blue Cross, Blue Shield and medical society plans Inde pend ent plans 1953 97,303 52,218 33,575 23,475 45,829 4,834 1954 101,493 55.282 35.090 25,338 47,484 5,196 1955 107,662 59,654 39.029 26,706 50,726 4.530 195^ 115,949 66,259 45,211 27.629 53.162 4,654 1957 121,432 70,192 48,439 28,673 54,923 4,830 1958 123,038 71,798 49,508 29.372 55.205 4,865 Sources Health Insurance Council, Health Insurance Institute, Source Book of Health Insurance Data. 1959, p. 12. 18 Millions ol p e o p le p r o t e c t e d at end of year 16 14 12 10 8 1951 52 53 54 55 56 57 58 Year Fig* 2*— Growth of major medical expense ooverage in the United States from 1951 to 1958* Source: The Extent of Voluntary Health Insurance Cover age In th e tfnfied ^ t a i e s a s of t)eoem b er $1* 15&&, Healtii jtnauranoe dounctX^ 13th Annual S u r r e y , August, 1959, p. 21* TABLE 3 NUMBER OF PERSONS IN THE UNITED STATES HAVING REGULAR MEDICAL EXPENSE PROTECTION, BY TYPE OF INSURER, 1940-1958 End of year Type of insurer Total persons. protected® Group policies Insurance companies Individual and family policies Total sub scribers® Blue Cross, Blue Shield and medical society plans Inde pendent plans 1940 — . . 200 2,800 3,000 1941 — oa a <s> 300 2,800 3,100 1942 ••OB am am 400 2,800 3,200 1943 — 1 B C 9 . . 600 2,811 3,411 IS 44 100 100 200 800 2,840 3,840 1945 335 200 535 1,300 2,878 4,713 1946 567 300 867 2,350 3,204 6,421 1947 1,098 1,111 2,116 2,985 3,844 8,898 ?Net total of persona with insurance company protection (000 omitted). ®Net total of persons protected--eliminates duplication of persons protected ® by more than one kind of insuring organisation or company policy w/same coverage. End of year 1948 1949 1950 1951 1952 1955 1954 1955 1956 1957 1958 Soup TABLE 5— Continued Type of insurer Insurance companies Blue Cross, Blue Shield Group Individual Total and medical Inde- Total policies and family sub- society pendent persons policies scribers plans plans protected 1,927 1,810 3,538 5,712 5,859 12,895 2,756 2,550 4,827 8,508 3,835 16,862 5,587 2,714 8,001 11,428 2,873 21,589 7,946 4, 230 11,711 14,347 2,791 27,723 10,157 4,965 14,220 18,321 5,150 35,670 13,787 5,824 18,361 21,674 5,260 42,684 15,778 6,513 20,721 24,668 4,908 47,248 20,678 6, 264 25,031 29,451 4,639 55,506 25,177 6,789 29,756 35,907 5,276 64,891 28,517 7,371 33,240 36,926 5,905 71,813 29,868 7,869 35,142 38,860 6,015 75,395 Source Book of Health Insurance Data, Health Insurance Institute, New York, 1§5$, p. 16. <o o > TABLE 4 NUMBER OF PERSONS IN THE UNITED STATES HAVING MAJOR MEDICAL EXPENSE PROTECTION, 1951-1958* End of year Supple mentary Group policies Compre hensive Total Individual and family policies Grand total 1951 96 96 12 108 1952 535 0 9 SO S33 156 689 1955 1,044 8 3 O 1,044 176 1,220 1954 1,841 51 1,892 306 2,198 1955 5,928 .831 4,759 482 5,241 1956 6,881 1,413 8,294 582 8,876 1957 9,290 3,138 12,428 834 13,262 1953 11,072 5,157 16,229 1,146 17,375 dumber of persons cohered by Insurance companies only (OOO omitted). Source: Souree Book of Health Insurance Data, Health Insurance Institute, New for1c,"KS§, p. "IS.------------------ 98 TABLE 5 NUMBER OF PRIMARY INSUREDS AND DEPENDENTS PROTECTED BY HEALTH INSURANCE IN THE UNITED STATES* IN 1952-1968 Type of Year Number of people protected (000 omitted) Primary Insureds Dependents Total Hospital expense 1952 40,114 50,851 90,965 1955 43,166 54,137 97,303 1954 44,053 57,440 101,493 1955 46,826 60,836 107,662 1956 49,253 66,696 115,949 1957 51,158 70,274 121,432 1958 51,593 71,445 123,038 Surgical expense 1952 31,856 40,603 72,459 1953 35,372 45,610 80,982 1954 36,462 49,428 85,890 1955 39,023 52,904 91,927 1956 41,937 59,388 101,325 1957 44,603 64,328 108,931 1958 45,078 66,357 111,435 *Net total of people protected— eliminates dupli cation among persons protected by more than one kind of insuring organization or more than one Insurance company policy providing the same type of coverage® 99 TABLE 5— Continued Type of Number of people protected (000 omitted) protection Year Primary insureda Dependenta Total Regular medical expenae 1952 17,279 18,391 35,670 1953 19,923 22,761 42, 684 1954 21,527 25,721 47,248 1955 24,763 30,743 55,506 1956 27,660 37,231 64,891 1957 30,189 41,624 71,813 1956 31,364 44,031 75,395 Major medical expense 1952 350 339 689 1953 578 642 1,220 1954 911 1, 287 2,198 1955 2,427 2,814 5,241 1956 3,816 5,060 8,076 1957 5,483 7,779 13,262 1958 6,763 10,612 17,375 Souroe: Souroe Book of Health Inaurance Data, Health Inaurance Institute, New York, l9§9, p. 20. 100 On the benefit aide of the ledger the source book indicates that health inaurance benefit payments to unin~ sured persons by all voluntary Insuring organizations reached a new high of 4.7 billion dollars in 1958, a 72 per cent increase over 1954 and almost five times the amount of benefits paid in 1949 (103). In 1958 there were some 1,200 insuring organizations providing the American publio with health insurance against hospital, surgical, and medical expenses re sulting from illness or injury. Of these there were over 706 insurance companies, 83 Blue Cross Plans, 66 Blue Shield Plans, and some 400 independent plans* (103:42) Further information with reference to th© rapid growth of health insurance indicates that there were one and one-half million more persons protected against the oost of hospital care in 1958 than the previous year, an Increase of 1.3 per cent. There were over 2-l/S million more people pro- tected against surgical care in 1958 than the previous year, tun increase of 2.5 per cent. In the area of protection against medical costa care over 3-1/2 million people were protected in 1958 over the previous year, an increase of 5 per cent* (99:7) From 1954 through 1958, a period of four years, th© Health Insurance Council reports that th© total bene fits paid by all voluntary organizations toward hospital, surgery, and medical expenses rose some 78 per cent to 3.9 billion dollars (99). In the number of Americans protected against var ious health expense 123 million wore protected against 101 hospital, 111 million against surgical, and 75 million against regular medical costs by the end of 1958, By the end of 1958 there were ten times as many persons with hos pital expense protection, twenty times as many protected against surgical expenses, and twenty-five times as many protected for medical expenses os at the end of 1940, At the end of 1958 Inaurance companies covered seventy-two million persons against the cost of hospital care or 54 per cent of the total number so protected* Blu© Gross and Blue Shield covered fifty-five million per sons or 42 per cent of the total number so protected* In dependent plans covered five million persons or 4 per cent of the total number so protected (99:14). In surgical care the Insurance companies covered sixty-nine million or 57 per cent of the total covered, Blue Cross and Blue Shield forty-six million or 38 per cent, and independents six million or 5 per cent at th© end of 1958* In medical care at the end of 1958 Blue Gross and Blue Shield moved Into first place covering thirty-nine million or 49 per cent, Insurance companies thirty-five million or 44 per cent, and Independents six million or 7 per cent. Major medical expense Insurance provided the public with protection against th© especially heavy 140 Millions of people 120 100 80 60 40 20 0 / ^ / s f / / w / / / / / / t f y / / / s / / / / / / / ./ r '..... / / { / / y ~ ‘ / / / ____-1 / ^ « « * • 1940 1945 1950 Year 1955 1958 Hospital Surgical Regular Medical Pig. 3.— Growth of hospital, surgical, and regular medical expense protection in th© United States from 1940 to 1958. Souroe: The Extent cf Voluntary Health Insuranoe Cower age in the tfnlted States as of beoemher 31, 19&8. health inaurance Council, 15th Annual Purvey, August, 1959, p. 12. 103 expenses of hospital and doctor care from catastrophic and prolonged Illness or Injury and is increasing at a faster rate than any other type of health Insurance (99:19). At the end of 1958 over four million were protected by major medical insurance, an increase of 31 per cent over the previous year. It is a case in point to note that "the number of persons with comprehensive group major medical insurance (first dollar coverage) are increasing at a faster rate than those with supplemental protection." (99:19) Comprehensive plans increased 64.3 per cant in 1958 over 1957, while supplementary major medical plans in creased 19.2 per cent in 1958 over 1957. In terms of total health benefits paid in 1958 there was a 9.8 per cent Increase over the previous year, with a 1/3 per cent increase in the number of persons with hospital expense protection. In terms of the amount of money paid out for bene fits, the Insurance companies In 1958 accounted for 46.6 per cent of the total hospital, surgloal, and medical benefits; while Blue Gross and Blue Shield represented 47,2 per cent; and the independents 6*2 per cent (99:27). Previously we have referred to the impetus of the Income tax structure In furthering the development of health and welfare plans. More recently this point has 104 Increased In Importance as being deductible as a business expense*. In the Journal of the American Dental Associa tion It Is stated that present tax laws stake It less expensive for the company and much store favorable to the Individual to reoelve a part of compensation in the form of certain employee benefits rather than In oash. For example, employees who buy medical care wor ried with after tax dollars. Medical care bene fits in an employee benefit program are provided before tax dollars, from the standpoint of the employee. The same dollar buys more when spent by the company. (34:67) The Eugene Robinson Company1s Newsletter of July, 1960 indicated that Sections of the 1954 Internal Revenue Code which govern in regards to the tax status of benefits payable under employer hospitalization, surgical, medical, and wage replacement (disability and Workmen’s Compensation Insurance) include: contri butions by the employer to provide hospitalization, surgical, medical, and wage replacement benefits are excluded from the employees gross income Sec tion !<)(>. Secondly, benefits received as a result of the employex-s’ contributions are excludable under Section 105, 100 per cent in case of hospl- talization, surgical benefits, and up to "$100 a week in case of wage replacement benefits ..." (106:1) The Newsletter goes on to say that benefits received as a result of the employees’ own contributions to hospital, surgical, medical, and wage replacement plans are excludable under Seotion 104. (106:1) This coverage also Included the spouse and dependents. The total expenditures for voluntary health insur ance and medical care from private sources totaled 16.4 105 billion dollars or about 5 per cent of the disposable personal income* Per capita expenditures were nearly $96 *00, distributed as follows: $30*00 hospital service, $25*00 for physicians, $25.00 for medicines and appliances, $10*00 for dentists1 services, and $6*00 for all other medical expenses (see Table 6) (28:46). This subject is also reflected in the Survey of Current Business publica tion for July, 1959, illustrated in Table 7* As has been indicated previously the introduction of collective bargaining has had much to do with the ex pansion of voluntary health insurance plans. For the next few paragraphs we will pinpoint several studies in this area. As a dental publication has indicated, "Between 1950 and the present time health and welfare had provided the greatest area of activity in union-management negotia tions." (76:8) In 1959 a report from the California Division of Labor Statistics surveyed nearly fifteen hun dred union agreements with an eye on the health and wel fare provisions (21). Contracts were reviewed in the Los Angeles-Long Beaoh metropolitan area, San Francisco- Oakland metropolitan area, and the remainder of the state. It was found that 82 to 87 per cent of all contracts had health and welfare provisions. "More than a million Cali fornia union workers, 90 per cent of those under nego tiated health and welfare plana, have the full cost of TABLE 6 PRIVATE EXPENDITURES FOB MEDICAL CARE A® VOLUNTARY HEALTH INSURANCE, 1 9 1 ( 0 - 1 9 5 8 106 Hospital services® Physician1 services Medicines Insur- Expenses Insur- Expenses and appli- Dentists All lear Direct ance forpre- Total Direct ance forpre- Total ances® services other Total payments benefits payment payments benefits payment EXPENDITURES IN MILLIONS OF DOLLARS ww 1 , 2 3 9 9 5 5 1 9 2 1 , 8 8 1 2 , 2 0 9 1 5 1 6 9 2 , 9 2 9 1 , 8 9 7 9 0 0 5 9 5 7 , 6 9 7 m 1 , 2 6 9 5 3 9 1 6 8 1 , 9 7 1 2 , 1 9 3 2 2 8 8 1 2 , 9 5 2 2 , 0 0 9 9 2 0 5 6 0 7 , 9 1 2 1 9 5 0 1 , 9 9 6 5 8 0 1 8 9 2 , 3 1 5 2 , 1 5 0 3 1 2 no 2 , 5 7 2 2 , 2 0 5 9 6 1 5 9 2 8 , 6 9 5 1 9 5 1 CK 3> * —1 8 9 7 1 8 8 2 , 5 2 9 2 , 1 0 0 9 5 6 1 1 9 2 , 6 7 5 2 , 5 2 5 9 9 7 6 3 0 9 , 5 3 1 1 9 5 2 1 , 5 2 8 1 , 0 7 9 2 3 2 2 , 8 3 9 2 , 1 7 2 5 3 0 1 5 7 2 , 8 5 9 2 , 6 3 8 1 , 0 9 8 6 6 9 1 0 , 0 9 8 1 9 5 3 1 , 6 3 9 1 , 2 7 3 2 8 3 3 , 1 9 5 2 , 2 9 2 6 9 8 2 1 5 3 , 1 0 5 2 , 7 9 1 1 , 2 3 9 7 1 6 1 0 , 9 9 1 1 9 5 9 1 , 7 2 5 1 , 9 9 2 3 2 5 3 , 9 9 2 2 , 9 2 5 7 3 7 2 5 2 3 , 9 1 9 2 , 7 5 8 1 , 9 0 6 7 7 9 1 1 , 8 9 9 1 9 5 5 1 , 8 3 3 1 , 6 7 9 3 3 9 3 , 8 5 1 2 , 3 8 5 8 5 ? 2 7 5 3 , 5 1 ? 3 , 1 5 8 1 , 5 0 8 8 0 3 1 2 , 8 3 7 1 9 5 6 1 , 8 8 3 2 , 0 2 2 3 9 6 9 , 2 5 1 2 , 5 9 7 9 9 3 2 6 3 3 , 8 5 3 3 , 6 8 3 1 , 6 2 5 8 7 6 1 9 , 2 8 8 1 9 5 ? 1 , 9 1 7 2 , 3 0 9 3 7 5 9 , 5 9 6 2 , 6 6 1 1 , 1 7 0 2 9 9 9 , 1 2 5 9 , 0 5 2 1 , 6 5 8 9 2 1 1 5 , 3 5 3 1 9 5 8 2 , 1 7 0 2 , 5 9 1 3 9 1 5 , 1 0 2 2 , 7 2 5 1 , 2 8 6 2 7 9 9 , 2 9 0 9 , 3 6 2 1 , 6 7 9 9 6 9 1 6 , 3 9 ? includes expenditures in outpatient department of hospitals. ^Includes some payments for services of nurses, dentists, laboratories and prescribed drugs. ®Prug preparation® and sundries account for 7R to 78 per cent of this item, the remainder represents ophthalmic products (eyeglasses) or orthopedic appliances. ^Includes other professional services (osteopathic physicians, chiropractors, chiropodists and podiatrists, private duty trained nurses and miscellaneous curative and healing professions) and skilled nursing homes, 107 TABLE 6-Coptinwd Hospital services Physicians' services Medicines Insur- Expenses Insur- Expenses and appli- Dentists All lear Direct ance for pre- Total Direct ance for pre- Total a ances services other Total payments benefits payment payments benefits payment EXPENDITURES PER CAPITA IN DOLLARS im 8 . 5 0 3 . 1 3 1 . 3 2 1 2 . 9 6 1 5 . 2 2 1 . 0 4 , 4 4 1 6 . 7 0 1 3 . 0 7 6 . 2 0 3 . 7 5 5 2 . 6 8 m 8 . 5 3 3 . 6 9 1 . 1 4 1 3 . 3 6 1 4 . 3 6 1 . 5 3 . 5 1 1 6 , 4 0 1 3 . 4 ? 6 . 1 0 3 . 6 9 5 3 . 0 2 1 9 5 0 9 . 6 3 4 . 5 3 1 , 2 6 1 5 . 4 1 1 4 . 3 1 2 , 0 8 • 7 3 1 7 . 1 2 . 1 4 . 6 8 6 . 4 0 3 . 9 4 5 7 . 5 6 1 9 5 1 9 . 2 9 5 . 9 0 1 . 1 8 1 6 . 3 7 1 3 . 7 1 2 . 9 5 . 7 4 1 7 , 3 9 1 6 . 3 6 6 . 3 4 4 . 1 3 6 0 . 5 9 1 9 5 2 9 . 9 6 7 . 0 0 1 . 5 1 1 8 . 4 8 1 4 . 1 6 3 . 4 6 1 , 0 2 1 8 . 6 4 1 7 . 2 0 7 . 1 6 4 . 3 6 6 5 . 8 4 1 9 5 3 1 0 . 2 2 8 . 0 7 1 . 7 4 2 0 . 0 3 1 3 . 9 3 4 . 1 1 1 . 4 2 1 9 . 4 6 1 7 . 2 4 7 . 7 5 4 . 4 3 6 8 . 9 1 1 9 5 4 1 0 , 8 4 9 . 0 6 2 . 0 4 2 1 . 9 5 1 5 . 2 4 4 . 6 3 1 . 5 8 2 1 . 4 6 1 7 . 3 4 8 . 8 4 4 . 8 7 7 4 , 4 5 1 9 5 5 1 1 . 2 9 1 0 . 3 4 2 . 0 9 2 3 . 7 3 1 4 . 6 9 5 . 2 8 1 . 6 9 2 1 , 6 7 1 9 . 4 6 9 . 2 9 4 , 9 5 7 9 . 0 9 1 9 5 6 1 1 , 3 9 1 2 . 2 3 2 . 0 9 2 5 . 7 1 1 5 . 7 1 6 . 0 1 1 . 5 9 2 3 . 3 0 2 2 . 2 8 9 . 8 3 5 . 3 0 8 6 . 4 2 1 9 5 7 1 1 . 3 9 1 3 . 6 8 2 , 2 3 2 7 . 3 0 1 5 . 8 0 6 , 9 5 1 , 7 5 2 4 , 5 0 2 4 . 0 7 9 . 8 5 5 . 4 7 9 1 , 1 9 1 9 5 8 1 2 . 6 6 1 5 . 1 1 1 . 9 9 2 9 . 7 6 1 5 . 9 0 7 . 5 0 1 . 6 3 2 5 , 0 2 2 5 . 4 4 9 . 7 6 5 . 6 5 9 5 . 6 5 S o u r c e ! U . S . Department of Health, Education, and W e l f a r e ; Social Security Administration; S o c i a l . Security B u l l e t i n . December, 1 9 5 9 * Basic data are from U . S . Department o f Commerce. D . S . Income and Output. Supplement to Survey of Current Business, 1 9 9 9 . Includes employer contributions but excludes expenditures ( a ) for the Aimed Forces, their dependents, and verterans, (b) by public health and other government agencies for workmen's compensation, a nd ( c ) b » y private philanthropic organisations directly to or through hospitals, ( 2 8 : 4 6 ) 108 TABLE 7 SURVEY OP CURRENT BUSINESS— MEDICAL CARE AND DEATH EXPENDITURES, 1956-68 Expense classification Amounts expressed in millions of dollars 1956 1957 1958 Drug preparations and sundries. $ 2,869 $ 5,062 # 5,261 Ophthalmic products and orthopedic appliances • ® ® © 814 900 1,101 Physicians. .......... 3,512 3,741 3,901 Dentists....................... 1,625 1,658 1,674 Other professional services • . 706 741 769 Privately controlled hospitals and sanitariums ....... 3,524 3,880 4,319 Medical care and hospitalisa tion insurance. ....... 1,076 1,210 1,359 Funeral and burial expenses . . 1,270 1,362 1,442 Totals. ................... .. 15,396 16,644 17,826 Souroe: Survey of Current Business: National Income dumber. ti.S. Department of (!lo— leree. office of Business Economlos, July, 1959, p. 17. 109 their plans paid for by the employer,H (21:6) (Sea Table 8. ) TABLE 8 METHODS OP FINANCING GROUP INSURANCE PLAN COSTS TO EMPLOYERS AND EMPLOYEES, STATE OP CALIFORNIA, 1958-59 Workers covered Finanoing arrangements Number Per cent Employer pays full cost 1,079,020 90 Employer and employee share costs 106,460 9 Information not available 14,420 1 Total 1,199,900 100 Souroe: State of California, Department of Industrial Relations, Division of Labor Statistics and Research, California Industrial Relations Reports, No® 19, August, 19$§, p® A large proportion of the employees covered by negotiated health and welfare plans, about 70 per cent, work under contracts whioh specify a rate of money pay ments the employer agrees to make toward the cost of medi cal care coverage (21:7). The survey reports that this money is usually paid in a jointly administered trust fund® The board of trustee® of th® fund contracts for a set of 110 benefits to be provided generally including hospitaliza tion, surgical and medical, and sometimes dental care and life insurance. Frequently medical care benefits are provided for the worker's family as well as for the work- er (21:7). Based on 300 selected health and insurance plans under collective bargaining from 1955 through 1959, a study was made by the federal government comparing the percentage of health insurance plans providing hospital benefits to active and retired workers and their depend ents (see Figure 4) (32). A similar study conducted by the Department of Health, Eduoation and Welfare in California revealed that "about two-thirds of the workers received medical care benefits through an inaurance company involving twenty- seven insurance companies." (32) About one-third of th© workers were covered by service type plans and about 1 per cent by employee benefit associations. The study in dicated that there seemed to be more exclusions from th© service type plans than from the insurance company plana (22:9). Two surveys inoluding the data on health and wel fare coverage have been made in southern California area by local governmental agencies (13 and 14). A survey don® jointly with the city, county, city housing areas of Los Per cent of plans 0 10 20 30 40 50 60 70 80 90 100 ~i------ 1 ------- 1 ------ 1 ------- 1 ------ » ----— i --------1 ------- 1 ------- 1 --------1 ACTIVE WORKERS 397.7 Late 1955 397.7 Early 1959 ACTIVE WORKER’S DEPENDENTS D92.7 Lata 1955 D94.3 Early 1959 RETIRED WORKERS Lata 1955 338.3 Early 1959 RETIRED WORKER’S DEPENDENTS 18.7 Lata 1955 337.0 Early 1959 Note: Total number of plana under collective bargaining studied In late 1955 and early 1959 - 300. Pig. 4.— Per cent of health Insurance plans pro viding hospital benefits to active and retired workers and their dependents in late 1955 and early 1959. Souroe: Health and Insurance Plans Under Oolleotlve bargaining. Mosplfcal Benefits, bariy 16s#, bureau of LaborStatistics, tf.S* Department of Labor, Bulletin No. 1274, March, 1960, p. 5. 112 Angeles, and the Los Angeles City Schools, covering about 100 of the largest employers’ organisations In the area, revealed that surgical and hospital benefit plans are partly or entirely paid for by 92 per cent of the employers and for 88 per cent of the employees surveyed* Major medical benefits are provided by 56 per oent of the firms for 71 per cent of the employees. Employer payment of at least half of the costs for health and welfare benefits was reported for 89 per cent of both the firms and the employees surveyed* Suoh benefits the survey revealed are paid for entirely by 57 per cent of the companies and for 59 per cent of the employees surveyed* (23:22) The second survey referred to above conducted by Los Angeles County, covering employee benefits and person” nel practices in local government jurisdictions In Cali fornia in 1957, Indicated that eighteen jurisdictions re ported no employer-paid (In whole or in part) health and welfare plans; and that eight other jurisdictions reported health and welfare plans paid in whole or in part by th© employer. Hone included dependents1 benefits paid for* by the employer (17)* Medical Care for the Aged and the ----- Canadian "Plen---- Care for the aged in the area of health insuranoe and health insurance coverage for the active employee have not generally been thought of as being closely related* In actual eatperionee, however, the gap between those areas 113 Is being narrowed by the recent federal health Insurance plan described in an earlier section (pages 68 through 73) and the Forand Bill (Representative Aims J. Forand, Rhode Island) which has in part stimulated current health plans to reach out and Include this group of aged in their fold. Very briefly, the Forand Bill provides medical care, sup ported by taxes, for all who retire on Social Security pensions. Its coverage is quite comprehensive and perhaps in an election year during the 1960's it (or a watered- down substitute) has a better than average chance of being passed (59). Needless to say, this is not the only health bill for the over-sixty-five citizen now in the congres sional hoppers as "one plan after another is showing up in Congress . . . Politicians are trying to outdo each other in pressing for action." (38:51) Even as federal legislation Is contemplated, private Insurance companies and nonprofit health service groups are indicating there are two developments In health insurance of special sig nificance to young and middle-aged persons. One is the increasing opportunity for obtaining lifetime protection. In addition, "paid up at sixty-five plana" are now avail able on a nation-wide basis (104:6). In line with the above proposals, Canada has a federally sponsored hospital Insurance, each province providing leadership In the programs® It Is open to all 114 agea, all Incomes* and Is quite comprehensive In hospital coverage (53). Dental Care Insurance You will note from a copy of the questionnaire (Appendix A) that the Investigation Into the dental plans has been brief. However, since a cursory examination has been made Into the possibility of plans by the question naire, a brief treatment of related literature la devel oped as background® It la only recently that any appreciable attention has been directed to the area of dental plans, principally prepaid dentistry. As indicated by Friedrich, At the present time the profession, through the leadership of the American Dental Association, is studying, developing, compiling and disseminating information on the four methods for meeting the cost of dentistry? (1) Using th© personal resources of the indi vidual patient® (2) Using the resources of a financing agency through a plan developed and administered by a den tal society and a bank (budget payments)® (3) Using the resources of a specific group which administers eligibility of the beneficiaries (service corporation)® (4) Using the resources of Insurance companies for the administration of claims and payment for dental care (application of the insurance princi ple). (47:1) 115 An area of rather extensive activity and growth in the past few years has been the dental service corpora tions* Dental service corporations do three things: (1) maintain adequate professional control over the operation of group purchase plans for dental care; (2) provide an acceptable substitute for closed panel plans and other dental care plans which might be proposed by organizations or groups; and (3) provide an acceptable means for admin istration of plans which may be developed under the gen eral matching formula for public assistance welfare pro grams* As of early 1960 ten state dental service corpora tions had been formed, three of which were in operation in California, Oregon, and Washington (42:1-3). In this connection, Friedrich stated: The dental society should maintain active contact with members of the insuranoe industry and with all agencies Interested in the group purchase of dental care. He advocates strong state dental societies to guide the existing programs and de velop new programs in dentistry. (48) Some of the early programs involving dental care included the Federal Security Administration Plan of 1935 which provided for some dental care for financially stricken farmers (76:8). The Veterans' Administration program is a current out-patient program for dental needs to veterans' dental disabilities. About 85 per cent of all cases treated between 1946 and 1953 were completed by participating 116 dentists* agreeing to acoept the Veterans Adminis tration fee schedule • • • Experience in private agencies has generally taken three forms: (a) a dental service that is part of a union health cen ter owned and operated by a union* with all den tists working on a salary and with limitation of benefits determined by the availability of funds; (b) a cooperative program for individual subscrib ers that is operated on a cost basis* with all den tists working on a salary and with no limitation of benefits; and (c) an insurance type of program that is for sale to groups or individuals that utilize existing facilities of private practice. (76:13) There are three types of dental coverage: (1) sal aried professional employees* closed panel or captive group; (2) capitation paid at an agreed amount per patient (3) fee-for-service, rendered on an individual basis (45:1). There have been various plans developed success fully* a few of which we will mention here. Klein mentions a successful prepayment dental care plan operating in the America Cast Iron Pipe Company. This Industry has a medical car© plan financed by the employer. About 2*000 employees and their de pendents* or a total of 8*000 persons* were eligible in 1944 for relatively oomplete medical cere* in cluding physicians* clinic, home and hospital, hos pitalization and comprehensive dental care . . . (56:342) The Public Health Service of the United States Government, Division of Dental Resources Indicates that in the entire field of health services few issues have been more persistently raised or less satis factorily met than that of the failure of the majority of Americans to secure the dental car© they need. (27:1) 117 The medical plan of the St. Louis Labor Health Institute, which was founded in 1945 by the Local Team* stars' Union a s a prepaid hospitalization plan for members only, added a dental plan in 1946. This was expanded to include dependents in 1947 (27:1). Among many interesting findings of the St. Louis study were the forceful feelings of many of the patients who either were strongly for or against the dental service. The study indicated: The Labor Health Institute, through its dental cllnlo, had undoubtedly brought a comprehensive program of dental care to large numbers of union members and their families who otherwise might never have had such service. (27:36) A very active dental program on the West Coast is that provided by the International Longshoremen's and Warehousemen's Union and the Pacific Maritime Association jointly under the guidance of the administrator, Mrs. Goldie Krantz. What was begun as a one-year pilot program in .1954 has now become a permanently operating plan (35)® Some 7,822 children received dental service during the first year of the program. This well-documented study re ported that the dental program gave service only to chil dren up to fifteen years of age who were dependent for support on a worker eligible for International Longshore men' s and Warehousemen's Union and Pacific Maritime Asso ciation Welfare Fund benefits. In the San Francisco Bay area members may choose between service under the northern 118 California dental aaaociation service plan or under Dr. Naismith and the Jan Group Plan. In southern California, Oregon, and Washington the program is tied In with a den tal service group plan which operates similarly to that of the Bay area (107). An insurance company indemnity approach to the den tal problem has taken the form of a comprehensive prepay ment indemnity plan underwritten by the Continental Cas ualty Company as of 1960 (86). The Casualty Company indi cates that this Is the first plan of this kind in opera tion in the United States. The cost for the plan is paid by the private dental supply company for employees and dependents. There Is a #26.00 deductible per person the first year and #10.00 maintenance deductible for subse quent years. There Is a co-insurance factor of 80 per cent or 20 per cent each year per person with a maximum cover age of #500 per year per family. Evaluation of Health Insurance Plana General evaluation With an approach involving the background, types of plans, trends, and specialized areas, perhaps there must be an evaluation of the mass of data in terms of its usefulness and kindred relationship. Although we have spoken of compulsory social insurance, this was don© in an 119 attempt to show a related area rather than to develop an lntanaive Investigation Into the social Insurance program. Consequently, the following remarks will be in the main concerned with voluntary health insurance. Coldmann stated: Voluntary medical care insurance in the United States has grown from humble beginnings in a few communities to a social movement extending through out the country . . . Although it dates back to the seeond half of the 19th century, it did not enter the major phase of its development until the third decade of the 20th century. (49:223) Goldmann declared "that it must be freely admitted that scientific evaluation of the voluntary medical car© Insurance leaves much room for improvement." (49:224) Voluntary medical care Insurance, ho believes, has failed to reach many families and individuals with thin pay en velopes and meager bank accounts, such as low-paid wag© earners in industry, agriculture and domestic service, self-employed persons with limited resources, and farm families with little liquid assets. Furthermore, it cov ers very few senior citizens* Within the plans themselves frequent eligibility for benefits is restricted by exclu sion of pre-existing conditions or use of waiting periods, exclusion of specific diseases, and extensive use of day or dollar limits (49). One school of thought maintains that medical In surance is analagous to fire and automobile insurance and 120 should be designed to protect the Insured Against certain unforeseeable crises which occur relatively infrequently and irregularly, and which create certain economic hard ships. Another school of thought maintains that the method of insurance oan and should be employed to finance organized programs of medical care, providing for the widest possible range of those personal health services which are necessary to maintain health, prevent disease, diagnose and treat illness, and restore health, promote functional ability, and earning capacity, (49:230) In order to evaluate the types of plans available, one must consider such factors as the scope of the benefits, occupation of the em ployees, sex of the employees, ages of the employ ees, eaiming of the employees, size of the group to be included in the health insurance, and number of employees who have dependents, (92:16) Coats generally are determined by premium taxes, administrative costs, claims handling and investigation expenses, commissions and acquisition expenses, contin gency reserves, risk charges, and profit (92:22). Useful in making such evaluation is a specification letter con tained in Part A of the foundation study (92), This in strument, when used in an annual review of the health in surance plan, helps to reveal (1) premium received by the insuranoe company from the fund covering the policy year! (2) the retention of the insurance company, including the dollar amount of each item of retentions (3) the amount of 121 actual claim payments to the Insured members and their dependents during the policy year; and (4) the amount of any reserves for outstanding claims (92:40)* Principles of health insurance The Assembly Interim Committee report of the state of California has listed a group of principles that assist in establishing a standard of medical care which can servo as a steady guidepost to those considering or evaluating medical care coverage* These principles are as follows: A* The basic principle of group (insurance) should be honored* B, Where possible employe© choice of basically different methods of providing medical care serv ices should be provided* C* When one company or organization is to be selected from among several offering similar cover- age, competitive bidding should determine the one selected* D. An employee1s right to enroll should be a condition of his employment, just as hla right to vacation credits, sick leave and membership in the retirement system* E* The program should b© designated to allow the highest possible share of the money spent to go for medical care and the least possible for claims form filling and processing* P* To the extent that clalma forms are neces sary to the administration of an employee1s rights to medical care or medical care benefits, these should be administered by the departmental person nel offices In a manner similar to those for other employee benefits* 122 G. No need form nor means test should he per mitted to determine the level of benefits an em ployee can receive. H* Any employee* s health care program should take into consideration the needs of the total family. I. The importance of the program of medical and hospital care after retirement should receive the most careful consideration. J. Continuity of coverage should be maintained when serious illness or Injury of an employee may involve a prolonged but not permanent period of disability. K. There should be an adequate appeals proce dure as a check against the arbitrary or unjust denial of benefits. L. A state-sponsored medical care program for state employees should Include provisions for evaluating the quality of medical care which is being bought and the extent to which the types of benefits bought meet the employee* s health care needs. U. Since many state employees are carrying health Insurance plans now at their own expense, care should be taken to avoid interruption of cover age during the initial establishment of a state- sponsored program. The committee does not believe the automatic blanketing in of existing plans with sizable membership by a "grandfather olause" is necessary or advisable. N. Consideration should be given to the sug gestion that any medical care lnsuranoe program for the employees of the State should contain a deductible provision to the end that the cost of the first and possibly the second office or home call of the doctor for medical service incurred for illness as distinguished from accidents shall be borne by the employee rather than by the medi cal health program. (20:60-61) Parts B and C of Study No. 1 of the Foundation on Employee Health, Medical Care and Welfare indicate, in 123 examining the Indemnity or service type programs, the or ganisation would look at the specific needs of the member ship and the topical situation (94)* The check lists In Farts B and C referenced above are most comprehensive and are highly recommended to those considering these various types of plans. As an example, the question may arise as to what the status is of hospital beds In the local area. Are the available hospital beds mostly of the ward or private room type? Depending on the answer, the plan adopted would want to provide coverage most favorable to local conditions. In further thought, Is the plan con sidered experience or community rated? This may depend on the composition of the surrounding community and the general composition of the group to be Insured. Falk indicated that despite the present diversity In benefits and correspondingly In costa, "there has been a plainly evident long-range world trend for benefits to become progressively more and more comprehensive." (46: 553) "Diversity in the number and scope of benefits," he believes, "must be taken into aooount in evaluating the costs and adequacy of financing." Falk listed five propo sitions which he thought to be generally acceptable: (1) The financial resouroes of the Insurance system should make fair payment to those who pro vide services. 124 (2) The finances should support and progres sively encourage high quality of care. (3) The method of financing should assure financial stability and flexibility* (4) The method of financing should adjust to oosts of ability-to-pay. (5) The financial arrangements should be eco nomical and efficient. (46:553-54) Clark also set forth criteria for evaluating pre payment plans, as follows: 1. The extent to which a prepayment plan makes available to those it serves the whole range of scientific medicine for prevention of dis ease and for treatment of all types of illness and injury. 2. The proportion of the population of its area, local, state, or national as the case may be, covered by the plan; cost in relation to the ability to pay; restrictions on enrollment imposed by actuarial considerations; Income level; area; conditions of employment; means of securing enrollment; and means of collect ing premiums. 3. The degree to which a plan makes use of and encourage a the development of a high quality of medical care for its subscribers (standard® of personnel and facilities, organization of 125 services, emphasis on prevention of disease# and promotion of health education)* 4* The degree to which freedom and willingness to experiment with methods of payment and opera tion are encouraged in the plan* 5. The degree to which a plan succeeds in arrang ing amounts and methods of payment and con ditions of participation that are satisfactory to physicians, hospitals, and others serving the plan’s subscribers® 6® The extent to which efficiency and economy In the operation of a plan are achieved and en couraged by its basic policies and its admin- i istrative techniques* 7. The extent to which the individuals or board who carry the ultimate responsibility for a plan represent the interests of those en titled to service, and those who are paying the costs, as well as of the physicians, hos pitals, or others who are providing the serv ices (39:207-217). In Wade1s investigation of absenteeism in a number of Esso Company plants, his conclusion was that "the fewer the visits to the medical department, the higher the cost of aiek absenteeism*” (69:604) Wade listed fch© following 126 factors that he believed Influenced sick absenteeism: "A. Intrinsic (i.e., within the worker) 1* Health status (a) Physical (b) Emotional (c) Social 2* Adjustment to the job (a) Innate ability or intelligence (b) Education and/or training (o) Proper assignment ”B* Extrinsic (i.e., the worker1s environment) 1® Biological environment (a) Supervisor (b) Associates on the job (c) Family (d) Union officers, olub associates, church associates, etc* 2. Physical environment (a) Health hazards on and off the job (b) Housing and housekeeping both on and off the job s t G« Economic climate 1. Salary and benefit programs 2. Availability and us© of medical services*5 1 (45:604-605) Quality control of health plans Perhaps a separate word should be mentioned about the Important subject of quality control* Referred to earlier In the principles set out by the interim committee (20), quality control is a factor to be moat seriously 127 reckoned with in all types of plans which the literature has considered* Mayers has put it this way: The person who Is entioed by a beautifully-wrapped luscious apple is equally repulsed by a bruised, scabby, worm-ridden one* Consumers lack sophisti cation and knowledge to recognise and evaluate medical care. Hospitals generally meet minimum standards but consumers rarely are aware of the rates of cross infection, ghost surgery, missed diagnosis or Inadequate and Incompetent missing services. Medical care plans must consider these hazards to patients and provide incentives or act as a catalyst to Insure that hospitals and their medical staffs not only police themselves but con stantly strive to find the best and technically correct service. Any medical care program which omits quality checks is either an Insurance or banking operation and should be so designated. (116) In another way. Medical care is complex as well as costly and co ordination of services is as Important as their prepayments* Many physicians have been concerned over the comparative lack of emphasis upon the quality of medical benefits, in contrast to the universal attention to their cost and amount. (80:7) In a general sense, speaking of another area of relationship. Shanks stated, One of the basic needs, and probably the one which the success of voluntary health Insurance depends more than any other, Is that there be effective coopera tion in the public Interest between the Insurance agencies and the medical profession and those who furnish the necessary services* (64:120) Shanks stressed the great need for educational work in all areas of health Insurance. Education of subscribers regarding benefits of health plana.— An attempt to educate has boon made by in surance companies, nonprofit plans, and such agencies, and 128 by the American Medical Association. In the little pam phlet, Let1a Use Not Abuge, It is pointed out that insur ance does not create any money, and perhaps can best serve the subscriber by paying the large bills rather than the small ones. Also it points out why your doctor may not recommend hospitalization in treating the patient ade quately and yet without useless costs. This must, however, be recognized as one point of view in treatment not gener ally linked with the group type practice (81). Voluntary plans tend not to cover those segments of the community most in need of health insurance (83:36). Many such voluntary plans have no conversion privileges, no dependent coverages, or continuation in cases of job loss or retirement. "The exclusions and limitations under most existing plans are relatively numerous and some of the most Important kinda of treatments are not covered." (83:36-7) Specifically, exclusions are many, including visits to the doctor, out-patient treatment, early diag nosis, preventive checks, need for hospitalization before many of the laboratory expenses can be paid, continuation of benefits until treatment is completed, dental care, and psychiatric care. As Baisden and Hutchinson stated, "Even in the case of procedures which are oovered by the plans, there la often no assurance that the payments under the plans will ba sufficient to pay the bill in full." (83:37) 129 Aa an adjunct to the above generalisation regard ing the literature, the following Is more specific treat ment of evaluation relative to the various types of plans set forth earlier. Benefit provisions.— The nonprofit hospital and physician1s service type plans which are well represented by Blue Cross and Blue Shield offer certain advantages® According to Weinermann, they pose no great administrative problems, permit wide choice of individual physicians and hospitals . . . Such plans are nonprofit and can return the greatest part of the premium in the form of bene fits. (70:706) Weinermann went on to say that preventive and early diag nostic services and care for chronic illness must be ex cluded from these plans as now constructed. The use of Individual doctors and hospitals makes it difficult to control the standards of service. Another difficulty Is that relations with industrial hygiene and safety programs are not easily developed* It Is also pointed out by this same author that there Is a definite limitation of service benefits of in-hospital care for relative short period© of time. Goldmann in a discussion on the nonprofit service types of plans declared that they were generally tax ex empt, being treated like charitable institutions In this respect (15). Moreover, they are exempt from federal in 130 come taxes for the same reason* Goldmann Indicated, how ever, that such plane are group prepayment type plans which for the Individual avoid the shock of large hospital expenses and are of financial benefit to the hospital ad ministration seeking a stable souroe of lnoome. However, he also states that such plans are not low Income group plans; they only cover part of the health expenses and are not preventive or curative in nature; there is no voice by the subscriber In such plans; the overhead Is high; and such benefits are usually not catastrophic in their coverage* Standards under such plans generally de pend on quality control by requiring that only licensed physicians join. However, in many cases this perhaps has not proven effective. Such plans also many times exclude pre-existing conditions, are designed for employed people in the main, and have certain income and age limitations* Dickerson declared that, even though the nonprofit service type of plan is described as having community sponsorship, in fact it is usually dominated by the hos pitals, and the community has little to say about It (4). Furthermore, the nonprofit feature is practically a fic tion; by adjusting the rate paid to member hospitals, the operation can be made to appear profitable or unprofitable, as its sponsors desire* On the other side of the ledger, it is pointed out, there are no premiums and other 131 Insurance taxes and wholesale rates can be applied to hospital servloe through contracts. Dickerson stated that service type benefits are decreasing in favor of in demnity type plans because over-utilization and high costs are taking their toll. Fee schedules frequently used in nonprofit type plans (and in others, as well) have tended to create a situation in which the maximum fee limit is considered to be the minimum charge. When average fee schedules are computed and when charges are established at that average level, the average no longer exists and fee readjustments have to b© mad© upward in order to es tablish a new average (4). An evaluation by Milllman of the nation-wide plan described previously (effective July, 1960) indicated that "studies by the Blue Gross association covering the period of from 1950 to 1958 show an average annual increase in average number of hospital days per subscriber por year of 2 per cent." (24:7) What is more, one large Blue Shield plan showed an 11 per cent annual increase in utilization, possibly indicating a problem of over-utilization for this type of plan that has not yet been successfully conquered. The indemnity type plana usually handled by com mercial insurance companies comprise the moat prevalent type of coverage today, but each plan has its peculiar advantages and limitations® In the major medical area 132 most plans have three identifying features: (1) the de ductibles, (2) co-insurance, and (3) a high maximum bene fit, Pollack declared: In many respects the history of major medical in surance has been a general retreat from the original high standard set by the ELFUN plan (General Motors) which did not Impose any maximum time limit, in cluded psychiatric care, and covered retired mem bers and their dependents, (61:1) Pollack added: Perhaps the greatest retreat In major medical In surance is the prevalent two year limit on bene fits. The danger of financial ruin is not so much from an acute flare-up of expenses In a short time but from long term illnesses. (61:325) The time limit, Pollack said, is likely to inter vene before the large maximum benefits that are featured can be paid. "The deductible clause has a strong Influence in reducing costs by eliminating and inhibiting claims." (61:330) On the other hand, co-insurance is largely in effective, for, as Pollack explains, co-lnaurance "assumes a sophistication in medical matters that few patients possess," (61:331) The American Federation of Labor and the Congress of Industrial Organization have viewed the major medical area rather negatively. To them, "Major medical expenses insurance is neither a constructive basis for a national health program nor an adequate answer to the needs for comprehensive prepaid health services." (78:3) They 135 point out aa weaknesses the facts that there is no help for the legion of small bills; that preventive oare is not furnished; that the plan negotiates cash rather than services, which in turn raises the doctor’s fee; and that it generally inflates the entire medical cost picture# The Group Health Association raised the question of whether it is more important to protect families from the infrequent but high coat of catastrophic illnesses or to assist with early diagnosis of treatment by providing first dollar coverage or comprehensive coverage. (97:5) Comprehensive plans of the major medical type, it Is pointed out, are similar in most respects to the supple mentary major medical plan except that, as the name im plies, they have considerably more first-dollar coverage together with limited or eliminated co-inauranc© and/or deductibles. Again, questions were faced: Does the provision of comprehensive health bene fits by the collective-bargaining health program encourage families to seek medical care that otherwise might go by default? Do comprehensive benefits encourage unnecessary utilization of medical personnel and facilities, and thereby in crease the cost of the health insurance? In brief, do the triple abuses of overpresorlbing, overcharging, and overutilization, simply because the patient has insurance, tend to Inflate the cost of medical care? (97:5) In this connection, Weinermann stated, The commercial group insurance contracts for cash benefits have the important advantage of being flexible, applicable In design to any locality and 134 capable of satisfying desires of large Industries for uniform coverage of widely scattered workers. (68:705) However, benefits are paid In cash, not health services. For this reason, Weinermann declared: These policies fall to promote the maintenance of good health on the Job or the early detection and control of incipient illness. . . . Dollar payments are, moreover, often below the actual costs to the worker and no provision is made to improve the quality of medical care or exercise adequate qual ity control. (68:705) Aa can be seen, many of the criticisms of the non profit hospital and physician service plans also apply to the Indemnity type of plans in that such plans fall to make allowances for preventive, curative, or diagnostic serv ices in addition to limitations in areas where common med ical and surgical expenses may be expected. Currently group practice plans seem to hold the greatest promise for the greatest number of average Ameri cans. Three areas of coverage which are lacking in other types of health insurance are present here: (1) preventive care, (2) diagnostic coverage, and (3) curative or reha bilitative (long term) care. Clark and Ewing indicated that in the Seaman Group Clinic Plan, in the case of the average employee, "costs to the Bank tend to decline over the years once he (the patient) gets into the care of the clinic." (40:120) Mayers, in a survey of the workers' viewpoints regarding health Insurance, reported such 135 comments as: Our medical services must arrange for all doctors, nurses, and other people to care for us; hospital, clinic and home and office care are all needed, necessary, and equally Important; the administra tors, the clerk, clinical doctors, and others must all he interested In treatment and rehabilitation of every patient as well as teaching him to know hoe to prevent illness and use the available medi cal services. (57:130) Weinermann listed the following as the fundamental principles characteristic of the group health plan: (1) Prepayment, based on family coverage and comprehensive service. (2) Group medical practice of physicians and auxiliary health workers. (3) Medical-hospltal centers, coordinated in regional net works where possible. (4) The economics of prevention. (5) Democratic control of policy. (121) In a report issued by the National Health Assembly, it was stated: Voluntary prepayment group health insurance plana embodying group practice and comprehensive service, offer to their members the best of mode and medi cal care . . . Such plans furthermore are the beat available means at this time of bringing about dis tribution of medioal care, particularly in rural areaa. (18:221) Dally and Morehead described the organization and quality control feature of the Health Insurance Plan of Greater New York, a group practice plan known as H.I.P.: The Board of Directors, the Medical Control Board, the Medical Department of H.I.P., and the 136 medical groups together have the obligation of seeing that the insured subscriber population receives medical care of high standards ... This is in contrast to the private insurance companies and many Blue Shield plans which pay cash Indemnities for specific servloesv but as sume no responsibility for the quality of medical oare provided. The Board of Directors of H.I.P. composed of community leaders, has twice authorized studies of the quality of medical care provided by the medical groups. . . . In line with this policy It was another decision that the evaluation of quality should be carried out by recognized spe cialists in their respective fields and should be made objectively from a review of clinical records and case discussions. (43:848-49) Provision was made under the H.I.P. plan for evaluation to “Identify clearly those physicians who are providing good, fair, and poor medical care.” (43:854) This would tend to Indicate that good quality controls cam be established and maintained. And In this area of quality control the group practice type of plan would seem to have the great est opportunity for success to date. Weinermann believed that the provision of compre hensive services, particularly through group practice services in medical centers, "can afford the individual employee and his family more in the way of general health protection than is possible under the simple Insurance plan." (70:706) Such a group practice plan "emphasizes prevention, and early diagnosis which is probably less costly over the long haul, and provides a healthier em ployee and a less absent worker." Weinermann believed that "preventive and therapeutic services are, or should 137 be, inseparable*" (70:709) He warned that health and welfare funds oan be spent wastefully or with only par tial effectiveness when the principle of preventive medi cine is forgotten* The basic elements of a good health care plan should be that it is (a) nonprofit financing, (b) service rather than cash benefits, (c) coordination of preventive and curative services, (d) comprehen sive scope of medical care, (e) family coverage, (f) coordination of professional personnel in modern medical facilities, and lastly a consumer voice in the policy making of the plan* (70:710) Regarding group Insurance plans Goldmann declared that group practice prepayment plans have convincingly demonstrated that "fairly complete medical care of high quality can be financed through prepayments at reasonable costs,1 1 but that adequate facilities must be supplied and professional services organized on the basis of group practice (5:183)* Such plans usually provide for contin uing car© of a preventive and curative nature, for good quality control, for broad coverages, for specialists and team auxiliary personnel, and for satisfactory doctor1s inooraej moreover, they encourage research, reach low in come groups, and have democratic control. They have yet to provide for adequate psychiatric care. Some plans which do not have their own hospital have experienced dif ficulty in making satisfactory arrangements with local hospitals* Consistent quality controls are needed to 138 guard against a tendency for less personal doctor-patient relationships, and the development of administrative prob lems within the doctor group itself. The foundation type of controls described earlier under group practice plans Is too new as yet for valid evaluation. There seems to be great promise in such plans If the medical profession will exercise consistent quality control, support such a program locally, and make every sincere effort to lower their charges from the maximum as has been indicated in the operation of the plana. The foundation type plan does not adequately cover care away from the local area, and this is yet a weakness of most group practice plans* However, there can develop, no doubt, a method of reciprocity that could conceivably be practicable. The hospital coverage is best provided by nonprof it service type plans or commercial carrier plana and in this regard the problems of quality control, over-utiliza tion, over-prescribing, and over-charging as well as dem ocratic control are still present. However, a foundation plan acting as a catalyst, as It does in the medical and surgical service field, no doubt could aid in bringing many of the hospital problems into sharp focus and stimu late the attention of the medical profession. 139 Dental Insurance coverage In the area of dentistry there seems to be a keen awareness at the national level of the prepaid dental problem. At least In the literature* It was Indicated that the dental profession has every Intention of working with available groups to assist In solving the challenge of dental care for large groups of employees and other segments of the population. Friedrich has set forth some principles for determining the acceptability of dental care plans: (1) The plan should be developed, maintained and promoted to the public with the advice of au thorised representatives of the local and state dental societies. (2) The plan should encourage the maintenance of a high standard of dental treatment. (3) If the plan provides direct service bene fits it should be operated on a not-for-profit basis. (4) The promotional standards under which the prepayment plan is developed must meet the require ments of the principles of ethics of the American Dental Association and the codes of ethics of the state and local dental societies. (5) The limitation of benefits available under the plan must be clearly described. (6) The area of responsibility Involved In ad ministration of the plan must be recognized and properly evaluated. (7) The basic policies and operation of the plan should be efficient and economical and should provide freedom to experiment with methods of pay ment by beneficiaries. 140 (8) The administration of the professional phase of the plan should be entirely without the controls of the professional personnel* Profes sional standards and treatment should not be con structed by non-dental administrators* (a) Thus the method of authorisation of dental care under a prepayment plan should prevent any interference with the dentist-patient relationship or the professional Judgment and decision of the dentist* (b) Thus the determination of the coat of dental care should be based upon accu rate* statistical data which reflects fees in the area in whioh the plan operates* Fee schedules should be de veloped with the advice and assistance of the dental society in order that they may (a) make possible equality of treatment in providing benefits and the plans* and (b) be adjusted in ac cordance with changes in the economic level and at reasonable intervals* (c) Thus the patient must have freedom of choice within the agreed limitations of the plan, choice of the dentist to whom he may wish to apply for treatment* Similarly* the dentist* within the same limitations* must have the right to ac cept patients who apply for treatment* (9) The financial reserves of the plan should be adequate to assure continuity of the program. (10) All ethical, qualified dentists, must be eligible to participate, within the agreed limitations of the plan. (11) The plan should make adequate provisions for the adjustment of any complaints that may arise in the dentist-patient relationship. (12) The plan should provide for the maximum us© of existing facilities. (13) The plan should include a program of dental health education for its beneficiaries. (47:3-4) 141 With Intelligent guidance from the American Dental Association and the state and local dental societies meet ing the demand and working with the strong current trend for prepaid dental care plans, the future can be quite bright for adequate and comprehensive dental care. Other References There are many good references in specific areas, A bird1s-eye view of some 100 plans is given in The Time Saver for Accident and Health Insurance (7), The current edition of Best* s Accident and Health Analysis also gives brief analyses of policies offered by numerous companies (2) . The federal government publishes statistics con cerning health and welfare plans; publications of several government agencies are kept under constant revision. Some of these will be named below. Employee Benefit Plans Committee on Education and Labor, House of Representatives, lists state laws regulat ing and pertaining to employee welfare trust funds in col lective bargaining plans for health insurance. Also, selected laws are listed at the state level regulating group employee health plans and benefit trusts. There are also significant legislative proposals, in bill form, deal ing with health and welfare funds set forth In appropriate 142 sections of the Taft-Hartley Act. There Is, In addition, some legislative history of existing federal authority and in this area serves as good background material. Digest of 100 Selected Health and Insurance Plana Under Collective Bargaining (1958), a publication of the United States Department of Labor, gives a breakdown of health plans in various Industries and Is revised each year (29). The Veterans Administration, Department of Medi cine and Surgery, publishes a Guide for Charges for Medi cal and Ancillary Services of national scope, which pro vides a criterion for fees and charges for medical and dental services (110). Health and Insurance Plana Under Collective Bargaining Accident and Sickness Benefits Is a companion publication; together, these two reports give a comprehensive up-to-date picture of the health, welfare and accident field (31)® Dorothy Dahl's bibliography, published by Prince ton University in 1944, contains a rather comprehensive resume of source materials in the sickness and accident area (88). A group plan In operation at Trinity Hospital, Little Rock, Arkansas, was studied by Klem, Hollingsworth, and Miser in 1941-42, for the Social Security Administra tion of the government. The report of the study Is 145 somewhat barren of conclusions, due to wartime manpower restrictions (16), The Health Insurance Council, an organisation of eight insurance associations, represents 700 major Insur ance companies which claim to issue 90 per cent of all health and accident policies written (101). The council's Health Insurance Institute issues a wealth of information in the field of health and accident insurance. The Group Health Association of America (GHAA) is an association of prepaid group health plans whose members ar© working to bring modern medical care within reach of the average consumer. About twenty-five active health plans operative throughout the country are represented. This organization was formed in 1959 and is expected to supply an increasing wealth of materials on health insur ance (97). The Relative Valvi© Study, Second Editions formu lated by the Committee on Pees of the Commission of Medical Services of the California Medical Association and adopted by its council in 1957, has been mentioned as the pioneer study for the Implementation of group practice plans which specify fee charges. It has been used extensively through out the United States as an authoritative reference for establishing fee schedules and relative charges for medical and surgical services (85)« 144 The American Association of School Administrators joined with the Research Division of the National Educa tional Association in issuing Educational Research Circu lar No. 5 which surveyed health plans adopted by teachers' associations and school districts throughout the nation (74). The state of California Is now conducting a spe cial governor's committee study of medical aid and health Insurance, a nation-wide survey to be reported on in Jan uary (1961). The purpose is to ascertain the type of plan or plans which should be considered for the benefit of state employees. The State of California Personnel Board in 1959 made a special survey of health and welfare benefits in California's local governmental agencies (115). The American Dental Association has been particu larly active for several years in encouraging the develop ment of health Insurance. The Journal of the American Dental Association has published numerous articles, some of which have been cited here (77). The industrial relations departments of the Univer sity of California at Los Angeles and California Institute of Technology locally have gathered extensive material on health insurance plans; those interested are encouraged to explore their shelves (111). 145 Chapter Summary This chapter has traced the development of health Insurance and welfare plans In the United States* In Its early period, from 1850 to 1910, certain precedents were established. These were (1) the assumption by industry of responsibility for providing workers with medical care in areas having insufficient medical facilities, (2) the use of the procedure of prepayment as a method of financ ing part or all of the program, and (3) the use of payroll deductions as a means of collecting the workers' share of prepayments (1:1). The period from 1910 to 1930 was characterized by the emergence of social insurance as an important compul sory insurance factor in the United States. In these two decades, group insurance emerged as an accepted modus operand! in the life insurance field. Significant devel opments were as follows: (1) The first consumers' coopera tive was formed for the specific purpose of providing prepaid medical care through group practice. (2) The Ross- Loos Clinic, a physicians cooperative, set up a group practice prepayment plan for a group of employed people and their dependents in Los Angeles where the shortage of physicians was not a factor (1:9). 146 The period from 1930 to 1951 was a period of great activity In developing health Insurance plans by social legislation, by collective bargaining, and by wage stabilization during the World War II years when employers were forced to look to fringe benefit areas to attract and hold valued personnel. The discussion of types of health plans Included enumeration of nonprofit hospital and physicians’ pro grams, the indemnity coverage, and the group practice type of plan. Brief mention was made of Individual commercial policies available. The growth of federal legislation in the United States was traced, showing its ultimate culmination in the federal employees health plans of July, I960. Social Insurance as a factor In the development of health Insurance plans was disoussed, with particular emphasis on disability and other forms of compensation and of workmen’s compensation Insurance. In the development of health plans, school dis tricts and other governmental bodies have been slow to dis play an awareness of the value of the fringe benefits. The Importance of this type of fringe benefit in school districts was discussed from the standpoint of the indi vidual worker and of the total educational program. As an aspect of social welfare, health. Insurance 147 was seen to have reached a stage of explosive growth and development. Recent trends were seen to favor all types of health Insurance plans, with particular emphasis on the major medical and group practice types. Graphs and charts Illustrated the tremendous growth In all types of health Insurance plans In all sections of the United States® Medical care for the aged as covered in the Cana dian plan was mentioned as It was developed experimentally through government auspices. In this country, medical care for the aged Is at the moment one of the nation'a most discussed political issues, several proposals having been placed before Congress. Most plans so far proposed advocate working through the states on some sort of matchlng-fund basis. Dental health insurance programs have received ex tensive support as integrated with more genorall&ed health plans incorporated as critical features of collective bar gaining programs. It seems likely, at the present time that dental care may eventually become completely inte grated with the hospital, surgical, medical benefits of health insurance coverage. The first dental insurance program offered on an Indemnity basis is now In an experi mental stage In New York City. Many Insurance experts, as well as union, government and management leaders, are 148 ■watching closely Its development. Methods for the evaluation of health care programs have only recently been developed. The state of Califor nia Is currently studying the various health plans avail able, as a preliminary step in establishing a practicable health plan for state employees. A governor's committee report is expected momentarily; this Is expected to form the basis for similar studies with other groups of school and government employees. The Assembly Interim Committee (State of Califor nia) has listed a group of principles to assist in estab lishing standards of medical care. These criteria were formulated to serve as guideposts to those considering the evaluation of medical care coverage. The principles were enumerated in this chapter. A discussion of the various types of health plans, their advantages and disadvantages, was also developed. CHAPTER IV INITIATION OP A HEALTH PLAN Introduction A number of elements are necessary to the success ful Initiation and continuance of a health plan for a school district or other agency* Not the least of these is the method by which the health plan is instituted* As in building a home, this is the foundation upon which the entire structure rests; it must be strong and secure if the needs and desires of the users are to be fulfilled* In Initiating a health plan, the first step is a determination of group and individual needs. One must ask: What specifically are the needs of the group? What are the desires of the group In relation to a health plan? Once the needs and desires have been determined, how can a health plan best be developed to meet them? Answers to the above questions were sought by means of a selective questionnaire survey, case study, confer ence, and personal Interview* The instrument devised for the sampling was described in Chapter II and appears in the Appendices as Appendix A* 149 150 As Indicated in Chapter III, "Related Literature," the need and desire for fringe benefits in the health plan area has been well established in industry. School dis tricts as one of many governmental type bodies are also becoming more sensitive to the competition for well quali fied employees and aware of the desire for the high cali ber employee to seek employment where substantial fringe benefits are offered In addition to an attractive wage. In this chapter items will be developed which have boon found critical to Initiating a good health plan. It is conceded that not all procedures or organizational pat- terns will work equally well for each agency. By reason of topical conditions there may be unique items not cov ered in this study that would be important. Also, as was pointed out in the Introductory chapter, the health field is developing very rapidly, and there will be other meth ods or approaches that may prove equally effective in future deliberations. Plans and Procedures A preponderance of those health plans studied and replies received from the questionnaire Indicated that a health plan consultant was not employed In the selection of a health plan® The results of the study show that a consultant should be selected by a committee of employe©a 151 and management (administration) who have decided by an agreed group of selected questions to rate and probe the field of available consultants. By Individual interview it was determined that the county of Los Angeles In a re cent probe composed a group of questions which might well be apropos of a representative set of questions for any interested and analytical group. As to the type of consultant used, the data ana lyzed indicates that the consultants employed were either independent brokers or local brokers. No standards were set out (see definitions of terms in Chapter I) in the questionnaire replies to indicate what qualifications con stituted an independent consultant* Of the respondents reporting using a consultant, one indicated he did so on a flat fee basis. None Included a percentage of the cost of the health plan for the first year or more than one yoar. Committee selection The returns from the queries sent to school dis tricts and city and county organizations Indicated that 75 per oent of those selecting health plans did so by com mittees. There were 25 per cent of those who used commit tee a that Indicated the committee organized to select a health plan was composed of joint board and management (administration)« 152 Using a method of polling potential subscribers as to their preferences in certain areas of health cover age was practiced by 47 per cent of those reporting, A sampling* as a result of the questionnaire* Indicated that 90 per cent of those adopting a health plan did study some other plans and that the number of plans studied ranged from four to forty-two. How were committees selected? There was no sig nificant trend in the replies to the questionnaires, ex cept that whore employee committees were used* there were In almost 40 per cent of the cases provisions for employe© elections to determine those who were to serve on the steering committee. In some cases a steering committee selected members who formed the study committee. Returns from the questionnaire reported that in 52 per cent of the cases both employee and management (administration) had representation on the selection committees. The ratio of management (administration) to employees on the committees varied according to the size of the health group. No re sponse to the questionnaires showed fewer than 10 per cent of the committee being composed of management (administra tion) J In some cases administrative personnel on the com mittee ran as high as 80 per cent* Committee size ranged from a span of three to five to a maximum of twenty-fivej the mod© between eight and 153 ten# Nineteen per cent of the respondents Indicated that little or no uae was made of subcommittees within the main committee set up to study various phases of available health plans. The results of the selection committees1 over-all study were submitted to the governing body for approval in 80 per cent of the agencies reporting either affirmatively or negatively to the question. The govern ing board (board of directors, board of supervisors, or others) accepted the majority of recommendations of the selection committee in over 90 per cent of the plans re ported. Pour questionnaires did not report this question as applicable to their plan® The bid When specifications for a health plan have been tentatively decided or agreed upon, it must then be de cided how and where to find a plan which meets the desired elements# Should one go to bid on his own specifications for a health plan? The responses to the questionnaire were equally divided in answer to this question. Much of the balance of the response was due to "brand” or "pack aged" plans being accepted as compromise specifications# Just over half (52 per cent) indicated that they used a "brand" plan as standard specifications. The trend seemed to indicate that If a group wont to bid on its own sped- 154 fications, It would most certainly do so again. Slightly over 70 per cent were satisfied with bidding out. One- third of the plans sampled did not provide alternates In their bids. The data studied indicated specific prefer ence to local bidders is not practiced unless some unusual local condition exists. Self insurance In instituting a health plan In larger groups the question of self Insurance is one to ponder. Seventeen per cent of those sampled Indicated thoy considered self insurance. Of those that did, the sampling indicated that such items as saving of premium taxes; payment into the fund of so much per person, or per hour per person; how the trusteeship was to be formed; calculation of loss ratios; payment of the trusteeship for operation; use of an executor; and ©mount of administrative expenses wore not considered In even one instance. It is suggested that those further interested in self insurance study bibliography reference 93 which gives an excellent summa tion of the topic. One hundred per cent of those who felt that the question wa3 applicable to their plan Indicated that they were satisfied with the procedures used In selection of the health plan that they had. However, by the same token 155 over 50 per cent of the replies Indicated that they had taken a "brand" plan and not one reply indicated that a group practice plan was in effect. Responses in fewer than 9 per cent of twenty-five agencies reporting indicated that the employee had a choice in selecting a plan from more than one plan avail able* A preponderance of plans sampled were selected on a payroll deduction basis. This was indicated to be an expeditious way of extracting payment where the entire organizational group is eligible for health plan(s). For those agencies that selected more than one available health plan, which were fewer than 9 per cent, all indicat ed that they would do so again. However, one-half of those responding said there were problems connected with the administration of more than one plan, especially where one carrier may be superimposed on the other to form a unified plan* Cost Slightly over 70 per cent of the respondents indi cated that they received a firm price on their bids. How ever, there was nothing in the question asked to indicate whether the firm price was adjusted after the bid was awarded by reason of sex, age, or percentage participation. The rates that are bid in a health plan hold firm for a 156 specified period of time. The results of the questionnaire showed that 71 per cent of those replying Indicated that the period of one year was the maximum period of time that a specific rate would hold firm without the right of change by the carrier. This question did not take into account the possibility that the policy could be cancelled on thirty-days notice if rate increases were not accepted. About 25 per cent of the responses showed that the rates in the plan would hold for a two-year period. One respond ent indicated a three-year period. The majority (72 per cent) of respondents indicate ®d that they used the assistance of a broker, or company representative, to determine the selection of their health plan. No question was asked to probe the opinions of the respondents regarding the consultant bias or specialist qualification. There was little evidence that the re spondents had explored the possibility of a comity-wide op state-wide health plan. No question was inserted to de termine whether or not such a plan was available, but the New York plan alluded to in Chapter III is typical of the type of plan available in selected areas. Rates A case study of health plans indicated that such plane provided for a variety of rata structure. Thea© 157 agencies cooperating with the current health plan study Indicated that eighteen out of twenty-four provided for the employee-only category. Twelve out of twenty-one pro vided for the employee and spouse, five out of twenty-one provided for employee and two members of the family, twenty-one of twenty-four provided for employee and family (more than two), and only four out of twenty-three pro vided for a separate rate for male and female employees. The samplings returned showed that the majority (75 per cent) who selected health plans did not take into account (as a result of competitive bidding) possible ex- elusion of "high frequency" illnesses and more frequent types of operations in the proposed health plan. Composition of the bid In cases where competitive bidding was used In cluded In the bid were; (1) a complete description of the plan benefits wanted (In twelve cases— seven no answer), (2) a complete description of the size and character of the group (in twelve cases— seven no answer), (3) a com plete description of speoific assumptions on how the ad ministration of the insurance is to be handled (in eight cases— four none— two no answer), and (4) the annually in curred claims to be used by the insurance company or non profit organization as a basis for Its bid (in four cases*"" eight none--nine indicated not applicable) 158 Chapter Summary The selection process of a health plan is no less important than any other phase of health plan development. The selection of a particular health plan should be de termined by the needs and desires of a group. The neces sity for sound planning and cooperative effort is ever foremost. This chapter has presented findings in six general areas of health plan selection, namely plans and proce dure, conanittee selection, self insurance, cost, rates, and composition of the bid. In the area of plans and procedure the findings indicate that a preponderance of the health plans studied and of the replies received showed that a health plan con sultant was not used® When such consultants wore employed they were usually independent brokers or local brokers. One consultant was employed on a flat fee basis, none on a percentage basis. Seventy-five per cent of those organizations that responded indicated that they selected a health plan by committee. A little less than half of those reporting stated that they polled the desires of the potential sub scribers as to their preferences in certain areas of 159 health coverage. The least number of plans studied by the responding group was four, the most forty-two. Both employees and management had representation on the com mittees in over one-half of the agencies cooperating In the study. Just under one-half of those responding to the questionnaire indicated that they went to bid on their own specifications, while 5 2 per cent indicated that they used a "brand" plan for their specifications. Over two- thirds were satisfied with bidding out their own specifi cations. Preference to local bidders was not evident from the replies of twenty-six cooperating agencies. About one-sixth of those sampled indicated they considered self Insurance. Of those, one-sixth indicated they considered such items as premium taxes; payment into the fund of so much per person, or per hour per person; how the trusteeship was to be formed; calculations of loss ratios; use of an executor; amount of administrative ex pense; payment of the trusteeship for operation. Only 9 per cent of the agencies reporting stated that the employ ee had a choice in selecting one plan from more than one plan available. In the area of cost slightly over 70 per cent of the respondents reported that they received a firm price on their bids. However, there was nothing in the question 160 asked to indicate whether the firm price was adjusted after the bid was awarded by reason of sex, age, or number of participants* Almost three-fourthB of those replying in the study indicated that the period of firm rates was one year. There was little evidence that the respondents had explored the possibility of a county-wide or state wide health plan* Premiums and categories of rate coverage included the single employee, employee and spouse, employee and two members of a family, employee and more than two mem bers of a family, and a separate rate for male and fomaXe, Composition of the bid included four Important content areas which, except in the case of indicating the annually Incurred claims to be used by the insurance com pany or nonprofit organization as a basis for its bid, were preponderantly in evidence* CHAPTER V ADMINISTRATION OP THE HEALTH PLAN Introduction The decision on a particular health plan having been made there must be a systematic method of adminis tration of the plan to Insure its proper objectives. As indicated in the previous chapter some of the determina tion of the type of administration must be set up In the bid specifications. In terms of premium rates it will b© determined in initiating a plan as to who will administer and process the claims. The administration of a health plan is a definite cost factor, but perhaps most important, It will be indicative of the subscriber service given within the health plan and thus contribute largely to the plan® a subscriber acceptance or ultimate rejection. Area of Administration The results of the cooperative group that respond ed to the questionnaires indicated that one-half of those reporting an affirmative or negative expression had a choice a® to whether they would administer the health plan 161 162 or have It administered by another agency. Of those that did have a oholee as to whether they would administer the health plan, 58 per eent did not know whether or not it would oost more if administered by the subscribing agency rather than by the carrier Insurance company. Seventeen per cent believed it was less expensive if administered by the subscribing agency while 25 per cent indicated they thought the plan would be less expensive if administered by the carrier insuranoe company or nonprofit service group. Where a supplemental major medical plan is super imposed on a basic service plan there was no evidence to indicate that one plan costs more because it passed the administration of the plan on to the buyer. No question was asked to determine whether the self-administered plan may have already provided for the cost of administration In the rat© structure Itself® The sampling revealed that just over two-thirds of those responding in the affirmative or negative had a central administration of their health plan. In those cases where the plan was administered by the buyer it was indioated that the oost of administration ran from 2 to 4 per cent of the total premium. Based on other areas of review and intensive case study, this percentage is reason ably conservative as the average is near 5 per cent with 163 certain studied plans going as high as 8 per cent of the total yearly premium. Identification Health plans may or may not have a method of iden- tifieatlon for the subscriber. The sampling made in this study indicated that 87 per cent used a card for sub scriber identification while 13 per cent used other means not identified. Three respondents did not show what meth- of was used, if any, for subscriber identification. No question was asked in this study to indicate whether the identification cards were printed and Issued to each sub scriber by the carrier or the subscribing organisation. The issuing of a master policy was in preponder ance in the questionnaire response, as it is this policy that forms the basis for the service to the subscribing group® In conjunction with the master policy a number of companies issue individual oertifioates to place the sub scriber on notice as to his general coverage. Approxi mately five-sixths of those sampled indicated that their plans did issue individual certificates. Forms A significant number of respondents Indicated that they had doctors* and hospital forms to fill out. Slightly 164 less than half of thoae reporting stated that they had pharmaceutical and other separate forms to fill out. In dividual studies of plans show that there la a consider able variance In the amount of questions on a form and in the number of forms required. Personal interviews indi cated that the subscribing agency should understand thor oughly the amount of processing and procedure that would be required of the subscribing agency* s office before a health plan is adopted. Payment of Claims Fifty-seven per cent of the respondents indicated that payment of claims was made directly to the subscriber with only 14 per oent of the plans providing that payment of a claim pass through the buyers* administrative control. Two respondents found their health plan adminis tration to b© complicated. Thirteen others found the ad ministration of the plan fairly simple. Information Regarding the -----Be^fc'h flan Those agencies sampled expressed notable satis faction with the Instruction and information booklets issued by the health plan carrier (90 per cent). A review of many plans and Intensive study of others indieat© there 166 la a tremendous variety in the type and amount of Informa tion that la available to the subscriber* An extensive review of health plans indloatea that the sellers do make some sort of booklet available* In many oases the book let is so broad, vague, and general in its explanation that it does little more than highlight a few important points* Ten per cent or fewer of those who responded to the question on the adequacy of information and material Indicated that there might be improvement in the content of the booklet, arrangement and format of the booklet, availability of the booklet when needed, having adequate revisions, and getting sufficient copies* Communication of information One hundred per cent of those sampled with an affirmative or negative reply pointed out that they re« celved adequate information from the carrier of the health plan as well as adequate service* This included rapid claim service, meeting with the subscribers or subscribing agency regarding the answering of questions and explaining any items included in the health plan* A finding of in tensive oase studies indicates that this service is most important, particularly in smaller groups where there is not an Insurance department as part of the subscriber*@ 166 organisation* Adequate service was found to be one of the foundational supports of a successful health plan, and although it Is a oost item to the health plan carrier It was found to be ever available to assure satisfied subscribers and a contented subscribing agency* Informing new subscribers All of those responding to the selected sample in™ dloated that they had some procedure set up to Inform new employees of the existing health plan* However the major™ Ifcy (68 per cent) had no procedure set up to Inform and educate employees on a continuing basis as to the impor™ tance of such representative procedures as checking all doctor and drug bills to see that they were correct, mak ing certain that charges had been reasonable In accordance with past charges, and other similar areas of administra tion and cost factors involved in the health plan® Billing Two-thirds of the billing was accomplished period ically and on a total subscriber basis according to the questionnaire responses* For those organizations that have more than one health plan, three-fifths had the bill ing go through one carrier Instead of having separate billings* A significant number of those sampled aald the 167 monthly billing was the simplest and that corrections and changes in the billing were promptly taken care of by the carriers. As to whether the same person handles the bill ing that also handles the administration of the health plan, slightly less than half reported this to be true. Payment of Premiums The sampling indicated a marked trend toward partial payment by the employer. In the majority of oases the employer paid for the employees1 insurance and the em ploye© paid for any further dependent coverage. Benefits Received The result of intensive case studies showed that evaluating a health plan periodically Is a must so as to satisfy the needs of the group at a reasonable cost. Questionnaire sampling Indicated that this was don© in over half (62 per cent) of the cases to some degree. Slightly over half, or 55 per cent, stated that they were mathematically evaluating the premiums received by the carrier to determine if they were getting the prop er amount in benefits and dividends. The preponderance of those sampled indicated that they had received a clear financial statement from the carrier on the anniversary date of the policy, or more 168 often* However, there was no attempt to determine what was a clear financial statement due to the variety In approaoh by various Insurance carriers* All respondents were asked If they thought that they had evaluated to establish whether or not the claims incurred In their plan were realistic. Seventy-six per cent stated that they had made such an evaluation, but no questionnaire attempt was made to determine the extensive ness of this evaluation* Less than half (45 per cent) of the Insurance car rier® gave confirmed figures on the cost of the adminis tration of the hoalth plan based on the actual administra tion of the claims* The sampling revealed that it was unknown just how much of the employee1s health bill the plan was paying in almost three-fourths (73 per cent) of the cooperating agencleo* Reserves The results of conferences and Interviews with health plan consultants Indicated that It Is important to know how the reserves In a health plan are calculated* For It was pointed out that this was a fund area that could be used to strengthen the plan or to provide the carrier with an additional stipend. It was ascertained by 169 Intensive case study that certain reserves vere to he returned to the subscriber while others vere to remain with the carrier. The majority (77 per oent) of those sampled indioated they did not confirm whether or not they had any money to be returned due to reserve credits. Should it be necessary that the seller of a health plan be required to furnish to the subscribing agency the dol lar amount yearly of (a) premium taxes paid, (b) claims handling and investigation expenses, (e) commissions and acquisitions, (d) contingency reserves, (e) risk claims, (f) profits, (g) any other reserves established? Those respondents giving an affirmative or nega tive answer Indicated that just under two-thirds received no reporting on premium tax amounts paid by the carrier* Ninety per cent stated that they had received a report of claims handling and investigation expenses. Slightly less than half reported knowing the dollar amount of the money spent by the carrier for coomlsslons and acquisitions. Contingency reserve amounts were reported to the subscrib ing agency in just under 45 per cent of the cooperating agencies that responded to the questionnaire in the af firmative or negative. Ten respondents of sixteen indi cated that they were aware of an annual setting forth of the dollar amount of risk claims connected with their plan. Yet only one-third of those reporting this question a© 170 applicable to their plan knew the dollar amount of profit that was being claimed by the lnaurance carrier* How A Plan Is Rated The selected group sampled was asked whether their plan was community rated or experience rated* Of those responding two indioated that their plan was community rated; thirteen stated that their plan was experience rated; while five did not know how their plan was rated* The Intensive study of selected health plan cases Indica ted that It was extremely important to determine whether or not the health plan was experience or community rated* This, as was indicated in the study made* provides a basis on which claim experience will be rated* Health Plan Longevity Tho sampling revealed that most cooperating agon- cles had not had a health plan in operation too long* The range spread from on© to twenty-five years with the mod© being one year and the median being 1*5 years* Present plans in effeot (as contrasted with previ ous plans that had been dropped) ranged from one month to five years with the median being 10*5 months. This in dicates just how new the health plan area Is to school districts* city* and county participation* In some cases 171 there had bean a change In the carrier acre than once but the najorlty of those reporting Indicated that they had had only one health plan to date* Chapter Summary An Intensive study of selected existing health plans Indloates that the administration of a health plan or several health plans can be a slave or a master* Much will depend on the procedures set up in the health plan at the time of the selection* The administration of the health plan is a defi nite coat factor, but, even more Important, It is the key stone to the success of the health plan through the serv ices performed* This ohapter was divided Into several parts, namely, area of administration, identification, forms, payment of claims, information regarding the health plan. Including communication and information to new subscribers, billing, payment of premiums, benefits received, reserves, rating of health plans, and health plan longevity. In the area of health plan administration only one-half of those agencies sampled indicated that they had a choice of either handling the administration of the health plan through their offices or of allowing the in surance carrier to handle the administration of the plan* 172 Of those that had the choice of administering the plan as a subscribing agency, over half of the agenoles did not know whether It would coat more for them to ad minister the plan or hare It administered by the carrier* Just over two-thlrds of those cooperating agenoles that responded to the Inquiry on a central administration of a health plan Indicated that they did administer It centrally* Eighty-seven per cent of those sampled Indicated that they had used an Identification card to associate the subscriber with the health plan* A preponderance of those responding stated that they had been Issued a master policy as well as individual certificates* There were forms used to facilitate the adminis tration of the health plan in every plan sampled* Slight ly loss than half of those responding to this question in dicated that they had more than the hospital and doctor's forms to fill out* Regarding payment of claims, just over half re vealed that payment of claims was made directly to the subscriber, with fewer than one-sixth of the plans provid ing for the claims payment to pass through the hands of the subscribing agency* A prominent number of those agen cies sampled pointed out that they w©r© satisfied with 173 the Instruction and information booklets issued by the health plan carrier. Less than one-tenth of those sampled thought that there was need for improvement in the oontent of the booklet, arrangement of the format of the informa tion booklet, having adequate revisions of the booklet and the like. In transmitting information to new subscribers all of those agencies responding indicated that they had some procedure set up to inform new employees of the ex isting health plan. However the majority (68 per cent) had no procedure for informing and educating employe©s on a continuing basis to the many ramifications of their particular health plan. Relative to communication of information all of those sampled with an affirmative or negative reply indi cated that they reoeived adequate Information from the carrier of the health plan as well as adequate sorvieeso In the area of billing those sampled stated by a significant majority that such billing was done periodi cally and that billing was best accomplished on a monthly basis. In payment of premiums there was a marked trend toward partial payment of the employees* health plan premium by the employer. In determining the benefits received from a 174 particular health plan there was a fluctuation in the methods used to determine and evaluate such benefits* Just over half of the respondents indloated that they vere eval uating the premium reoelved by the carrier to determine if the subscribing agenoy was obtaining the proper handling of benefits and dividends* A preponderance of those sampled pointed out that they had received a clear finan cial statement, and just over three-fourths of the respond ents stipulated that they had made an evaluation to de termine if their Incurred claims reserves were realistic* Fever than half (45 per cent) of the insurance carrier® gave confirmed figures on the cost of the administration of the health plan based on the actual administration of the claim. A significant number of respondents did not know how much of the total employee1s health bill the plan was paying* Reserves sot up toy the health plan carrier war© not well understood by the subscribing agencies the ques tionnaire revealed* Seventy-seven per cent of those sampled Indicated that they did not confirm whether or not they had any money returned due to reserve credits* In the area of premium taxes paid, claims handling and inves tigation expenses, commissions and acquisitions, contin gency reserves, risk claims, and profits, there was very little consistency shown by the reporting agencies as to 175 who had received dollar amounts from the carrier for each Item, Only one-third of those reporting knew the dollar amount of profit that was being claimed by the insurance carrier, A prominent number of those who were sampled indi cated that their health plan was experience rated. Five who responded did not know how their particular health plan was rated. The statistics evidenced that health plans in the agenoles sampled were young in years. The median length of time for having a health plan in operation was 1.5 years* CHAPTER VI THE BASIC SERVICE TYPE PLAN AND/OR 3UPPLEMESTARY MAJOR MEDICAL COVERAGE Introduction The spectrum of health insurance la a broad one. There are many types of plans and these vary somewhat from region to region. As a companion to the Instituting of a plan and the administration of a health plan Is the content of the plan itself• For it is the benefits de rived from a health plan that will determine to a large extent the type of administration as well as the oost* Also, It goes almost without saying that it will be the benefits that must satisfy the needs of the group, or els® the plan has not served the purpose that gave It birth. There are three major areas of content coverage in this study of health plans. These divisions have been arbitrary and are not necessarily the only arrangement that could have been devised to treat the content* In this study the basic service type plan and the supplemen tary major medical coverage were grouped together only 176 177 because considerable coverage already existed following this pattern. The basio service type (nonprofit hospital and medical) and supplementary major medical could have been treated separately, or, in the case of the major medi cal, the comprehensive first dollar and supplementary major medical could have been combined. Pattern of Presentation In discussing the content of the basic service and supplementary major medloal generally superimposed on the basic type, we will discuss the content material by areas® These areas will be designated: hospital, surgical, medi cal, diagnostic X-ray and laboratory (inclusions and ex clusions ), general coverage, special coverage, and dental coverage* Hospital ©overage i >r u r n i r r w r r r T i r n m i r«ui. mu h »»m i miifWnimu As a result of conferences and personal interviews It was found that hospital expenses were usually very costly. This is an area where everyone desired to be well protected from the potential large expense of an Illness or accident. The sampling revealed that payment for a specified number of days in the hospital, usually at a certain bedroom (ward) type rate, ranged from twenty-one days to no limit* The type of room provided ranged from 178 private to any type* The preponderance of respondents Indicated that the semi-private two-bed room was the basis for payment* The trend of those health plans surveyed evidenced that the number of days coverage In the hospital exceeded seventy days up to unlimited; in a semi-private (two-bed) room the dally rate was from $12*50 to no limit. Re-entering the hospital can be a serious problem for those subscribers who suffer a relapse or develop another type of Illness soon after their first release. Th© respondents to the questionnaire indicated that the subscriber must wait thirty, sixty, or ninety days before he can re-enter the hospital under the sampled health plans. The same rules that apply to the subscriber also hold good for the dependents according to the respondents sampled* All plans sampled provided for an anesthetist. Th© cooperating agencies indicated they allowed for a maximum payment of $30*00 to no limit* Those agenoies that responded to th© question evidenced payment by half- hours or hours, with the first half-hour or hour ranging from $15*00 to $57*50 and the next half-hour or hour from $5.00 to $21*00 per hour* Ninety per cent of those sampled Indicated that the subscriber was not required to use a specific hospital* Th© plans sampled provided for a maximum amount to b© paid 179 to non-contracting hospitals. This was broken down into so much per day for the first day1a oars and so much a day for a following number of days' care. Where a subscriber would use the emergency facili ties of a hospital without becoming a registered bed pa tient the respondents indicated in 82 per cent of the agenoles reporting that the hospital benefits would apply. In 77 per oent of the plans reported where the Injury could be construed as an accident* the hospital benefits sould apply if th© person used th© hospital facilities without being a registered bed patient. Sixty per cent of those plans reported had a wait ing period of thirty or ninety days after a subscriber was discharged from the hospital before the benefits would re new coverage under the health plan for the same oondltion. In a review of a number of plana it was determined that there were plans that had no waiting period or would ©over subscribers only but not dependents for benefits for the same condition. Where accidents were concerned the sampling of co operating agencies revealed that fewer than 10 per cent of the plans surveyed provided for a waiting period before benefits applied for re-entry into the hospital. The basic service plans or supplementary major medical plans sampled did not provide for hospitalization 180 for diagnostic reasons. The results of personal inter views with consultants showed that this was* In fact* one of the criticisms arising from this type of coverage from a preventative medicine point of view. In hospital care pre-existing conditions were prominently covered. However in a preponderance of cases studied the pre-existing conditions that were covered did not take effect In oases where the subscriber was hospi talized at the time the health plan became effective. Re spondents to the questionnaire revealed that if a sub scriber was hospitalized the health plan did not ©over him for reason of hospitalization at the time the health plan took effect* A waiting period was not necessary aft er release from the hospital before the health plan cover age took effect in 60 per cent of the plans. The time of a waiting period in the plans sampled which provided for a waiting period ranged from ona day to eleven months. When considering hospital coverage It was devel oped from a study of numerous plans that there were gen erally two areas of coverage: namely* room and board and the ancillary services, or "other” hospital services not listed under room and board. Such services inoluded therapy* supplies* medlolnes* and other miscellaneous items and constituted an expensive contribution to th© hospital bill. Although the samplings did not reveal a 181 concrete incident, the writings and conforencea attended indleated that in soma oasas the area or ancillary serv- icaa was weighted with expense in order to inorease the else of the hospital bill where the amount of money was exhausted or limited for room and board. In case of the ancillary services, the coverage was handled as a cash reimbursement up to a maximum amount in one case; with unlimited coverage in six other plans; and a cash reim bursement to a fixed amount adding an additional reim bursement on a percentage basis in no plans reported. Health plans usually Indicated that benefits were renewable immediately after hospital discharge, some after complete recovery, others when the subscriber resumed em ployment, or, as indicated above, in some cases it was a specific number of days after hospital discharge. These same conditions may or may not equally apply depending on whether the subsequent health, condition was related to the initial confinement. A notable number of the plans sampled revealed that 75 per cent resumed benefits Im mediately; one indicated thirty days; one ninety days. Those with related conditions evidenced comparably the same percentages. Is it necessary to be In the hospital a specified number ©f hours to b© classed aa a hospital patient? Would this also apply to an emergency? Or must the 182 subscriber be a registered bed patient? It la Important that the health plan eontraet include this information* Of the seven who replied to thla area all indioated that the aubaoriber did not have to be a registered bed patient In order to be olaaalfled aa a hospital patient* Thla finding waa contrary to the results of an intensive study into selected health plans* A study of many plans revealed that a very few supplementary major medical plana provided coverage by use of a co-insurance factor up to a maximum amount for all hospital expenses* Others provided for a co-lnsuranc© factor after a specified sum (deductible) such as $150 or $500 had been satisfied by the subscriber* Still other plana seemed to favor a maximum for any one Illness in addition to a top maximum for the entire health plan* A dollar lid on a specific illness would normally keep the health plan expenses down in long illnesses only and therefore would not normally affect the lifetime of the policy for a specified number of years* The results of the sampling Indioated 57 per cent were for a lifetime* One respondent reported a clause which stated that when a sum of $1,000 had been expended by the health plan on any one subscriber then the subscriber could reinstate the entire amount of the policy* s dollar coverage upon proof of good health* A study of many health plans indicated 183 this to be a frequently-appearing as veil as a desirable item in order to assure that a subscriber, over a period of years, did not have his maximum amount "eaten away" by several illnesses. All eoopsratlng agencies indicated that their health plans provided for hospital expenses for out patient surgery. The results of numerous personal inter views revealed that this could be a desirable feature especially for those who needed minor surgery in the doc tor' a office or in a clinic. However, it was established in personal interviews that such a provision would need the cooperation of th© medical profession to assure Its careful use. Any health plan should be analyzed to determine if there are co-insurance features for ancillary expenses, surgical expenses, or doctor's calls In the hospital® Such co-insurance as indicated by a review of the related literature is a control feature but not necessary if ex penses are carefully reviewed and fairly administered. The results of the questioning showed that 55 per cent had co-insurance features for ancillary services, 50 per cent for surgical expenses, and 55 per cent for doctor'a calls in the hospital. Eight of twelve responding to th© questionnaire Indicated that in-hospital well-baby ear® ia part of the hospital or maternity benefits. A review 184 •f many health plana of the type discussed In this chapter shoved that the plans generally did not provide for well- baby hospital oare, except In some cases, after seven, eight, or eleven days In the hospital* Health plans can provide for a different amount of payment to the anesthetist depending on whether the operation is classed as major or minor. Only 30 per cent of those cooperating agencies having this type of health plan Indicated that payments were different In major or minor operations. In cases where there was a distinctions a review of the literature revealed that a subscribing agency had to observe that more than the proper number of operations were not classed as minor and thus provide In equitable coverage at a smaller reimbursement fee* No health plan studied of the type referred to In this chapter provided for a Relative Value Study (sched ule) in the basic or supplementary content area. Many con sultants in the health plan field stated that the Relative Value Study may well be viewed as a desirable attribute not available in sampled areas under this type of coverage. The constantly burning question of what are fair charges and the control over charges can find considerable support in a Relative Value Study. Sine© a tonsllectomy or adenoldectomy is so com** soon, 10 per cent of th© health plans covered in th© 186 questionnaire provided for only one day*s confinement under the health plan* Plans that were studied stipulated that over a certain age (twelve years) a subscriber or dependent could stay two or three days in the hospital for this operation* This Is a benefit that can be restricted too tightly, and yet, under this type of basic and/or supplemental major medical coverage many consultants pointed out that there could be little control If some limits were not placed on the benefits provided* With equitable and reasonable use of either of th© types of coverage developed in this chapter there would perhaps need to be no restricted number of doctor* s calls In the hospital* However, the sampling revealed that 50 per cent of the plans limited the number of calls In order to maintain control and avoid abuse of this benefit* The specific number of calls covered ranged from 21 to 70 per illness with on® providing for more than 120* The local Blue Cross representative indicated that on® of the selling points of the nonprofit hospital type plan was the fact that no deposit is necessary before entry into the hospital* The only necessary requirement for hospital admission is the identification card* Admission to a hospital by assignment was possible according to 83 per cent of th® respondents giving an af® flrmative or negative reply* 180 In the examination of health plans a study of seleoted Items indicated that it was veil to see if the other hospital expenses (ancillary servlees) provided for a special deductible amount* The same applied to surgical expenses and doctor's oalls in the hospital. Much of the real benefit of the hospital coverage could be minimised by the imposition of a special deductible to these above- named areas* This would also apply to a special deduct ible for the room and board portion of the health plan* Some plans studied provided a blanket deductible for the entire health plan. The blanket coverage could be rather quickly evaluated In terms of Its limiting aspects to over-all coverage* However special deductibles for por tions of health plans are less easily recognized although just as effective in reducing benefits that may be de sired* All who responded to the sampling stated that there was no special deductible for surgical expenses and the other areas associated above* Surgical coverage Basic servioe plans surveyed showed that 80 per cent had a fee schedule* A study of the related litera ture revealed that the fee schedule was representative of charges In the area where the health plan was being insti tuted* Did the fee schedule apply without reduction to 187 dependents? The related literature indicated that the dependents accounted for over 50 per oent of the expenses of a health plan and thus it was necessary that the equal ity of dependent ooverage be watched carefully* Hone of the supplementary major medical plans studied provided for a fee sohedule, and thus an important element of con trol was absent where no other method of control existed to limit excessive oharges* Surgery may or may not be limited to cutting in a health plan® Ninety per cant of the replies indicated that surgery was not limited to cutting* The responses to the questionnaire showed in every case that surgery was covered under the health plan if performed at a place other than in the hospital* Certain plans studied limited surgery to hospital area only; others to hospital, doctor* s offices, or clinics only® Still others were more comprehensive* Surgery benefits, in every reply to the sample, war© renewable for the same conditions. However, a study of other plans pointed out that health plana oould be written to exclude renewable provisions and to apply only to a new illness needing surgery* In this regard there saight also be a waiting period before such benefits became renewable® 188 Should surgery benefits be renewable for related causes? Unrelated oauses? Again, as In the hospital coverage, would such renewable benefits use the criterion of after Immediate hospital dlseharge, return to work, or as Indicated above, after a specified number of days? Those cooperating agencies that replied to this comprehen sive question stated that benefits were renewed upon re turn to work. Again, as In the area of the hospital oover age, should there be a deductible or co-insurance factor applied to surgery expenses outside of the hospital? No returns to this question revealed any special deductible. Especially In the basic type of plans studied when more than one operation Is performed at the same time, there can be a provision In the fee schedule to pay for only the highest priced fee or for both fee schedule amounts combined* Plans reviewed payed the moat expensive fee schedule amount plus one-half of the lesser operation's fee schedule amount* Seventy per cent of those responding to the questionnaire indicated that a fee higher than the moat expensive single fee was used. As In the case of performing more than one opera tion at a time, a subscribing agency should determine whether full payment will be made for surgical benefits only In oases involving hospitalization* Only one reply from the sample revealed that the health plan provided for 189 less than full surgical benefits where auoh surgery was performed outside of the hospital* Medioel coverage Doctor*s visits to the hospital* limited by the number of calls or dollar amount per call* would be covered under this section of a health plan* Ninety per cent of the reporting cooperating agencies provided for doctor*a visits to the hospital. This faot was alluded to under surgery and hospitalisation* It la mentioned here in or der to stress that such coverage may be available under this section also* The dollar limit per day ranged from #3.00 to $15*00, *3 expressed in the sample* The area of home and office calls coverage varied a great deal* depending on the type of coverage available in plans studied* Some health plans paid up to a maximum per day for home visits or office visits. Some plan© studied had set a maximum amount per year to cover this area of benefits* Such limiting coverage was applied to basic plans in cases studied* Returns from the samples Indicated a minimum of *00 to #18. 50 on the supplemen tal major medical portion above the deductible* The co- insurance feature provided coverage up to the maximum of the policy* One of the strong selling features of the basic service type of plan and/or the supplementary majo/’ 190 medical type of plan was the unlimited choice of doctors. Surcharges under the type of plana developed In this chapter existed In only 22 per cent of the replies. Provisions for home calls on a surcharge basis were re ported by 40 per cent of the sample. Review of the re lated literature indicated that medical care treatment In the home, office, or including hospital visits may have a yearly dollar limit, a limit per day, or per call. The amounts per call of $3.00 to $5.00 were not uncommon. One plan studied limited the yearly amount to $225. Many medi cal section coverages provided for the us© of specialists® visits to the patient in the hospital. This is a service that should be covered, if possible, as the use of spe cialists has become a rather oommon practice. Ninety per cent of those cooperating agencies reporting pointed out that specialists' charges were covered. As a result of personal interview it was learned that if there was any special co-insurance or deductible amount to be applied to the medical portion of a health plan, the amount of deduct ible and co-insurance and the areas covered should be care fully examined. Here again, this might be a deductible or co-insurance amount above a blanket amount, or a special device to restrict a certain area of benefit, such as doc tor® a calls or patient calls at the office* 191 Since the medical services rendered under a health plan studied would have some area of benefit coverage in the hospital and some outside of the hospital, oareful analysis should be made of the coverage in each case* This would prove true In terms of any special deductibles or co-insurance factors as well as dollar or day limits* Supplementary major medical plans studied did not provide for recognition of in-or-out-of-hospital medical coverage differences, whereas the basic service plans did in the majority of oases recognize a difference in coverage® In areas of benefits where the health plan pro vided coverage for a subscriber's visit to the doctor's office under the basic plan, those responding to the ques tionnaire revealed that there was no restriction of bene fit by starting coverage with the first visit* A result of intensive study of selected plans showed that this might or might not be the same for sickness In fcormo of starting coverage with a visit after the first one* Dlagno atlo X-ray and laboratory coverage tinclusions and exclusions) A number of specific benefits or lack of benefits have been grouped under this heading as organized In the questionnaire* This subject includes to a large degree those benefits that may acoru© undor the general heading 192 of diagnostic X-ray and laboratory coverage. Although tha benefits discussed here may include only one item in a specific area it may be very frequent or most infrequent in terms of usage. Consultants interviewed indicated that subscribers must watch that they do not receive a great deal of eoverage of infrequent occurrence benefits and a disproportionately small number of frequently oocurrlng benefits. For, as it was pointed out repeatedly in con ferences, it is what serves the subscribers* needs that provides an excellent health plan and not how many sec tion® or paragraphs are contained in the contract* All drugs and medicines were covered in the hos pital in the case of 88 per cent of those responding to the sample. No dollar limit was provided in any of the plans in the sample. A study of many plans revealed that predominantly the basic service type of plans used a dol lar limit If there was a limit at all. The supplementary major medical plan was prominently limited only by the maximum dollar amount of the policy. A co-insurance fac tor or deductible may exist, and those benefits should be examined in detail. A review of the related literature Indicated that in 1959 the cost of drugs and medicines exceeded the cost of medical fees, so that the dollar amount of drugs and medicines is looming as s larger c o s t factor in health plans. 193 Are physiotherapy and hydrotherapy provided under a health plan? A report front personal interviews indi cated that this type of treatment could be most oostly and might call for special equipment usually located near a rather large medioal clinic or hospital* Such treatment was provided in every plan surveyed by the questionnaire* Was X-ray and radium treatment provided? As shown above, this requires special equipment and may be a costly factor although a very necessary one in the treatment of certain diseases* Treatment by X-ray and radium was again covered in every plan sampled* The rental of an iron lung, bed, therapeutic equipment, and corrective orthopedic equipment can be a precious benefit for those striken with a dread disease or enduring a long siege toward recovery. These benefits are not too commonly used according to representatives of carriers, yet they provide vital protection to a ©mall percentage of the whole group* Other prosthetic or ortho pedic devices are not frequently used but necessary. Coverage in both of these areas in the sample was provided for in 76 per eent of the plans reported* In the general area of exclusions, all health plans studied excluded benefits covered under the state workmen*s compensation insurance, or treatment which waa available and received in governmental hospitals or at 194 government expenses* Injury or sickness Incurred through an aot of war was excluded by a preponderance of plans studied, but in the questionnaire sample was exoluded by only 62 per cent of those reporting* In this area of coverage it was found by extensive study that the above exclusions were almost universal in the basio service plans; the supplementary major medical plans contained some exclusions, but they were not as absolute as in the basic service plans. Services rendered by members of the immediate family as covered by the health plan were excluded in 60 per cent of the sample* Bye glasses, refractions, and hearing aids, except as needed as the result of an accident, were exoluded al most unanimously under every set of plans studied In this section. Another area excluded was that of unreasonable charges, which la a vary difficult Item to enforce; also exoluded were out-patient drugs and medicines in basic service plans* All but one plan studied in this section excluded cosmetic surgery not in connection with an aocident or re pair* Personal comforts in the hospital or home such as radios, televisions, beauty treatment, and barbers were excluded under all plans studied In this section* 195 In the area of mental or nervous disorders, the basie plans studied completely exeluded coverage. Supple mentary major medical coverage in 25 per cent of the plans sampled provided for benefits beyond diagnosis. In the supplementary major medical area there was a maximum dol lar limit ($500) that was much lover than the maximum cov erage under the over-all policy. Benefits were available covering the cost of drugs dispensed at pharmaoies in 70 per cent of the oases reported. The study in this area of content revealed that there was no provision for diagnostic study or preventa tive oare using laboratory or X-ray equipment when such care did not require hospitalisation. When coverage vas provided as revealed by the review of many plans, the amounts allowed were usually small (i.e., $25.00, $50.00). Such benefits, if available, were extended to dependents as indicated by the replies of the respondents. The plans studied aside from the questionnaire sample revealed that where such benefits were available they generally extended to dependents. Diagnostic and laboratory coverage for dental ex amination or treatment, other than for repair, and eye examinations was non-existent in the sample replies. Bou tina physical check-ups were provided In 20 per cent of the cooperating agencies' plans. In over 200 health plans 196 reviewed there was no coverage for dental treatment other than repair. Routine physical check-ups were provided In no oases individually studied. Hospitalisation for diagnostic studies, rest and convalescent cures, and rehabilitation care were excluded benefits in the content area (basic service and supplemen tary major medical) in all individual studies made and the responses to the sample. In fact, It was revealed In the related literature that this area was one of the most severely criticized features of this type of coverage, In that it does not provide adequate preventative, diagnostic, and rehabilitation care. Surgery for normal maternity was covered In half of the plans sampled. Dental surgery, except as a result of accident or Illness, was excluded In 50 per cent of the plans reported by th© questionnaire respondents. A doctor's visit to the hospital for conditions resulting from pregnancy was covered in ©very sample re sponse. Again, consultants pointed out that the extent of maternity coverage should be checked by those desiring strong maternity benefits. Eighty-eight per cent of the health plans In the sample did not provide coverage for treatment of congenital deformities. One plan studied indicated that If th© child 197 was born after the mother was covered under the health plan then deformity benefits would be available. Under writers Interviewed stated that this type of benefit would not be a frequent Item of use, but again, an important one for the few who would be faced with the expenses for cor recting such deformations. There can be a small or large expense connected with pre or post-operative care. Eighty-one per cent of health plans reflecting a response to the questionnaire did not cover this condition. Health Insurance consult ants have indicated that some of the provisions as benefits here may be covered while In the hospital under surgical or through ancillary services so that this item by itself may not bear the importance that it might appear to have at first blush. In 90 per cent of th© plans sampled dietary serv ices, laboratory and X-ray while in th© hospital, and gen eral nursing care were offered. A lesser number (75 per cent) of this type of plan provided for special nursing. Expenses of the operating room, cystoscopic room, splints, casts, dressings (ancillary supplies), treatment of allergies, and therapeutic injections, are covered either under the basic or supplementary major medical por tions of th© content area of this chapter. Th© sample re vealed such coverage In 90 to 100 per cent of th© plana 198 reported* Sterilization coverage was favored by 75 per cent of the plana studied although it was generally marked as part of the major medical portion of the combined plan rather than of the basic service plan* Intravenous Injections and hypodermics for seda tion, oxygen, basal metabolism, deep radium treatment, Isotopes, rental of oxygen equipment, and treatment of diseases medically termed as Incurable were all covered in 90 to 100 per cent of th© plans reviewed by the ques tionnaire* Again, where th© basic plan did not provide coverage the supplemental major medical did cover the costs on a specified basis* Blood plasma and whole blood were covered under the major portion (60 to 70 per cent) of health plans studied in this area* Benefits in th© us© of cobalt, circumcision, and contagious diseases requiring isolation were covered in th® majority of plans sampled (77 to 87 per cent) by a combined plan of basic and supplementary major medical* Travel recommended by a physician was unanimously excluded in those plans that were sampled. The lack of control here is one that would, or could, make the over-all cost of the health plan very expensive and most difficult to justify* In th© same category is custodial oar© without 199 specific medical treatment* Only one plan studied pro vided for coverage here. Background study shows that the benefits in this area oould be hard to determine and costly without oontrol* Basal metabolism was a benefit oovered by all plans sampled and doctors Interviewed said such coverage provided a basic tool of the laboratory technician in the health field* The benefit coverage of the electrocardiogram, diathermy, and heat treatments Is a portion of benefits that were included in 90 to 100 per cent coverage in the basic and supplementary major medical health plans* The massage finds less popularity for frequency in benefits of health plana studied (55 per cent). Physical therapy was provided for in 90 per cent of th© plans sampled* Whirlpool baths elicited no response by cooperating agen cies as part of the questionnaire® A majority (71 per cent) of health plans studied indicated that they provided for treatment of medical or surgical care In the hospital for conditions not usually treated in the hospital, such as a common cold or minor cuts* Treatment for venereal disease was covered in all plans sampled and was found through study of other selec ted plans to b® a common benefit* Treatment for sterility, 200 frigidity, and impotence was a less common benefit than waa venereal disease coverage, although it was covered in the majority (57 per cent) of the plans sampled. Treatment for orthopedics was a benefit consid ered* The respondents indicated that it was covered in 100 per cent of the plans reported by cooperating agen cies. Should one who intentionally tries to take his own life or inflict intentional bodily Injury to himself b® covered under a health plan? Combined (basic and sup plementary major medical) health plans sampled by the questionnaire were indicated by 75 per cent of the respond ents to cover a subscriber in a suicide or intentional injury attempt. Should alcoholism be included under a health plan? Leas than half (43 par cent) of the health plans sampled provided for such ooverage* Armed servioe-conneoted disabilities can be cov ered under this content type (basic and supplemental major medioal) of health plan. The samples revealed that it was not provided for in the majority of cases (43 per cent). Conditions resulting from a major disaster, or treatment as a result of engaging in a riot may be cov ered as benefits. In th® major medical portion of th© 801 health plan, responses to the questionnaire indicated that coverage was available in 100 per cent of those plans re sponding to this item* Coverage for hyperopea, myopea, or astigmatism may be found in a combined plan. The sampling Indicated that benefits had been provided in 50 per cent of the plans. General coverage Items discussed under this topic will be those that in some oases might be placed under another category. However, being general in nature and usually pertaining to the entire health plan, they have been treated under a separate section. One technique for spreading the choice of benefits is the use of the high or low option provisions of a health plan. Th© federal government has made us© of this type of coverage in a number of its health plan offerings. Intensive study shows that it serves the purpose of pro viding for a solid comprehensive health plan with & choice of less coverage in some areas at a reduced cost to the subscriber. Obviously, the high option has a higher monthly premium rate and more comprehensive benefits than the low option. The options may also be used to tailor- make a plan for two groups with divergent interests or 202 income, or to provide for more emphasis in certain general areas aa the needa of the group may vary* No plan, aa reported by cooperating agencies, used the high or low option technique in this study* Each group must decide who will be eligible for coverage under a health plan* In many areas of study this evidences a breaking point between temporary, on-and-off hourly personnel, and those who are employed steadily each day on a monthly, weekly, or other period of employ ment basis© A study of a number of plans and the result of interviews and conferences revealed that in the case of school districts it was urged that both certificated and classified (non-certlficated) personnel be part of the same plan. In cities or other governmental agencies it is thought that as many departments as possible should be members of the same health plan so as to provide a broad base of good as well as poor health risks* What of those employees who do not join when th© health plan is first offered? Would they have a waiting period before being eligible to Join? Or can they Join at any subsequent date? A preponderance of those sampled (75 per cent) pointed out that there was a waiting period and that it might be set for any stipulated length of time* The health plans studied indicated that a thirty to 203 ninety days' period was common* Some plans reviewed had a probation period before members became eligible to join the health plan initially* None were evldenoed In the sample* Where a waiting period was required, thirty days was, by trend, a common period of time stipulated* A health plan, to be truly comprehensive, should be operative anywhere in the world* Those health plans sampled by the questionnaire indicated that this was the unanimous trend (100 per cent) for the basic and supple mentary major medical type of coverage. A result of interviews and conferences revealed that one important feature of the health plan is the con version privilege that can be made available. Although a study of many individual plans revealed that the indi vidual plan containing a conversion feature was, in the majority of plans sampled (75 per cent), more costly and provided for fewer benefits than th© group plan. Ninety per cent of the plans sampled indioated that a conversion privilege was provided. Eighty-eight per cent of those responding stated that the conversion privileges were only contained in the basic servioe type of plan. There was no age limit imposed on the subscribing employee desiring to join a health plan in the cases sampled. However, in the case of dependents the picture was entirely different. Coverage for dependents started 204 at birth, at eleven days or fourteen days, or at other stipulated points of time. Those days mentioned vere most common in the health plans reviewed by the questionnaire* As to the upper age limit of dependent coverage, certain health plan responses limited other than spouse coverage to age nineteen. Others Indicated age twenty-three if un married and a student living at home or still considered attached to the home. Other plans made no limit on age for a dependent, nor a limit of sixty-five years of age. Spouse coverage did not place restrictions as to age un less it was in the upper age limit such as sixty-five. The basic service type and supplementary major medical plans did not have a different level of benefits and/or a different premium rate based on the subscriber*s Income in any plans reported. A review of the related literature revealed that the Blue Shield plans have used this Income differential commonly though distinct from Blue Cross and supplementary major medical. Health plans in this area of coverage provided for doctors who are licensed by the state or official governmental licensing bodies such as physicians, dentists, surgeons (D.O.M.D.) in all but one plan reported. One plan recognized Christian Soience practitioners as accept able for payment of health services. 205 There are health plana that Indicate that the sub scriber must select the two-party premium rate structure to be eligible for maternity benefits under the plan. The majority of plans sampled (60 per cent) made this require ment. From personal interviews it was noted that adminis tratively it was a problem to see that a subscriber changed from a single rate to a two-party rate upon marriage so that maternity benefits could be provided. In some cases this change requirement was not called to the attention of the subscriber, and the subscriber did not think of making the change himself. Under such cases a subscriber could be disappointed to find later that maternity benefits were not available to his spouse. Under the type of coverage discussed in this chapter a physical examination was not required as a con dition of joining the plan In every response to the ques tionnaire® In certain health plans the categories of employ ees present quit© a variety. Of all plans studied and sampled the general trend seemed to be that if an employee was employed fewer than a specified number of hours per week he was not eligible for benefits under the health plan. The responding cooperating agencies indicated that the range of hours was from 90 to 139. Two plans required full-time employees only. 206 If an employee was 111 at the time the health plan became effective It was found in all of the plans sampled that he might Join when he returned to worlc. This re quirement would not necessarily be mandatory. However, health plan consultants pointed out that it may be a wise choice in starting coverage with a reasonably healthy group even though some members may be waiting to have medi cal or surgical treatment after the health plan becomes effective for them. Under the basic service type of plan and supple mentary major medical, all health plans sampled allowed a free choice of doctors as long as the doctor was licensed by an authorized governmental body. A review of the lit erature established that this type of coverage (basic service and supplementary major medical) did not attempt to have a panel of physicians from which the subscriber had to select a member. Consultants pointed out that th© unlimited selection of doctors feature has been one of the strong selling points of this type of coverage. In examining the provisions of many health plans it was found that only those expenses that were Incurred under the plan after joining the plan could become eligible for payment. Th© replies Indicated that there was no waiting period imposed on a spouse to enroll In the converted 1 207 individual health plan in cases where the subscriber em ployee was deceased. This was true in 80 per cent of the replies to the sample. Some mention was made earlier of the necessity to watch the deductible and oo-lnsurance features other than the blanket type for various types of benefits. Thirty per cent of the health plans sampled of the type discussed in this chapter provided for special deductibles or co- insurance features. A careful study of the literature re vealed that both of these factors as control features could be used effectively to control abuses or could seri ously restrict benefits and squeeze the benefit provisions within a certain cost. Would you wish to make the joining of a health plan compulsory or voluntary? In the background study this had depended somewhat on whether the subscriber em ployer was paying th® entire cost® There were some points revealed In the literature that should be examined in this connection. Voluntary plana, unless they have a unique feature of a large percentage belonging due to the finan cial Inducement of employer payment or for some other rea son, may have the bulk of the membership classed as poor risks. Conference results Indicated that health plans, to b© successful, must have many good risk subscribers as -*©11 aa poor risk subscribers! otherwise, the health plan1® 208 demise is almost as certain aa the setting sun* Compul sory membership assures total group participation* How ever, it also smacks of pressure which is traditionally resisted by Americans* A preponderance of the consultants interviewed indicated that perhaps a better way than com pulsion would be to induce by financial partnership, a sharing in the cost of a plan between employer and employ ee, and/or to provide an intense and continuous education al program to oonvlnce the group of potential subscribers that they cannot afford to be without good health plan protection. This can do much to afford a good membership quota to a voluntary participation plan. The results of the respondents reporting on the questionnaire revealed that 50 per cent had compulsory plans and 50 per cent had voluntary plans* There was no provision in any plan studied of the typo discussed in this chapter to provide for employees on leave of absence without pay to be covered for a period of time, with the total health plan cost being at the ex pense of the employee. Health plans did provide for a period of time while on leave of absence with or without pay for employees to be eligible to share the health plan, costs for a stipulated period of time with the employer or that neither the employer nor employee would have the expense. The time stipulated varied from three months to 209 twelve months with ninety days being the most frequent. Flans of the type studied In this ohapter were Indicated by 80 per cent of the sample to provide for a period of extended coverage for employees leaving the group while they decided whether or not to convert to In* dividual Insurance. This provision for an extended period and conversion did not require any physical examination. The period of time provided, according to the results of the questionnaires, ranged from twenty-nine to thirty-one days. A number of persona interviewed in the field of health plans pointed out that a subscribing group should watch for bullt-ln abuses in the health plan structure. Some plans studied provided for diagnostic treatment only if hospitalised or if at a hospital. Thus the subscriber was confined to the hospital or forced to go to the hos pital for this type of treatment. This hospital treatment is far more expensive than similar treatment at a clinic or the doctor*s office. Seventy per cent of those who re sponded In the questionnaire to this type of plan indi cated they did not know of any abuses in their plans. For those groups having the basic service plan superimposed by a supplemental major medical type of plan, the trend was established (80 per cent) that a subscriber must Join both plans but not one without the other. A 210 study of individual plans indicated that perhaps one of the best advantages of these types of plans was their ability to complement one another. This value would be lost if one could subscribe to one plan and not to the other. Surcharges were not imposed, in the results of the sample, as part of the basic service and/or the sup plementary major medical plan in the preponderance of cases. The use of the surcharge was a way to control cer tain benefits where it seemed necessary. As a result of many personal interviews, it was indicated that generally th© paper work involved can cost more than the charges themselves unless there is substantial use of the benefit. In 90 per cent of the plans reported by respond ents to the questionnaire a subscriber could be covered as an employee and a dependent under the aame health plan and therefore be eligible for double benefits. This condition usually occurred where a husband and wife were subscribers to the same group. A common method of subscription, as revealed by the literature, where a couple belong to the same health plan was for one to subscribe as an employee only and the other aa an employee only, or as an employee and family. Or, one could be the total subscriber with the other not making application as a subscriber at all. Generally, conference and Interview results indicated that it was advantageous for both to be subscribers where 211 esqployee benefits may be substantially more than dependent benefits under the health plan. A health plan may have a right of subrogation clause. This merely means that if the subscriber or de pendent is entitled to receive payment from any other per son as a result of legal action or claims with respect to expenses paid or reimbursed to him covered under a health plan, the plan carrier shall be entitled to the right of action against such other person in place of the subscrib er or dependent. The majority (75 per cent) of plane studied did not have this clause. Quality control provisions under this type of coverage can only be voluntary as revealed by the litera ture. Quality control has been discussed in previous chapters. Health plan consultants feel it is vital to a high standard of professional judgment and cost control. The basic service type and supplementary major medical plans do not concern themselves with this quality control on a direct basis and are therefore inherently weak in this area. The insurance carrier has no control over costs or professional treatment under the basic and sup plementary major medical type of coverage. Thirty-three per cent of those respondents to the questionnaire indi cated that they had some type of quality control. A re view of a number of selected plans pointed out that. 212 generally, under the type of plan discussed In this chapter where the supplementary major medical plan was superimposed on the basic plan, the basic plan benefits were exhausted first before the major medical portion of the plan took over* The virtue of this arrangement was that the basic service plan was more selective In Its cov erage, and the major medical was broad in Its scope to satisfy large claims not absorbed by the basic plan, and yet not too expensive to buy* This superimposed arrange ment, however, can be by the provisions of both plans developed to complement or work against one another* Au thorities interviewed In the health plan field indicated that careful coordination of deductibles, co-insurance area, and exclusion areas will need to be analyzed care fully in both plans* la there an excess insurance clause in the health plan a subscriber intends to buy? This may ba explained by stating if a subscriber or dependent is covered under another policy then that other polley must assume the health expense costs unless the policy also has an excess insurance clause* If both have an excess insurance clause then it will depend on who the subscriber is, whose ex penses are involved (subscriber or dependent), and the dependent* a relationship to the subscriber* In any ©vent, a subscribing agency may want to write into any health 215 plan the exclusion Tor duplication of benefits. Inten sive study reveals that one theory indicates if ve pay under tvo policies ve should collect under two polloles even though such collections are for the same health ex pense. The other theory is that the health expense satis fied once meets the obligation of the insurance even though there be more than one policy. In any event, if specific provisions are made to exclude duplication of benefits this can be reflected in the premium cost to each subscrib er. Thirty per cent of those plans sampled by the ques tionnaire Indicated that there was an excess insurance clause in existence. Only 50 per cent of the plans sam pled specifically excluded duplication of benefits. For those wanting strong maternity and pediatric benefits, provisions for well-baby care in the doctor's office for a specified number of days or months after birth may be desirable. Some plans specify a number of calls at the office within a certain number of days or months. In the plans sampled this type of benefit was not common; it appeared in only 20 per cent of the cooperating agencies' replies. In the case of a major medical plan where there is a deductible to satisfy, there is a common provision as evidenced by the literature to be able to use the ex penses for the last three months of a health plan year as 214 applying on the deductible for the next health plan year. The number of months may, of course, vary from plan to plan but the last quarter period Is quite common where any provisions are made at all. In the sampling made In this study, 83 per cent of those answering in the affirmative or negative indicated that the last three months1 expenses could apply on the following year1s deductible. The type of insurance mentioned under this chapter could be written under the so-called foundation type of health plan, particularly the major medical portion. How ever, since there were no respondents having health plans as discussed in this chapter written under existing foun dation type plans, this plan will be discussed in more de tail in Chapter VIII. The related literature reveals that a health plan may complement certain social insurance benefits available to subscribers, such as State Disability Insurance, or health plans can be inoperative where benefits are pro vided under a social Insurance program. Most plans stud ied on an individual basis excluded any health plan bene fits where such benefits would be available under social insurance. No replies from the sampling indicated that health plan benefits would apply where social Insurance benefits were available® 215 A consensus of poraonal Interviews indicated that for purposes of group participation it is important to know the number of spouses who are also working, not de pendent members of the health plan group, who also have health plan insurance through another employer. This helps to justify at times a less than desired degree of participation. Membership elsewhere under certain plans can be deducted from a percentage participation requirement for a group. Many plans studied on an individual basis required that there be 75 per cent participation by the entire group of potential subscribers in order for the plan to become operative. Thus, if potential subscribers have spouses working elsewhere who have health plan cover age which includes the potential subscriber, such should be noted, and that potential subscriber may not count as a non-participant in attaining the necessary percentage of potential or actual participants In the health plan who had spouses working elsewhere also covered by health insurance or who had the potential subscriber in the cur rent group covered with health insurance purchased else where. Conferences indicated that it may be well to know the female content of a health plan group and whether that female content is covered under the husbands’ health plan elsewhere in employment. Only one respondent to the 216 sample revealed that it would be Important to know the female oontent of the group* A review of the related literature revealed that If there la a conversion privilege this privilege should be examined In terms of Its oancelablllty* How easily can converted Insurance be cancelled? What stipulations are provided? The cooperating agencies responded to the Item by pointing out that 75 per cent of the plans were cancel- able* Special coverage There is certain coverage that can be a part of a health plan that may or may not be desired depending on the composition of the group. Since these items generally do not affect the basic provisions of a health plan they have been treated under a special section* Maternity care may or may not be provided as a separate benefit in a health plan. If provided, would there be a dollar limit or no dollar limit at all speci fied? Would dependents be given the seme benefit provi sions? Would there be a separate allowance given for Caesarean or ectopic pregnancy? The preponderance of the replies to the sample indicated that the same maternity benefits given to subscribers were also given to depend ents* An intensive study of health plans points out that 217 if the dollar limit on maternity care was fairly email then the health plan may want to provide an extra dollar allowance for pregnancy complications* In the oase of maternity benefits, a number of individual plans studied Indicated that there were plans which provided for payment for only a specified number of days* In this case the subscriber would pay for the ex penses Incurred after the specified number of days* How ever, where there are complications with a pregnancy, the related literature revealed that provision can be made for extending the number of days covered, or the dollar amount, to provide more protection in the maternity cov erage area. Health plans studied and reviewed revealed that suoh plans could have a separate accident rider. This was rather common in basic service type plans and was blanketed in on major medical types In a majority of cases* If a plan had a $300 separate accident rider then this amount was used first for any expenses connected with an accident before other benefits for hospital, surgical, or medical were used. Por a nominal sum It constituted a de sirable feature In basic plans or perhaps as a special provision of a supplemental major medical plan where no deductible or co-insurance would apply. Fifty-seven per 218 cant of those plena In the questionnaire sample indicated that they had a separate accident rider* A review of the literature revealed that waiting periods for special provisions of a health plan should be examined carefully* The waiting period can be a protec tion to the health plan costa and generally to the sub scribers* In the wrong places it can be a detriment to good health plan benefits* A result of study of many plans indicated that one of the most common waiting peri ods was In maternity cases* This was commonly Indicated as nine months in the responses to the sample* A study of plans and results from personal inter views revealed that a plan can provide for payment in a sanatorium for tuberculosis or cancer treatment* In this connection, special dollar limits may or may not be writ ten into a contract for dread diseases such as cancer, tuberculosis, polio, or similar diseases which would not be the same limits as the over-all health plan dollar limit* A preponderance of the plans sampled Indicated that the dread disease area was blanketed in with the over all dollar limit* An examination of many health plans showed that life Insurance benefits may be provided as a special fea ture of a health plan. The cost on a group basis was found to be quite nominal and conferences with insurance 2X9 company executives revealed that such benefits could be tied in nicely with an over-all health package. In the type of coverage discussed in this chapter, life insurance was not eoassonly a part (in only 20 per cent of the oases) of the health plan. The dollar amount of life insurance coverage can of course extend to any amount. Usual amounts as revealed by an intensive study of selected plans ranged from $1000 to $10,000 and varied in cost according to in come. The respondents to the study indicated that where life insurance was provided it was preponderantly on a term basis. Personal interviews revealed that another feature of the life insurance program that can be added to a health plan is the provision for paid-up life insurance if a subscriber should become totally disabled before reaching a specified age (i.e., sixty years old). This can bo done without any cost, or at a modified cost to the employee. Two cooperating agencies indicated in the sample that they provided this coverage. Life insurance benefits can extend to dependents, depending on the desired coverage. In the current sample no respondent reported that their plan provided for life Insurance coverage for a dependent. A review of a number of individual plans showed that life insurance coverage ©an provide for conversion 220 to an Individual plan should the subscriber leave the group* or provide for conversion by the spouse if the sub scriber should be deceased, A review of the literature revealed that acciden tal death and dismemberment coverage is another special feature that can be made a part of the health plan pack age, In the majority of oases sampled (75 per cent) this special provision was not a part of the health plan. Such a special coverage provides for a dollar amount for loss of limbs or parts of the body, or a sum payable in case of accidental death while on the job. Of the health plana studied Individually in this area of coverage, the amount of accidental death benefit ranged from $1,000 to $10,000, The related literature and a study of individual health plans pointed out that accidental death and dismem berment insurance coverage may or may not provide for oc cupational surgery only, non-oocupatiorial only, or both® Still another special feature to a health plan as revealed by the studies can be an income benefit coverage for loss of Income due to accident and/or siokness. This may or may not supplement the social Insurance (State Workmen1 s Compensation Insurance), A study of many plans revealed that such a provision may Include payments only for total disability or may include payments to be made after the lapse of a specified number of day® away from 221 the job for sickness and/or accident. The number of lapaad days can be either the same or different depending on whether the abaence from the job ia due to sickness or accident* Income payments may be made for a specified number of weeks* Twenty-eix weeka aeem to be the trend of individual plana atudied* Coverage for aiokneaa and accident income payment provisions may apply only to sick ness and accident while on the job or it may be for aoci- dent or sickness either on or off the job* Health plana sampled in thia area had sickness and accident lnoome pro visions in only 20 per cent of the cases* In the area of accidental or sickness benefits* in addition to stipulating the number of weeks that pay ment will be made for loss of income* a review of many plana indicated that the maximum amount per week may also be stipulated* Those plans studied on an individual basis ranged from #40.00 par week to #140.00 per week depending on the provisions of the benefit* Thia amount may be the same for all employees under the special provisions of the health plan or it may be graded according to the weekly earnings of the eag>loyee. Studies of many plans revealed that the benefits under thia coverage may or may not ex tend to conditions of pregnancy, depending on the wishes of the group* 222 It la possible to provide for retired personnel who were active subscribers In the health plan to receive the same benefits available to an aotlve employee at no additional coat* This* however* la not at all the common practice found in surveying the literature* In this re gard* one studying the health plan coverage needs to de cide whether coverage and price will remain the same for retired employees* coverage less and premium cost the same* or comparable benefits with a higher cost factor* A study of many health plana pointed out that in cases where retired employees participate under th© health plan there is usually some stipulation that the retired em ployee* to be eligible as a retired employee for the health plan* must have been employed as an active employee for a specified number of years* or have worked a specified number of hours* Also* while participating In a health plan as an active employ©©* if the hours worked temporar ily, and only temporarily, dropped below the stipulated minimum for qualifying for the health plan, there should be someone (i.e.* committee) who could allow the employee to remain in the health plan* Half of the plans sampled indicated that the same benefits that were available to active employees were also available to retired employees* Ho cost figures however were obtained for similar cover age* This type of coverage area of basic service and 223 supplementary major medical has not generally provided for comparable retirement benefits* Ambolanoe benefits under the health plan consti- tute a special benefit that is generally provided for in health plans of the type discussed in this chapter* The trend, as evidenced by the sample, indicates that a dol lar amount (#25 •00 maximum) on a per trip basis was pro vided* However, the dollar amount could be on a per dis ability basis also, as reported by one respondent to the questionnaire* A health plan can limit this coverage to a certain physical boundary area such as to city limits, and so forth* If a deductible is present in a health plan, cer tain individual plans studied provided that the amount spent for drugs and medicines outside of the hospital should apply only in part on the over-all blanket deduct ible* An example would be that the first #30*00 spent for drugs and medicines outside of the hospital should not apply on a #100 blanket deductible for the major medical portion of a health plan as discussed in this chapter* This concept as evidenced by a review of many plans la fairly new in individual health plans and may gain more favor as time develops* Health plans of the type discussed in this chapter in the questionnaire sample do not provide for drugs and 224 prescriptions at reduced member coat in any plan* As in the case of drugs and prescriptions at re duced cost, furnishing eye glasses at reduced cost was not found in any health plan of the type discussed in this chapter in the returns from the sample* All plans sampled by the questionnaire provided benefits for congenital conditions* This seemed to be covered by the basic service plan while in the hospital and supplemented by the major medical plan when necessary* Home calls may be limited to a certain physical boundary area such as city limits or a specified number of miles from a certain point. Individual plans studied of the type discussed in this chapter indicated there was no area restriction usually in the basic or supplemental major medical plans* Health plan coverage for mental or nervous dis orders la another special area of benefit* A study of plans revealed that in this area of coverage the basic service plans preponderantly did not provide benefits be yond diagnosis* Supplementary major medical coverage was usually limited in some form or another* Pull cost cover age could be provided but usually was not without the limitations discussed above. A dollar limit may be pro vided per confinement. In all cases sampled, payment was 225 limited to recognized hospitals and not extended to sana- toriums or rest homes* This is an area that was difficult to control, according to those interviewed, although many believed that there should be some provision for coverage including shock treatments in the doctor's office* Dental coverage No dental coverage was found In the sampling by questionnaire of health plans of the type discussed in this chapter. For that reason dental plans will be dis cussed at the end of Chapter VII which deals with compre hensive major medical coverage* Chapter Summary Of the types of health plans discussed in this study the one developed in this chapter is the most prev alent. The basic service type of hospital and/or medical health plan, many times superimposed with a supplementary major medical, has found much popularity throughout the United States, as revealed by the literature* In the discussion of all content areas the chapter breaks down the topics of discussion into hospital, surgi cal, medical, diagnostic X-ray and laboratory (inclusions and exclusions), general coverage, special coverage, and dental coverage* 226 The hospital coverage included two basic areas; namely, room and board and ancillary services* Some cov erages included out-patient care in the hospital and other special provisions also discussed in this chapter under the hospital coverage section* Topics such as the provi sions for the anesthetist, what constitutes emergency care, what degree of coverage not only in days but dollars is provided, and what waiting periods can be expected were all developed under this section* The surgical coverage provided by a health plan is predominantly provided by a fee schedule for the basic service portion in this type of health plan* In the pre ponderance of plans studied and sampled, dependents were served by the same fee schedule and a differential was not made* In the area of the supplementary major medical plan a fee schedule was rarely found to exist as the plan re lied on what was a current and reasonable fee In the area* This latter designation though has run into some difficult problems between Insurance companies and professional med ical groups. The renewing of surgical benefits under the basic service plan and/or supplementary major medical plan was discussed as well as the use of deductibles and co- insurance factors* Medical coverage under the basic service and/or supplementary major medical type of plan was usually quite broad with the major medical portion providing for much of the coverage outside of the hospital* In recent years, the nonprofit service type of plans has expanded its cov erage in this area, but as yet it is generally not as com prehensive as the supplementary major medical plan of in demnity carriers. Medical coverage in the office or home in a major ity of plans studied has a number of limitations and con trols due to the abuse that can be rendered to more blanket type of coverage. The us© of the deductible or corridor in the supplementary major medical plan in conjunction with the basic service type of plan is an attempt to control, among many factors, the home and office area. Diagnostic X-ray and laboratory coverage, including or excluding specific treatment, was discussed in some de tail In this chapter. In summary no attempt will be made to enumerate the many and varied areas of inclusions or exclusions of coverage. Suffice It to say here that a per son or group making a study of health plans must know what benefits are available or excluded, especially In thia area of coverage. The section set out as general coverage in this chapter has attempted to establish guidelines of benefits applicable to all sections of coverage. The use of high or low options, the various types of personnel and how 228 they fit into a health plan, conversion privileges, retire ment provisions, pre-existing conditions, voluntary or com pulsory selection, various leaves of absences and their special Inclusion under this type of plan, and excess in surance clauses were all discussed to render specific trends and developments in these areas* Special coverage in the areas of maternity, acci dent riders, life insurance benefits, death, and dismember ment provisions, sickness and accident Income provisions, and ambulance provisions were set forth in this chapter* As in other chapters, the questionnaire in the Appendices (Appendix A) can be of help as a supplement. CHAPTER VII COMPREHENSIVE MAJOR MEDICAL (FIRST DOLLAR) COVERAGE Introduction Thia type of coverage la allied with the supple mentary major medical coverage given recognition in the preoeding chapter. However, this type of plan has pre dominantly been purchased as a package unit in the health plan field and has not been, in a preponderance of cases, a supplement or superlmposltion on other types of health plans. It, in Itself, is as the words indloate, compre hensive in its own right and usually has found many pa trons In industry and governmental units. Such a health plan is on© of the two major federal government service- wide type of plans available to all federal government em ployees. It therefore will be treated separately for the purposes of this study. Case studies and a review of the literature reveal that one of the major difficulties of this health plan is not the rather adequate coverage it affords, but the lack of effective controls which results in abuses of benefits 229 230 and oharges. Thus, in some groups, It haa bean found nacaasary either to contlnua to reatrlot the banafits or to lnoraaaa the premium rata a substantially over a rather ahort period of operation* Pattern of PresentatIon As In the praoedlng chapter, this chapter will present the data regarding comprehensive major medical coverage by sections, aa developed in the questionnaire* The sections are: hospital coverage, surgical coverage, medical coverage, diagnostic X-ray and laboratory cover age (inclusions and exclusions), general coverage, special coverage, and dental coverage* Hospital coverage A study of many health plans of this type Indi cates that many pay a flat sum, such as $500, for hospital expenses of room and board and ancillary services and then a co-insurance faotor beyond that point up to a dollar limit; for example, 80 per cent of ail above $500 up to $1,500, or up to the maximum limit of the entire policy* However, some policies of this type pay 100 per cent of all hospital expenses or the first $1,000 which, except in heavy expense areas, usually covers all hospital ex penses* A review of the literature points out that a 831 number of this type of health plana haa limited the amount per day that vlll be paid for room and board* Thia may vary depending on the looallty and the hospital rates In a particular looallty* However, alnoe the health plan la usually designed to provide payment over a large geograph ical area, the amount for room and board is usually sub stantial* The findings through the questionnaire revealed that in 67 per cent of the oases reported, nursing ex penses in the hospital were covered by the comprehensive type of health plan. Those health plans that were given intensive study revealed that nursing expenses incurred in the home were not oovered in the preponderance of plans. Payment for the administration of anesthetlos in the hospital was oovered in full by two-thirds of the health plans of the comprehensive type reported by coop erating agencies. There may be a dollar limit beyond the over-all policy limit in some oases as evldenoed by a study of individual health plans; although, from this study it was not found to be a majority trend* Questionnaire responses revealed that health plans of the comprehensive type had no limit on room and board payments per day and no dollar limit on other hospital expenses per day. The returns also indicated no dollar limit on each disability for all hospital expenses. A 232 review of a select number of health plans indicated that in a minority of plans there were dollar limitations in this area of ooverage. When the above oonenti discuss dollar limits such limits are spoken of beyond the over all policy limits. Dependents in the covering of all hospital ex penses were found in all plans reported to have the same benefits at the same cost as subscribing employees of a group. However, in conferences and interviews, it was pointed out that it was not uncommon when necessary to out premium rates to reduce dependents* benefits in the hospital benefit area. There were no comprehensive health plans reported that plaoed a dollar per day limit for treatment reoelved at the hospital for medical services (beyond the over-all policy limit). Such plans reported did Include payment of doctors* or nurses* fees while the patient subscriber Is in the hospital. An extensive study of selected health plans revealed that some health plans plaoed a dollar limit per day on doctors* and nurses* payments or in some cases per disability or provided for total payment of doc tors* and nurses* expenses while at home. Anolllary (other hospital) services in those oases reported were not lumped in with the coverage for hospital room and board* Prom study of plana and personal inter- views, It was indicated that the ganaral rule la to sep arata such expenses and perhaps apply a different dollar per day limit for ancillary services if a limit is im posed on the room and hoard benefits. Interviews with underwriters revealed that it has been generally assumed that expenses in the ancillary area would not run as high as the room and board expenses* This, however, not always proved true through aotual health plan operation* When the room and board expenses have been exhausted, there can be a tendency to load up the ancillary expense account* However, the study of plans pointed to the trend that gen erally if the room and board area has a pattern of co insurance, 100 per cent payment, and so forth, it is fol lowed in other hospital expenses sometimes using different percentage and dollar amounts* A study of many plans revealed that hospital bene fits were renewable for related and unrelated conditions usually after a specified number of days of hospital dis charge, return to work, or when a doctor* s statement pro nounces complete recovery* If a number of days after dis charge from the hospital is used, it is usually a minimum of S O days and is not a rarity to run as high as 90 or ISO days* The responding agencies to the questionnaire re ported in all oases the benefits were renewable when the subscriber returned to work* 234 A study of selected health plans reveals that the comprehensive type of coverage has in most oases applied the same standards disoussed In the previous ohapter In determining when a subseriber is classed as a hospital patient* The most common criterion indicated was if the subscriber is considered a registered bed patient exoept in accident oases he is in fact a hospital patient. How ever. the number of hours in the hospital, or if an emer gency. within a specified number of hours from the time the emergency began, were reported aa limitations in one plan. A review of the literature evldenoed that the top dollar limit of ooverage for hospital benefits may vary from health plan to health plan. However, the #10.000 figure was used in a large number of plans. A study of the federal government comprehensive plan revealed use of #35.000 as a top dollar limit. This looms largo but as conferences with health experts revealed, the top dollar amount is not as important as may be thought at first blush. This is further discussed in Chapter IX. The top dollar limit in the plans reported by the questionnaire was for the lifetime of the policy rather than for a specified period of time. The trend from the health plans studied seems to indicate that the amount is usually for the lifetime of the policy with an option to 235 reinstate the full amount after a specified sum has been expended (i.e., $1,000) provided the subscriber can fur nish the carrier with evidence of good health* All health plans reported by the cooperating agen cies indicated that out-patient surgery was covered* All respondents to the questionnaire reported that a subscriber who is hospitalized at the time the health plan is put into effect must return to work or be pro nounced recovered by the doctor before beooming eligible for further benefits under the health plan* However, there were plans studied that have extended benefits to a person then hospitalized just as soon as the health plan was instituted by the subscribing group* All health plans reported provided for a separate co-insurance factor for ancillary services, surgical ex penses, or doctor’s calls in the hospital. A review of the literature revealed that a completely comprehensive type of plan would probably not provide for co-insurance or even a deductible here* In-hospital well-baby care during the mother1 a confinement or beyond the mother’s confinement after birth was provided in two-thirds of the health plane reported by cooperating agenoies* There were no plans reported by the respondents to the questionnaire where expanses, while in the hospital. 236 were treated on a per confinement basis with a top dollar limit less than the top dollar limit of the entire plan. There was not a distinction made In dollar bene fits providing a different payment for an anesthetist depending on whether the operation is classed as a major or a minor one In the plans reported by the questionnaire. No responding cooperating agency reported a plan where a relative value study (schedule) was used; although an Individual study of many places did Indicate In a very small number of cases that such a study (schedule) was be ing used. The removal of tonsils and adenoids, under this type of health plan, did not bear any dollar or day re strictions as reported by the questionnaire. The same results can be reported for any limit of doctor’a calls In the hospital per Illness. There were no restrictions indicated® The findings from conferences and personal Inter views point out that admission to a hospital, under com prehensive plans, many times requires cash deposits, as such plans are indemnity in nature and reimburse the sub scriber and not the hospital. However, there were health plans of this type using Identification cards which many hospitals will accept in lieu of a cash deposit. 237 All responses to the questionnaire revealed that hospitals allow admission by assignment of expenses from the subscriber to the hospital* This can be accomplished by the use of a very oomnon assignment form and was per mitted under a number of individual plans of this type studied* Surgical coverage Respondents to the questionnaire Indicated there were no special cash deductibles or co-insurance factors applied to the surgical portions of the comprehensive coverage that are not considered blanket for the entire policy* The comprehensive health plans studied, both by the questionnaire and individual approach, recognised surgical expenses only by duly licensed physicians and surgeons* If a subscriber were classed as an out-patient and needed surgery in the hospital, two-thirds of the re spondents Indicated that coverage would be provided just as if the subscriber were hospitalised. An Intensive study of Individual health plans revealed that In a broad comprehensive health plan this would, in over 50 per cent of the plans, be the case. Certain special co-insurance or deductible features may more likely be attached to thin 238 type of benefit than to benefits In other areas* Speciflo fee schedules under this type of cover age vers evident In S3 per cent of the plans reported. Conferences and personal interviews Indicate that this area of benefit Is where the Relative Value Study (sched ule) stands out as a type of schedule that oan be most acceptable to doctor and carrier. Study reveals also that this is an area of much controversy In determining what Is a reasonable charge and what legal grounds the carrier has to resist a doctor's (surgeon’s) charge which he feels is excessive. Mo replies to the questionnaire pointed out that schedules were provided on a disability basis or per con finement basis. Fee schedules for dependents were found by th© questionnaire results and individual study to be th© same aa those for th© subscribing employee. Surgical benefits, as renewable for related or un~ related causes, were reported as not applicable to the plans reported on by the questionnaire respondents. How ever, an intensive individual study of many health plans revealed that where auoh provisions are applicable, bene fits are renewable upon return to work, after a specified number of days, after complete recovery is declared by a licensed doctor, or in a few cases, immediately after th© 239 surgery. A majority of the personal Interviews revealed that slnoe there are occasions where further surgery would be necessary for an Illness or accident, a good comprehen sive plan will not want to restrlot too closely benefits for follow-up surgery that may be necessary. When more than one operation is performed at one time, how should the surgeon* s fee and other expenses be handled? Would the fee be paid for the highest cost operation only? For the highest cost operation plus one- half of the lesser coat operation In terms of the fee schedule? No applicable response was obtained from the questionnaires but a study of the related literature in dicates that payment recognition In some form for more than one operation may be desirable. The trend of plans studied indicates that surgery outside of the hospital is covered by this type of health plan provided the surgery is performed undor the direction of a licensed doctor. However, in some plans, deductibles or co-insurance features were found to exist. The type of surgical services performed In the hospital, whether or not the surgery was performed in the hospital, has not, in plans reported by the questionnaire or individual plans studied, restricted the benefit or reimbursement. In fact, the result of conferences and interviews pointed out that this Is an are® where the 240 placing of auoh restrictions has In some cases created a deliberate abuse of hospital confinement such as the diagnostic X-ray and laboratory for hospitalisation only* Medloal coverage Would payment for medical treatment benefits for dependents begin on the first day of illness? Would this be the same for the subscriber employee? No health plan reported by the results of the questionnaire or health plan studied individually revealed a waiting period for dependents before benefits began for medical treatment* For purposes of determining benefits, when does one sickness end and another begin, even though it may be the same sickness? No health plan reported by the ques tionnaire indicated this point to be applicable. Health plans studied individually evidenced that there is a period of time laps© required between treatments, usually from thirty to ninety days, before the same type of sick ness would be considered a new illness* The result of conferences and personal interviews revealed that this consideration is important if the benefits are put on a per sickness basis and yet if the same illness should later "reoccur” much would depend on whether the health plan would consider the reoccurrlng illness as having only exhausted existing benefits or create a new sot of b©n@» 241 fits for the protection. In selected plans studied In dividually, what constitutes the cessation of treatment? Would the presenoe of a doctor be necessary to consider the Illness still under treatment? The majority of the plans studied Indicated a doctor must be In attendance. Payment may be made for more than one treatment per day by all the health plans of this type studied by questionnaire response. However, less comprehensive health plans revealed by Individual study restrict the treatment per day to a specific number of treatments in order to limit benefits. The results of Intensive plan study evidenced that health plans of this type have as one of their sell ing points the use of any recognised licensed physician. Therefore, the type of plan does not provide for member doctors. Such plans do not use the group practice pro- cedure of limiting doctor selection to a membership® There was no comprehensive major medloal plan reported by cooperating agencies that placed a per calen dar year dollar amount restriction on the number of medi cal oalls and medloal care for home, offloe, and hospital. However, Individual health plans studied did place such restrictions In their plans in order to keep the usage of the health plan within reasonable bounds. 242 The type of ooverage deemed comprehensive major medical first dollar coverage did place a dollar limit on out-patient diagnostic oare In 67 per cent of the plans re ported. Conferences and personal interviews revealed that if a dollar limit Is placed on this coverage* It should be a reasonably liberal amount* otherwise subscribers are en couraged to use the hospital for this servioe and thus there has been created an abuse potential* Plans of the type dlsoussed in this chapter which were under study, both individually and by questionnaire* all provided for the use of specialists as part of the health plan1a benefits. Suoh use of specialists was not made a special deductible or co-insurance feature and as a trend was included in the routine benefit payments. Making special provision for charges in a sohedule of charges, if a dootor must spend long detention with the patient* was found in 50 par cent of the health plans studied by the questionnaire. Of plans studied individ ually, the preponderance did not make special provisions for such a charge. Visiting nurse services were provided under the health plan benefits of a comprehensive major medical plan in 50 per cent of the responses to the questionnaire. A preponderance of the individual plans studied provided for such services. Special co-insurance and deductible 243 features may be applied to doctor1 a calls In the hospital* doctor's calls at home* or patient1a calls in the offloe as found from a study of individual plans* Such a study also revealed that when controls were plaoed in the plan they first centered around the patient's oalls at the office* on a two or three visit deductible basis* Medical service inside the hospital or outside of the hospital was not beset with deductible or oo-lnsuranoe features of a special nature (other than a possible blan ket type for the entire plan) in all cases reported by the questionnaire* Such a finding was In prominence also in the individual plans studied. Some medical portions of a comprehensive health plan individually studied provided for a per cent of out- of-hospital expenses over a first dollar limit and up to a maximum dollar limit each year (i.e., 80 per cent for out^of-hospital expenses over the first $50o00 up to $1,000 a year). This provision was not applicable in any of the questionnaire responses® Diagnostic X-ray and laboratory ooverage (Inclusions and exclusions) A study of many individual plans revealed that exclusions were relatively few in the comprehensive first dollar major medical coveragea* 244 Drugs and medicines in the hospital were, in the Individual studies made, found to be included in the avail able benefits without exception. Physiotherapy, hydro therapy, X-ray, radium, rental of orthopedie, therapeutio, prosthetio devices, as well as related equipment were all Included in the benefits of those plans studied Individ ually. Questionnaire returns indicated that half of those reporting provided this benefit; one-half did not* All plans individually studied and results of the questionnaire revealed that social lnsuranoe and expenses in government hospitals or at government expenses were excluded from coverage. Injury or sickness resulting from an act of war or services performed by the immediate fam ily were excluded in only one-half of the selected ques tionnaire responses. The preponderance of individual plans studied did exclude these benefits. Coverage for eye glasses, refractions, and hearing aids, except when due to an accident, were predominantly not provided by individual plans studied. Such benefits were provided in one plan reported by the questionnaire resuits. Cosmetic surgery, not necessary due to aocldent or repair, and personal comforts in the hospital or at home such as radios, television, beauty and barber serv ices were found to b© excluded in all those health plans 245 studied individually. The trend in the comprehensive type of major medloal plan vas to provide for mental and nerv ous disorder coverage beyond diagnosis. Two plans, ac cording to the questionnaire, provided for this ooverage. Prescribed pharmacies were required in all those health plan returns as reported by the questionnaire of the type discussed in this chapter. Dental examination or treatment including dental surgery not necessary for a repair was excluded from all plans individually studied and reported by the questionnaire. Eye examinations, routine physical check-ups, hos pitalization purely for diagnostic studies, rest and con valescent care, rehabilitation care, and general pro and post operative care, were prominently excluded from the comprehensive major medical plans studied individually. One plan reported by the questionnaire returns provided coverage for diagnostic studies and rest and con valescent care. Drugs and medicines used outside of the hospital were reported as included in the benefit in one-half of the plans reviewed by the questionnaire. Of the individ ual plans studied, a great number of plans made provision for this coverage. Surgery for normal maternity, dietary service, X-ray and routine laboratory work, general and special 246 nursing care, operating room expenses, cystosoopio room, splints, oasts, dressings, and anesthetic supplies were all Included in the coverage of comprehensive major medl oal health plans reported by the questionnaire. In indi vidual plans studied, special nursing vas singled out for different treatment putting a time or dollar limit on the benefit in a few select plans. Treatment for allergies, like special nursing, was found in the individual study of health plans of this type In a few select cases to have certain time or dollar limitations. Therapeutic injections, intravenous injections, hypodermics for sedation, oxygen, basal metabolism, whole blood and blood plasma, oxygen equipment rental, contagious communicable diseases requiring isolation, and diseases medically determined to be incurable were all available benefits as indicated by respondents through th® question® nalre. Sterilization treatment and circumcision were ex cluded in all plans surveyed by the questionnaire. Travel recommended by a physician and expenses for custodial care without specific medical treatment were ex cluded by half of the plans reported by the questionnaire. The majority of Individual plans studied excluded these areas of coverage. 247 Electrocardiograms, diathermy, heat treatments, whirlpool baths, medloal or surgical oare In the hospital for conditions not usually treated In the hospital, such as common colds or minor outs, treatment of venereal dis ease, and treatment for orthopedios were all benefits covered without special limit In health plans reported by cooperating agencies through the use of the questionnaire. Treatment for frigidity, impotenoy, treatment for Injuries reoelved while engaged in committing or attempt ing to commit a felony or wrongful act involving moral turpitude, armed service-connected disabilities, Injuries resulting from engaging in a riot, and attempts at suicide or intentionally inflicting injuries or illness were in over 50 per eent of the plans reported not excluded. Alcoholism treatment and conditions resulting from a major epidemic or disaster were covered as benefits by responding cooperating agencies, Hyperopea, myopia or astigmatism were conditions excluded by all comprehensive major medical health plans studied individually and through the questionnaire. General coverage Health plans studied Individually and by the ques tionnaire of the type discussed In this chapter did not In a single case provide for a high option or low option 248 provision except for the federal government health plans* All health plans of the type discussed In this ohapter reported by the cooperating agencies In the ques tionnaire provided special provisions for payment of emer gency transportation by any common carrier to a specific hospital for special treatment* Coverage of dependents* including spouses* followed the same pattern as was discussed In the preceding chapter in benefit coverage* No effort will be made here to again express the variables and common practice* After termination of an employee the questionnaire returns reported coverage in all cases for conversion to an individual policy under this type of health plan* An individual atudy of health plans found a predominant num ber that did not provide for conversion to individual health plans with any marked degree of comparable cost and coverage* Any illness treated while under the group bene fits would receive continued coverage for a period of 90 to 730 days after termination of the health plan year or the exhaustion of a top limit sum whichever occurs first by those plans reported on by the questionnaire. Under the benefits of the comprehensive major medloal plan there is another rather unique restriction that was present in less than half of those plana studied® If a subscriber has an illness and over a specified period 249 of time (90 days) there is no treatment for this illness as indicated by the spending of a designated sum of money, then the benefit period for this illness ceases. This, through Investigation by conference and interview, was stipulated to prevent the long-term charge for an Illness that may reoccur at rather distant intervals. This re quirement is also to cut off small incidental oharges that might cost more to prooess administratively over a long period than the reimbursement itself. A very few of the health plana individually stud ied provided the maximum dollar amount of the plan to be per disability rather than for the entire health plan ex penses with no limit on number of disabilities. All re turns from the questionnaire showed only expenses incurred after Joining the plan would serve to satisfy any deduct ibles. Findings by conference and interview revealed that placing a maximum dollar amount per day or week for treat ment in the home or at the doctor's office can provide a control of an expense that could otherwise be difficult to manage. This limitation was not found in any of the com prehensive plane of the type referred to in this chapter that were reported on by the questionnaire. Regarding who may be eligible for the health plan, all questionnaire returns indicated that an employee must 250 work full-time or be employed on an average of a specified number of hours a week (i.e., 20 hours) In order to be eligible for the health plan coverage* What happens If an employee does not join at the Inception of the health plan? There Is a thirty to sixty day waiting period to Join after the Initial opening of the plan in the majority of individual plans studied. What if the subscriber does not join at the end of the waiting period? Fifty per cent of the plans reported by cooperating agencies required that the subscriber or de pendents must then wait a specific period of time to Join. This time limit has ranged in the plans studied from thirty days to one year* In a small number of plans stud ied, a physical examination was required if the employee or dependent failed to Join when he had the first oppor tunity. This, according to Information obtained by inter view and conference, was to prevent the potential sub scriber from waiting until he has a major health expense before joining. Health plans of the comprehensive type in those cases reported by the questionnaire did not make a differ entiation in the number of benefits or premium rate based on the employee1s income* This trend was also confirmed by a study of Individual plans. 251 Individual health plans studied of the comprehen sive major medical type did not normally have compulsory provisions, particularly when the entire cost was not being paid by the employer* Leaves of absence with or without pay have result ed in coverage for a specified period of time under com prehensive health plans studied. These time periods range from thirty days to one year, with the frequency being six months or less time. Conferences and interviews have pointed out that this Is an Important benefit for a group to consider as there may be groups with considerable movement In the leave of absence area that should be en titled to health plan coverage as long as premiums are paid. The questionnaire returns indicated that in every case reported the cost of a leave of absence premium was shared between the employer and subscriber. This type of plan did not provide for complete preventive, continuous, diagnostic, and rehabilitation ©are in the greatest number of cases Individually studied. The broadest of the health plans in this area do provide for some of these benefits, but such plans may be hard to maintain at present level of benefits and premium rates according to consultants Interviewed in the field. There is no effective control by the carrier, the subscriber, or th© employer of general health charges and over- 252 utilization* Findings from a study of individual plana reveal that tha comprehensive type of health plan has less in the way of built-in abuses because there are fewer restric tions than other Indemnity types of plans. However, as evidenced by consultants, the unoontrollable abuse poten tial by subscribers, doctors, hospitals, and other related staff make this type of plan difficult to maintain at an original level of benefits and rate structure. Coverage outside of the United States, anywhere in th® world, is a pleasing feature of the comprehensive major medloal plan. Restricting coverage to certain re gions or areas was not found in any plan of this type studied individually or by questionnaire. Use of licensed doctors under this type of health plan was unrestricted in the study of plans made both in dividually and through the us© of the questionnaire. Surcharges may be found in the comprehensive plan. Their control use, unless the amount of the surcharge is substantial, can be outweighed by the oost of processing the paper work connected with the charge. If the amount of the surcharge is substantial, then the comprehensive feature of the health plan is somewhat defeated. The use of surcharges was not a prominent trend in this type of health plan. This was found to be true In th© many 253 Individual plana studlad and in response to the question naire* As Indicated in the preceding chapter under a different type of plan, an employee cannot under this type of health plan be a member of the health plan as an employee and as a dependent* This was found predominantly to be the case In the number of health plans studied of the type discussed In this chapter as well as In the plans reported by cooperating agencies* The right of subrogation exists under a minority health plan of the comprehensive major medical type stud ied Individually* The right of subrogation exists In cases where the subscriber has oertain rights of recovery or collection against third parties as a result of In juries or sickness paid for by the subscriber's carrier* The oarrler oan assume the rights of the subscriber against th© third party for recovery to the extent of th© amounts of the dollar benefits received by the subscriber from the health plan* The health plan of this type, by individual plan study, provided for benefits to a person on authorised leave of absence with or without pay who has become total ly disabled provided his premiums have been paid* Plans reported by the cooperating agencies through the question naire did not provide for this benefit beyond the 90-730 254 day period of time previously mentioned in this chapter. Quality oontrol provision* have not been main tained in this type of health plan as determinsd by re sponses to the questionnaire* The lack of adequate qual ity control is an inherent and serious weakness of this type of health plan as developed by a review of the re lated literature* No health plan studied individually, and only one reported by the questionnaire required a physloal examina tion in order to initially Join the plan. Conference and Interview summaries indicate that this would seem to be the trend as long as pre-existing conditions are to be covered and a substantial waiting period is required to subsequently Join the plan if the person did not do so Initially. A majority of plans of this type individually studied did not exclude a duplication of benefits or pro vide for an excess insurance clause* However, conferences with underwriters and claims men indicated that a majority of major medical plans now have an excess insurance clause* Providing for well-baby care in the doctor* s of fice has been a benefit found in 50 per cent of the health plana of this type reflecting questionnaire returns* Con sultants interviewed indicated that the extent of coverage for this area will depend on how complete a desire there 255 is for coverage for maternity ears* A study of Individual plans revealed that if there Is a maternity benefit, there is usually a restrletion on the number of oalla the mother can make with the baby within a speoified number of months (two to three months) after the baby's birth* If there is converting coverage, how can that coverage be cancelled by the carrier? This finding from conferences and interview* is an important point to re solve* As In the preceding chapter, when a certain per centage of the potential group Is required to join the health plan in order to institute the plan, consultants interviewed declared it was Important to know how many of the subscribers1 spouses who are working elsewhere also have health plan ooverage* This would also Include how much female content there is in the potential group of subscribers, and also if they are covered under © health plan by reason of their spouse working elsewhere* Such membership elsewhere in the case of the California Teach ers Association* a basic Blue Cross plan allows membership coverage in other Blue Cross programs to be deducted when counting eligible potential membership* Health plans can provide reimbursement for ex penses for use of practitioners other than doctors li censed by a governmental licensing agency* Hov/ever, no 286 Christian Science practitioners or other similar prac titioners were allowed under health plans of this type studied by questionnaire. One plan individually studied did allow Christian Scienoe practitioners* As in the preoedlng chapter, the trend of compre hensive major medical plans was to provide that expenses Incurred during the end of one health plan period (usually three montha) could be applied as satisfying the deduct ible in the next health plan period* State Disability Insurance did not apply to a pre ponderance of plans studied individually; findings through personal interviews determined that they could be desig nated to oowplement or duplicate other benefits received* The use of a blanket co-insurance factor or de ductible factor was predominant in this type of plan al though the more comprehensive plan coverage provided for 100 per cent coverage up to a certain sum before th© co insurance factor or deductible commenced* These findings were evident in all returns from the questionnaire and in nearly all plana individually studied* As in the previous chapter, all health plans of this type studied individually provided broad membership opportunities and did not exclude groups of various de partments or classes* This, consultants declare, provide© for a broad base and a better over-all risk coverage« 257 Special coverage Findings from a study of Individual plans evidenced that maternity benefits under the comprehensive major medi cal health plan was found to provide more coverage than the basic type of health plan. However, such findings re vealed that such coverage was limited to a dollar amount which was not usually the same dollar amount as for a mis carriage, Caesarean, or other pregnancy complications. A review of the related literature indicated that early health plans of this type did not provide broad ooverage for mental or nervous disorders* Consultants in terviewed declared that as a rule health plans still like to avoid this type of benefit because it is difficult to control. However, coverage, as a trend, was provided up to a certain dollar maximum with a limit per visit and per confinement in health plans of th© type discussed in this chapter and reflected by the questionnaire. The number of visits were also limited within a specified period of time in a preponderance of individual plans studied. Special accident provisions are provided in this type of plan to cover expenses for hospital charges and supplies as an out-patient in all responses to the ques tionnaire. Physlciana' and nurses' fees were included in those plans reported by the questionnaire survey0 258 ▲ study of Individual plana indloatad that in the caae of an acoident there ia a time limit imposed of a apeoial number of hours after the accident ocoura for re porting for treatment to the doctor or hospital, Thia requirement, consultants interviewed indicated, not only assured that the ooourrence was an emergency type of acci dent but also prevented further health complications a- riaing from lack of imediate care. Reimburaement for treatment in all caaea reported by the questionnaire started on the first day of the aoci- dent. This was true also in the oases involving sickness® A study of individual plans and findings of conferences reveal that in oases where there are income provisions attached to the health plan, the payments for sickness and accident preponderantly start with the second, fourth, fifty, or eighth day as frequent examples. Findings from a study of selected plans indicate that there are health plans of the type discussed in this chapter that provided a dollar maximum amount per dis ability for X-ray and laboratory services connected with sickness and aocldents. This was not true of those that replied by questionnaire. The most comprehensive of plans did not plaoe a limit on this coverage but treated the illness or accident without restriction under the broad comprehensive features of the health plan® 259 There were a very few health plana studied indi vidually of the type under immediate diaouaslon that had a separate accident rider* A separate acoldent rider, consultants interviewed pointed out, can prove to be most helpful and beneficial in any health plan* As a trend of plans studied individually, the same accident benefits apply to dependents that apply to employee subscribers. All plans reported by the questionnaire required that a subscriber be insured nine months before maternity benefits begin. This was also true in every health plan individually studied. Otherwise, consultants stated, it might be difficult to control those who may have a tend ency to join only to enjoy the maternity benefits and only for the period of time that maternity benefits were needed. Under the health plans studied individually, maternity benefits were still available to a terminated employee subscriber in most cases for as long as from three to twelve months after the period of termination or to a dollar maximum limit in the plan, whichever occurred first. An examination and investigation of individual health plana revealed such plans can provide that if a sickness or accident should extend over a specified period of time the reimbursement amounts could Increase to a new dollar limit. This protects those with long illnesses and might be a benefit that a particular group would want 260 to consider. However, suob. a provision was evident in only a very few Individual plans studied. Accidental death and dismemberment coverage as well as life insurance coverage was part of the health plan package in a minority of plans Individually studied. The provisions of this coverage were discussed in the pre vious chapter and other than to say that the findings of conferences and personal Interview evidenced that such coverage should be strongly considered as part of a com prehensive package health plan, they will not be mentioned her®. Accident and slokness periodic income provisions are another special ooverage that was part of the health plans individually studied in a very few cases. This type of coverage was discussed at some length in the previous chapter and oould be integrated into a comprehensive major medical health plan much in the same way as in a basic service and supplementary major medical program. As discussed in the preceding chapter, ambulance benefits can be on a per trip or per disability basis with a dollar limit placed on either approach. With health plans of this type, evidenced by the results of an inten sive study of Individual plans, the per trip basis is the common trend. 261 Retirement provision* In the currently discussed health type plan were not reported by any of the cooperat- ing agencies sampled. A study of the related literature reveals that they can be provided either with the same benefits as active employees with no added oost, the same benefits at an Increased oost, or provided with less bene fits at the same cost as active employees. A study of the related literature Indicated that the retirement provision does Increase the cost of the entire health plan to all subscribers, but In the lcng run It can be more equitable health coverage to everyone concerned. Ho health plan studied Individually of the type discussed In this chapter indicated that a retired employ ee belonging to the health plan must have been an active employee for a specified number of years, although a study of the federal plan reveals that this restriction is pro vided. A majority of health plans studied on an individ ual basis that had provisions for retirement benefits did stipulate that as an active employee the retired person must have worked a specific number of hours per week. This stipulation, as evidenced in conferences where the item was thoroughly discussed, was to insure that only regular employees can take advantage of the retired bene fits. 262 If a daduetibia for the over-all plan or portion of tha health plan is provided, tha health plan nay pro vide that tha first of a specified sun (such as $50.00) spent for drugs or prescriptions cannot be used to satisfy the blanket or special deductible. This provision vas not reported by any sampled agency but vas found to be the case in one of the individual federal government health plans studied. No health plans that vere sampled of the type dis cussed in the current chapter provided for separate dread disease limits. A response to the sample revealed that plans of the current type did not provide for drugs and prescrip tions or eye glasses at reduced member costs. Very few plans of the comprehensive major medical type studied in dividually provided for these benefits. Depending on the comprehensiveness of the health plan, there may or may not be a provision to allov for extended benefits for complications due to pregnancy. The health plan may stipulate that it will provide bene fits for a specified number of days in the hospital or for other expenses oonnected with maternity. If complications set in, the number of days may be extended or a dollar limit may b© extended. One federal government plan stud ied provided for extended day benefits while th© majority 263 of health plana studied Individually did Make extra dollar and day allowancea for complications due to pregnancy* Home calla in health plana sampled of thia current type were not restricted by specific physioal boundary limits* Dental coverage The dental coverage questions for Chapters VII and VIII will be treated under this chapter* This is an arbi trary decision as such questions could have been treated under either of the three chapters* However, the only known dental Indemnity program is now being carried on In New York State under an indemnity health plan having such coverage features as discussed in this chapter* No health plans of this type sampled or individ ually studied, except the one mentioned above, provided benefits for dental care except as a result of an accident or Injury* However, In Industry labor and management have set up dental care programs that tend to be classed in the group practice field* Findings resulting from conferences indicate that dental plans can be provided under a trusteeship and be prepaid* Such programs should have provision for quality control which is just as vital as quality control in the rest of the health plan* A review of Individual plans of the Indemnity and 264 group practice type indicated that dependents nay or stay not be covered. In one union trusteeship plan only chil dren through fourteen years of age are covered. The American Dental Association has indicated that the dental programs may be developed through dental serv ice corporations which are formed with the assistance of the American Dental Association and/or state dental soci eties. A study of plans reveals that facilities and equip ment may b© operated on a closed panel basis in which case they may be owned by the employer or a group of dentists or they may be of the open panel type in which a dentist may be a staff member dentist and yet retain his solo praotioe. Orthodomy in those plana studied were preponder antly excluded. However, the indemnity plan now in opera tion in Hew York puts orthodomy on a control basis through a dollar limit, oo-lnsurance, and deductible factor. Findings from conferences and Interviews reveal that a relative value study schedule is important to have. The Veterans' Administration has such a schedule, and others are available to those who seek them. Full payment should be accepted for such schedules to prevent discord and maladministration. 265 Health plan consultants Indicate that thera may be an income limit for those eligible for dental coverage of the health plan* but as in the other provisions of the health plan* this is a restriction that should be weighed carefully before becoming a part of the health plan* The Los Angeles Pre-Paid Dental Conference queried* "Should more dollars be budgeted for dental care the first year to bring subscribers up to a maintenance level?" If so* this could be Inherent in the rate structure* Studies of the related literature reveal that the dental portion of a health plan can provide for waiting periods and make restrictions for pre-existing conditions* As a result of personal interviews, it was pointed out that there should be consideration given to the cri terion used in determining payment to the dentist* Will this be on an entire enrollment basis or by the number of patients the dentist treats? Both* consultant® evidence^ have their merits and demerits* As in the rest of the health plan, personal Inter views revealed that thought should be given to the estab lishment of an administrative cost celling* dollar re serves* and dollar credits* Findings from conference discussion indicated that surcharges can be used effectively in the dental portion of the health plan® Again, administration processing 266 costa would hays to be weighed. Would such a portion of the health plan be volun tary or compulsory? Many of the same cautions and com ments would apply as they did to the rest of the health plan. Would there be benefit provisions for retired personnel under the dental portion of a health plan? Consultants point out that frequency rates of treatment should be studied here as it may be that less dental cost arises in the retired bracket than during active employ ment. All consultants agreed that it would be wise to consider a claims analysis under the dental portion of the health plan. This could be done as part of the qual ity control provisions of the entire plan. Would the dental portion of the health plan in clude preventative dental oar©? How much of the plan would be based on the co-insurance principle? Findings of conferences and personal interviews reveal that there are many facets of the dental program that still deserve careful study. The entire program nation-wide is yet too new for careful and detailed anal ysis. But, as a review of the related literature reveals, studies are being made, programs are in operation, and a dental portion of a comprehensive health program emerges as essential to complete health care. 267 Chaptar Summary The comprehensive major medical (first dollar) coverage discussed In this chapter is somewhat allied with the supplementary major medical coverage discussed in Chapter VI* The basic differences lie in the less frequent use of the deductible and the oo-lnsuranoe* Also the type of health plan disoussed in this chapter broadens its provisions or areas of coverage and, as it intimates, provides for more first dollar coverage by nature of the benefits in the health plan* Findings, as a result of conference and interview reveal that this type of health plan is prominently popu lar at its outset* Where latent difficulties have arisen is in the use and abuse it has received from subscribers and professional medical personnel, which have tended to either boost premium rates, reduce benefits, or both. A study of the related literature Indicates that much of the success of this type of plan, with fewer built-in controls than others, will depend on the coopera tlve efforts and the understanding of each subscriber In the health plan group* A preponderance of the various plans studied of this type, and the majority by far of other health plans studied did not have sound and compre- 268 henslve educational programs available for the subscrib ers* As in the previous chapter* the treatment of the data In this chapter was divided Into sections* including hospital coverage* surgical coverage* medical coverage* diagnostic X-ray and laboratory inclusions and exclusions* general coverage* special coverage* and dental coverage* Briefly* hospital coverage was divided into room and board and ancillary services* The room and board was prominently covered dollar-wise for a flat sum up to a certain amount with a co-lnaurance factor applied beyond that amount* Ancillary services were* in a minority of oases studied* Individually treated In the same manner al though in the majority of plans studied Individually the coverage was more liberal in this area* Dependent coverage under this type of health plan enjoys th© same benefits in all plans studied as those of the employee subscriber* Emergency benefits did not* in the majority of plans studied* provide hospital entry restrictions* The renewing of benefits for related or unrelated conditions in the greatest number of cases required return to work* The most oommon top dollar limit for the entire plan was $10*000 on a lifetime basis* 269 A subscriber who was hosplfcalized at the time th© health plan became effective must return to work, the findings of the sampling revealed, in order to receive benefits under the health plan* This was true in the greatest number of oases* In-hospital well-baby oare during the mother* s con finement or beyond the mother* s confinement after birth was provided in two-thirds of the health plans sampled by the questionnaire* A relative value study (schedule) was not used in th® majority of cases studied both by sampling and Individ™ ual finding. Use of an assignment form for admission to the hospital was in evidence in a predominant number of cases studied and sampled* There were no special cash deductibles or co insurance features in the surgical portion of the plana sampled* Two-thirds of th® respondents indicated that coverage was provided to out-patients needing surgery in the hospital* Pee schedules were not predominantly evi dent in plans of this type, although they were not com pletely excluded* Surgery benefits found in a review of the litera ture and individual study were provided for related and unrelated causes on a renewal basis when the subscriber had been declared recovered by a licensed doctor® 270 No waiting period for subscribers or dependents was evident for medical treatment. A thirty to ninety day lapse of time following sickness was the usual rule to determine when to renew benefits for any new sickness* General praotitloners were in all cases except one required to be licensed* The one exception was to Include Christian Science practitioners* There was no restriction on the number of medloal calls at home, office, or hos pital in the cases sampled. However, individual plans studied did reveal restrictions In this area. All plans of this type provided for the us® of specialists as part of the benefits* Sixty-seven per cent of the plans reported by cooperating agencies did provide for a dollar limit on out-patient diagnostic care. Visit ing nurses' expenses were covered by a preponderance of the plans studied* Diagnostic X-ray and laboratory exclusions wore on the whole found to be less evident In this type of coverage than the former plans discussed In Chapter VI* Since there is such a myriad of Individual coverage In this area, no attempt here will be made to spell out each item of benefit* General coverage developed In this chapter Indi cated there were very few plans now employing the high and low option feature* A majority of the plana studied 271 individually did not provide for conversion privileges to an individual health plan. A very few of the health plana individually stud ied provided for maximum dollar amounts per disability. A predominant number of plana provided a maximum dollar amount as a top dollar limit of the entire plan. If an employee did not join at the Inoeption of the plan, there was a thirty to sixty day waiting period provided in the majority of plans. All health plans studied of this type did not make any variation in the premium rate depending on the subscriber's income. Compulsory health plans were in the minority as compared with voluntary plans. Leave of abaenoe with or without pay has resulted in coverage for a period of time from 30 to 365 days In health plans of this type. Usually this cost was shared by employer-employee. Overfall coverage in this type of plan was found in all cases studied and sampled to be world-wide. The right of subrogation existed In the minority of cases studied. Quality control provisions have not been predomi nantly evident in this type of plan. A majority of the plans studied individually did not exclude duplication of benefits. Plana of this typ©„ In most cases, did provide 278 for limited coverage for mental and nervous disorders* Reimbursement for treatment In all cases reported by the sampling started on the first day of the accident* Very few plans studied had a separate accident rider* Acci dental death and dismemberment and life Insurance special benefits were evident In a minority of plans individually studied* Very few plans had provision for accident and siokness periodic Income provisions* Retirement benefits were provided in a minority of cases with detailed stipu lations* Thar© were no replies to the questionnaire on available dental plans* A discussion of such plans was made on the basis of consultations, conference data and individual interviews, as well as a study of the related literature* Dental plans as part of the health plan package is still a rarity but a very necessary part of the total health plan picture© CHAPTER VIII GROUP PRACTICE HEALTH PLANS INCLUDING CLOSED PANEL* OPEN PANEL* RESTRICTED AND UNRESTRICTED TYPES, FOUNDATION FOR MEDICAL CARE, SELF-CONTAINED UNIT, HEALTH CARE PREVENTATIVE TYPE PLANS Introductlcm The third content section of th© complete quae- tionnair® as contained In Appendix A provided for a sam pling of the broad type of plan referred to as the group practice plan. There were no questionnaires returned to indicate that any of the cooperating agencies sampled had in affect a group practice type of plan. Every conference attended, Interview held, and discussion with consultants in the field, as well as a substantial share of the related literature made reference to and developed in detail the group practice type of plan* There is every indication from the findings of the above sources that the group practice type of plan is be coming and will continue to become more popular and more 273 274 frequently selected) especially in urban areas. A de cision had to be made to either leave this important grow- ing type of coverage out of the findings of the study or to report such findings based on conferences, personal interviews) individual case studies) consultant inter views) and a careful analysis of the related literature. It was decided to report such findings as indi cated above in this chapter specifically pointing out that the information reported is not the result of the ques tionnaire responses but rather the result of findings from the sources enumerated above* Such findings carefully screened and evaluated could possibly prove helpful to those interested in this subject area. The group practice type of health plan has been less popular nation-wide although very successful in the areas where it has been used extensively. In Chapter III reference was mad© to the birth of the Ross-Loos Health Plan In the Los Angeles area In 1929. That health plan, with some modifications, is still a successful plan In the Los Angeles area today. The Kaiser Permanent© Plan of the Los Angeles-Oakland-Hawali areas and the New York State wide Option Plan (H.I.P.) are also examples of the restric ted group type health plans that are In successful opera tion today® 275 Since the restricted (closed panel) type of group practloe plan has been successful but only In large areas with rather large groups* Modifications have been made In this type of health plan that should Increase Its nation wide popularity. The foundation for medical care type of health plan administration and the use of the open panel are moves in this direction. One of the less desirable facets of the group type of health insurance plan Is Its restriction to a limited area® However* this is being met with supplementary in surance coverage that can b® used anywhere In the world® The problem now is to provide this supplemental insurance and group coverage within the total premium range of other types of plans. There are definite factors encompassed in the group practice type of plans* especially the new modifi cations* that consultants feel behoove thoae interested In health Insurance to look closely at the group practice type of plans available* or plans that can be made avail able through mutual agreements between the commercial In surance carriers* subscribers* and medical groups. Pattern of Presentation As in the two previous chapters* the findings from conferences* Interviews* and Individual plan studies will 276 be developed In sections concerning coverage for hospital, surgical, medical, diagnostic X-ray and laboratory, gener al, and special care. This chapter, In addition, will in clude a section on foundation for medical care type of coverage. Hospital coverage The group practice type of plan did in most cases include hospital coverage. If hospital coverage is avail able, it can be of the restricted type where only a spe cifically designated hospital may be used® Th© coverage may also be of th© type that, through Indemnity or non profit coverage, provides for various hospitals to be used as the patient1s or doctor's choice dictates. If the hospital coverage is of the type that Is covered by an Indemnity major medical policy or nonprofit hospital type then th© coverage would bo much the same as discussed un der Chapters VI and VII. However, if the coverage Is of the type that designates one or more hospitals which can be used only under the health plan, then the following questions and discussions would be more apropos. Private rooms, special diets, and similar special treatment are in designated hospitals and are usually available to patients needing them without an additional surcharge. In order to control such benefits, however, it 277 Is not uncommon to place s suroharge on such items* Private nursing may be provided with a surcharge or additional charge In some form. However, several con tracts studied provided that If private nursing is neces sary In the opinion of the proper authorities such could be provided without any additional charge* Hospital care in designated hospitals predominant ly provided the use of the operating room without a sur charge; although an additional charge may be made for special equipment and service. In the same area of bene fits, such hospital car© usually provided for the anesthe tist and anesthetics, blood transfusions, and ambulance service. In nearly all cases there was some limit of hos pital care and this can be expressed in days or dollars* In some plans, to ease long illness expenses after a designated number of days of hospital care, an additional number of days may be available at a percentage of the private dollar rate with a dollar limit either in days or a lump sum* This can, as an example, be expressed as 120 days without charge, an additional 240 days at 50 per cent up to a #300 total of private rates* The use of specialists and doctor* s care while in th© hospital, including operations and consultations, were in the majority of cases studied provided without 278 additional surcharge as part of th® normal hospital cover age. In some eases, auoh aerviees may provide for a per centage of the servioea performed without charge. How ever, the tendenoy is to provide such servicea without a charge unless unusual circumstances require a special type of service not normally encountered. Room and hoard, under the findings in the majority of oases, was limited to a number of days and a specific dollar amount per day. Plans of this type may provide for an additional percentage of the room and hoard up to a dollar maximum per day and a percentage of ancillary serv ices up to an over-all combined maximum of a specified dollar amount* An example is $25.00 per day up to a limit of $500, thereafter 75 per cent of the room and hoard up to $30.00 per day and 80 per cent of other hospital (an cillary) services expense up to an over-all combined maxi- mum of $5,000. Health plans of this type often provide for a different arrangement in the payment of ancillary services. Plans can provide for cash reimbursement up to a fixed amount, unlimited coverage on a service basis at no ex tra cost, or cash reimbursement to a fixed amount plus additional reimbursement on a percentage basis. Plans of the type discussed in this chapter tend, to provide ancil lary services without an additional charge, except in th© 279 most unusual cases where & surcharge may be applied. or those plans studied, there was no differentia tion In conditions related or unrelated which would affect renewable hospital benefits. Although, as In the other types of plans suoh benefits could be renewed upon com plete recovery, Immediately, after a specified number of days following release from the hospital, upon returning to work, or not at all. The tendency of the plans stud ied was to provide a specified number of days after re lease from th® hospital before the plan's hospital bene fits were again effective. The tendency or trend in th® group practice type of plan is to make such benefits avail able a short period of time after release from the hospi tal or Immediately thereafter thus providing the broadest of benefits. Classification as a hospital patient generally ai&j follow the interpretations discussed in the previous chapters, with the usual exceptions being made for emer gency treatment. Top limits of coverage in the type of health plan discussed in this chapter are in the majority of findings as low as $5,000 or as high as $15,000. The top limit in most findings was for the lifetime of the subscriber and could b® renewed after the expense of a specified dollar limit by th© health plan if evidence of good health could 280 be furnished to the carrier* Out-patient surgery, under a reatrioted group plan, la In most cases performed at either the hospital so designated or at a doctor member'a clinic* In such cases If the surgery was deemed necessary by the member doctor there was no additional charge usually made* As with the majority of all health plana, the sub scriber or dependent in the group type of plan must be free from hospitalization at the time the health plan of this type is Instituted. Consultants indicate that there Is nothing to prevent the writing of the plan to include hospital expenses from the date of instituting the plan regardless of the health of the subscribers at that time. Plans could have this provision written in and place a dollar limit on such expenses in order to limit the ini tial costs of the health plan* Th© closed panel plana (restricted) of the type discussed in this chapter did not employ as a broad as pect of control the use of the deductible or co-insurance. As this type of plan tends to be the most comprehensive one written, such controls are instituted and carried out by reason of the entire staff being devoted to and employed by the health plan. The salaries of the doctors, nurses, other personnel, us© of supplies and equipment, all bear on th© solvent existence of the health plan® Thus, there 281 is a built-in control of expenses here that Is most real istic* In-hospital well-baby care, as a part of the maternity benefit, was found to be predominantly a part of these plana. Maternity benefits are more comprehensive as a benefit under this type of health plan than the other types of plans and therefore more coverage Is available without special emphasis. Payment to the anesthetist is preponderantly part of th® benefit coverage and there is no distinction as to whether the operation requiring the anesthetic is a major or minor one. If the anesthetic la needed, it la provided without distinguishing the operation as major or minor. Professional services in the hospital can be pro vided as part of the over-all prepayment premium (re stricted type) or can, in the case of indemnity coverage, b© tied to a Relative Value Study (schedule). Such rates are commonly 100 per cent of the units set in the Relative Value Study using a unit value of $5.00 to $6.25 In Cali fornia areas where such schedules are used. The findings revealed that removal of tonsils or adenoids was not restricted under this type of plan to a specified number of days. This control again was predomi nantly taken ear© of by th© doctor5 s rendering profession al advice as part of th© health plan staff. Th© open 282 panel difference will be discussed subsequently when the foundation type of plan Is developed In detail* The limiting of doctor1s calls in the hospital, requirement of a deposit before admission, use of the hospital assignment form, the use of a deductible for an* ciliary services, surgical expenses in the hospital, and charges for doctor* s calls in the hospital are in the majority of cases not part of the group practice dosed panel type of plan* This is true because controls as to necessary doctor* a calls, admission to the hospital, and the use of ancillary services are decisions by member doctors of the plan* There are group practice types of plans that, through a trusteeship, pay a per oaplta cost for each subscriber to paneled doctors® It Is then th® responsi bility of the doctor to render whatever medical, surgical, or hospital oar© la necessary at th© doctor* s direction® No fee other than the monthly payment by the subscriber Is required for whatever health costs are necessary* Surgical coverage Surgical coverage Tinder the closed panel (re stricted) type of health plan is determined by a fee schedule made up by or adopted by the plan® The sub scriber pays a periodic premium and receives whatever 283 surgery la neoeaaary to cope with his illness or accident* The doctors in the closed panel type of plan* as part of the plan* will perform whatever operations are necessary to care for the health of the subscriber or dependent* In the case of the open panel type of plan* the Relative Value Study (schedule) can be most conveniently used or a schedule based on this type of study can be used to determine charges* When the doctor becomes a member of the health plan in an open panel* he in most cases then agrees to accept th© fee schedule as full payment for his professional services* 3urglcal benefits for related or unrelated causes can be taken care of without restrictions as to renewing benefits suoh as when returned to work* after a speolfled number of days* and so forth* In the open panel type of plan* there ia more reason to place a control here for the protection of th© health plan and th© subscriber* In aueh cases* the return to work or declared recovery by a li censed physician were the most common criteria reported* As in the hospital coverage* the use of deduct ibles and co-insurance was not used in the closed panel type of plans referred to in the investigations* Regarding the performing of more than one opera tion at the same time and the charges therefor* in the closed panel type of plan as explained earlier the emphasis 284 la on the more complete care* If the operation or opera tions are needed* then they are performed without addi tional fees* The payment under the plan Is prowlded for In the subscriber* s perlodie prepayment* and no oontrol by administrative policy is necessary* If we are speaking of the open panel type of plan where the doctor may be a member of the plan In the sense he will treat members of a speolflo group and also conduct a solo practice* then such a provision as payment for more than one operation may bo taken care of by the established fee schedule* Surgical costs in the majority of plans reported were paid for in full under the group practice type of plan; although it was pointed out that benefits can be less comprehensive and exceptions can be made as desired* Surgical benefits* particularly in the closed panel type* are paid in full if the operation la performed at the hospital or at a plan-designated clinic* Th© typ© of hospital servloes Involved did not* in the findings obtained* affect the benefit of full payment and are usu ally without additional charge* Medical coverage In restricted (closed panel) type of group prac tice plans* doctor* s office visits can be provided with a small surcharge or no additional ch&rg® above th© periodic 285 payment* Group restricted plans studied seem to indicate there was a sharing of costs (surcharges) for the office visit, and there was seldom an unlimited number of calls without a charge being provided. Dootor*s and nurse's calls in the home were as a trend subject to a surcharge or shared charge. In many cases, the plans studied provided that the doctor* s or nurse* a calls at the home were at a reduced rate or on a surcharge basis. The use of the surcharge as a method of control was not uncommon in a number of benefit areas in the re stricted group practice type of plan. Administrative processing involving the surcharge was provided not so much to create additional revenue but primarily to employ a control to discourage abuse of a particular practice© In the case of the open panel type of plan, th© doctor* s visits to the home, office visits, and nurses' calls seem to be handled much in the same manner as indi cated in Chapters VI and VII under other types of plans. Some restricted group practice plans, in order to provide more comprehensive coverage of office and home calls for doctors and nurses, do provide a total dollar maximum amount per calendar year© These costa would b© established on a schedule set up as part of the health 286 plan. Out-patient diagnostic care would be made at des ignated offices or in the designated hospital under the restricted type of health plan. This Is another area where surcharges are fairly common to prevent abuse of specific services. In the unrestricted (open panel) type of plan such services would be treated as Indicated in Chapters VI and VII. Frequently In this type of health plan there is a provision to compensate the doctor for a long detention with the patient. This is particularly true in some foundation type health plans. A surcharge may be rendered for long detention, or a sharing of a fee as the benefits may provide. For those that choose a restricted type of health plan, they, as subscribers, must have confidence In the panel of doctors. On© of th© potent arguments used against the group practice type of plan Is that the tal ents of the profession are curtailed by limiting th© spe cific doctors that oan be used in the plan. Thus, there are specialists or very capable general practitioners that are not employed to bring their expert knowledge to bear on a particular health problem. On the other hand, those In a group practice type of plan Indicate that they may seek th© consultation of anyone outside of th© plan 287 and that practitioners are hand-picked to be part of the team, providing a well-rounded and well-trained medical staffo This is a discussion not easily resolved and must ultimately be concluded In the breast of each potential subscriber. Visiting nurse service can be provided without charge under the restricted type of plan; however, such services as a result of the findings are predominantly subject to a shared cost or surcharge. Aa In th© case of th© other areas of the health plan, the use of deductibles and co-insurance in th© medi cal area is not common in the closed panel type of plan. In the open panel type plans, such deductibles may be used as indicated in the discussions in Chapters VI and VII, or there may be a fee schedule set up that member doctors agree to accept as full payment® Diagnostic X-ray and laboratory ooverage (inclusions and exclusions) The restricted types of plans as a trend usually include all drugs and medicines in the hospital, physio therapy and hydrotherapy, general X-ray and radium treat ment, and may include the rental of therapeutic, correc tive equipment, orthopedic devices, and prosthetic de vices® Open panel (unrestricted) types of plans hav© a 288 tendency to provide for the above, although with somewhat less benefits In the rental and orthopedic areas* Those items covered under state compensation in surance (workman’s sooial Insurance) are not predominantly covered by this type of plan, whether restricted or unre stricted, Also, those benefits usually excluded are ex penses In government hospitals or at government expenses, Injury or sickness as an act of war, and servloes rendered by the Immediate family. In the area of eye glasses, refractions, hearing aids, except as needed due to an aocldent, the restricted type of plan, as a trend, provides such at a reduced cost. This Is an area where, as reported by the findings, the restricted (closed panel) plan Is more comprehensive than the open panel or other types of health plans. Cosmetic surgery In connection with a repair or accident is predominantly Included In this type of cover- age. As a rule, those personal oomforts spoken of In the preceding two chapters (radio, television, barber, and so forth) would also be excluded In the type of ooverage discussed In this chapter. Under selected plans of the restricted (closed panel) type, drugs and medicines prescribed at designated pharmacies are provided without charge. In th® majority of cases, they will be provided at a reduced cost, Th© 289 findings indicate that this la another area where the restricted type of plan la more comprehensive than the other types discussed In the content chapter* X-ray and laboratory examinations for diagnostic or preventive purposes are as a trend Included In the re stricted group practice plan, and in a fewer number of cases In the unrestricted types of group practice plans* In fact, consultants point out that this feature Is one of the strong selling points of this type of group Insur ance— that of providing considerable prevention, diagnos tic, and rehabilitation care coverage* The benefits of a group practice plan may include eye examinations and rou tine physical check-ups without a charge or for only a nominal surcharge. The preventive care benefits are usu ally available In or out of the hospital* This, the find ings indicate, eliminates the common abuses of the basic service types of major medical plans where a subscriber has to be hospitalized In order to receive adequate diag nostic or laboratory services* Rehabilitation care, especially In the restricted health plan areas, Is often provided* Available study in dicates that this feature, again, is lacking In the types of plans described In Chapters VI and VII* Surgery for normal maternity, the doctor9 s visits to the hospital for conditions resulting from pregnancy, 290 treatment of congenital deformities, and pre and poet operative care are provided under the oloeed panel type of plan and on a limited basis under the open panel type of oare according to the findings* The Inclusion of dietary services* laboratory and X-ray, general nursing, special nursing care, operating room, cystoscoplo room, splints, casts, dressings, oxygen, basal metabolism, radium treatment isotopes, cobalt, con tagious diseases requiring Isolation, and diseases medi cally determined to be incurable are predominantly covered""" under the restricted (closed panel) type of health plan® These, in the preponderant number of cases studied, may be benefits subject to dollar and day restrictions for in- hospital care or for an out-patient subscriber® Treatment of allergies, therapeutic injections, sterilization, blood plasma, whole blood, circumcision, and eye refractions are as the rule placed mu)or a shared cost or surcharge schedule as evidenced in the findings available® Travel recommended by a physician is almost uni versally excluded from these types of plans due to the control feature® Expenses for custodial care without specific medi cal treatment may be covered, especially under the re stricted type of plan discussed In this chapter® 291 Any of the above inclusions oan have a dollar limit attached to them or may be subject to a surcharge* Consultants reveal that this charge will vary from group to group* not only on the benefits available but also on the experience of the group* in the use and/or abuse of the specific benefits* The coverage of electrocardiograms, diathermy, heat treatments* whirlpool baths* treatment of venereal disease* treatment of orthopedics* or the treatment of frigidity* impotence* or sterility are as a trend found In the restricted type of plan and may be found* usually with more restriction* in the open panel type of service* Dental X-rays* massage, and medical or surgical oars in the hospital for conditions not usually treated in the hospital such as a common cold or minor outs* and treat ment for injuries received while engaged in committing or attempting to commit a felony or wrongful act involving moral turpitude are found in some restricted types of plans but are not nearly as universal as th© other benefits enumerated* Treatment for attempts at suicide or intentional infliction of injury or Illness, hyperopia* and myopia or astigmatism are another group of benefits that are not common to the type of health plan discussed In this chap- tor* although they are not universally excluded® 392 Treatment of alcoholism, armed aervice-connected disabilities, conditions resulting from a major disaster or epidemic, or treatment of Injuries received while en gaged in a riot are not uncommonly cowered, especially In the restricted group practice type of plan* General coverage ■ M V M I H M H B M I M H H M M W S M i Plans of the type discussed In this chapter do not generally provide for a high and low option choice, Th© foundation type of plan has In some cases provided for various income groups In terms of the Relative Value Study (schedule) fees and coverage in the benefit areas. Contributions to the type of health plan discussed in this chapter are usually handled on a prepayment basis with a periodic payment per speclfio period of time. In th© open panel (unrestricted) type of plan, th® doctor chosen Is asked to abide by th© various fee schedules in the group practice plan even though he may also have a solo practice, where other fee amounts for the same professional service may be charged non-plan-member patients. Also, there are some group practice plans that will pay general practitioners the amount they would pay their own staff members and expect the patient to pay any difference In charge. Hot all group practice plans will extend, an amount in payment to non-momber doctors. 293 In a great number of group praotloe plana studied, the benefits to the subscriber and the dependents vere the same. The concept that the worker or employee is healthy only so long as his entire family is healthy is rather prevalent with the group practice type of plan. The findings reveal in the majority of cases in th© group practice type of plan that there Is a physical boundary limit for home calls, hospital transportation, doctor* s visits to a place other than the hospital or home expressed In miles. This is a recognized limitation of the group practice type of plan. It is not complimentary with the mobility of th© subscriber outside of a limited geographic area. There are restricted and unrestricted group prac» tioe plans that will pay a limited sum outside of a cer tain physical area for health plan cars. However, the studies mad© hero have revealed that such coverage is highly limited”-usually to a dollar amount (e.g., #600) for all health expenses incurred. Such coverage In the majority of cases studied is provided by an indemnity type of plan. Conversion privileges In this type of plan are provided for in a number of cases where the Individual or family intends to remain in th® physical area* Such pro™ 294 grams of health Insurance may not be as comprehensive as far as including special features such as life insurance, accident and sickness Income benefits, and so on) but in the hospital, medical, and surgleal areas they nearly always provide basically the same coverage as the group plan* In requesting a conversion, the subscriber must make a selection in an established time limit* This time limit, of course, will vary depending on the health plan although it is not unconmon to find the number of days aet at from twenty to sixty days® As in other types of health plans, group health plans in a preponderance of the cases provide for termina» tion of the health Insurance plan by the administration or management* If an employee Is terminated while still under th© health plan coverage, the subscriber will need to con vert his plan from a group coverage to individual cover age or terminate the health insurance* However, if he is ill at th© time of termination, th® trend indicates that his coverage may run from 60 to 366 days as the benefits so stipulate* Although no plan studied provided for a lack of extension of benefits beyond the termination date, consultants indicated that this is a benefit area that needs to b© checked by potential subscribers® In evory 295 case studied where benefits were extended past the date of termination of employment, there was no additional payment on the part of the subscriber necessary except of normal surcharges. The usual age limits at both ends of life were fundamentally the same in the plans of this type studied as they were for other health plans. In a minority of cases, they were broader in that coverage was provided for pre-natal with no upper limit. Many group practice plana® especially of the re stricted type, have provision for membership in the health plan although the subscriber's employer does not join as a group. Individual coverage preponderantly had fewer benefits, higher surcharges, or higher costs, but in many ways much the same care is available to individual members not part of an employer group. Provisions for retirement benefits may bo substan tially the same as those for active employees without in creased costs. These benefits are provided In this type of health plan. However, unless there is a group benefit of this type, retirement provisions were not usually avail able individually In those plans studied. In the type of health plan discussed In this chap ter, there is not. In the majority of cases, a higher de gree of coverage and/or a lower cost depending on the 296 •alary of the employee. All employees were covered equal ly at a set premium rate* The group praetiee type of plan, either restricted or unrestricted, may be compulsory or voluntary. One large group health plan stipulates that there must be at least one other type of plan available if their group practice health plan is offered (dual choioe). This is to erase the feature that one must join a restricted non- seleotlve doctor health plan or have no health plan at all. Those plans studied seemed to indicate that the group plans were voluntary within an organisation, with a choice of other types of health plans available where the size or composition of the subscribing group would permit. The group practice typo of plans studied did not tend to require a waiting period before becoming eligible for membership. In the leave of absence benefit area, those plans studied did not provide for health plan coverage during the leave of abaenoe at the expense of the employer or shared expense with the employee. Provisions were, how ever, made for a leave of abaenoe period of from 120 to 365 days wherein the employee could pay for the health plan benefits and remain fully covered® 297 The group practice type of health plan doea pro vide for continuity of coverage suoh as prevention* diag nosis and rehabilitation* This is one of its strong fea tures as pointed out by the findings* This approach con sultants indicated also Includes the encouragement of early diagnosis of disease* preventive medicine* treatment for rehabilitation of a chronic disease* and care for men tal illness* Some group practice types of plans are now pro viding a supplemental major medical plan to take oar® of larger expenses outside of the limited area of treatment in the case of a restricted (closed panel) group* Where a subscriber belongs to a large health plan group* such as the Kaiser Permanents Plan which has treat ment areas in Los Angeles* Hawaii* and Oakland* the health plan may provide for a "Provision of Plan®" This means that the various benefit® and regulations may be different in the various areas of treatment* but such benefits will be available under the operating rules of th® geographic area of treatment* Under the group practice type of plans* as was found in those plans discussed in Chapters VI and VII* an employee cannot, in most cases* be covered both as an employe® and as a dependent® Where there are no Indemnity features to the health plan this feature loses much of its 898 importance* In the open panel (unrestricted) type of plan, or vhere a major medieal rider may be superimposed on a group practice type of plan, there may be the right of subrogation* If so, it follows the same pattern as dis cussed in the two previous chapters* Plans of the type discussed in this chapter may provide benefits to a person on authorized leave of ab sence without pay who has become totally disabled provided his benefits have been paid to date* It is pointed out by authorities that this is a feature that each health plan must study in relation to state disability insurance, accident and sickness Income provisions of the health plan, and other available forms of disability coverage* Quality control is achieved to a marked degree in the group practice type of plan* Committees can be and are usually established for professional evaluation of member doctors, hospital supplies and equipment standards, cost control, and professional judgment. If a doctor de sires to be a member of the group, either restricted or unrestricted, he can at the time of joining be asked to subscribe to periodic examination* This would be true of the hospitals and clinics under the direction of the large group health plan* Some plans of this type employ a doc tor full-time to maintain a constant ©valuation of quality 299 control. Moro will be said about this item under the foundation type plan soon to be discussed. When the subscriber of a large group practice health plan la a member of a group of employees, the trend seems to Indicate that a physical examination is not re quired as a condition to join. However, if an individual desires to join, a physical examination prior to member ship is a much more frequent requirement. Psychiatric care is preponderantly provided in the group practice type of plan in keeping with comprehensive coverage. However, even here there frequently is a dollar limit, or visit limit per illness, or dollar limit per calendar year. The use of practitioners or doctors not officially licensed by an authorized governmental agency in the health plans studied of this type were not included in coverage. Well-baby care In the doctor* a office either on a number of trips after birth basis, or more likely on a small surcharge basis after a specified number of visits, was incorporated into the group practice type of health plans. Duplication of benefits with state disability in surance was not frequently written into such group prac tice plans. 300 As in the other content chapters in the discussion of other types or health plans, the findings indicated that it is important to know the female content of the health plan working force, whose spouses have health cov erage of their own. It would be also Important to know the number of employees that have a spouse working who has subscribed to a health plan elsewhere and included the em ployee in the health plan as a dependent* This informa tion la invaluable not only to see what percentage of the group has subscribed to the health plan (If voluntary), but such information can also b© used to analyze the bene fits and see if the needs of the group are being satis fied. As In the case of the other health plans, the findings indicate that a careful examination should be marl© to determine on an individual basis how the group practice health plan can be cancelled and for what rea sons. All city, school district, or employer personnel should be eligible for such group practice Insurance If it is offered to any part of the employees. As In the case of other health plans, the size of the group can often help to Insure the success of the venture. A broad sub scriber base, authorities declare, tends to produce a more stable premlum-claim relationship© 301 Foundation for medical care coverage There has been emerging In the last three or four years a health plan movement fostered by the medical so cieties to give quality oontrol and a wider freedom of choice in the types of health plans than offered by the group practice type of plan. The foundation plan is not strictly a single health plan for subscribers* Rather it is a society or group of doctors who have banned together forming a foundation for medical car© and sotting up cer tain principles and concepts that must be met in order to join and underwrite in the foundation* There are many types of health plans accepted by a foundation. The San Joaquin Foundation for Medical Care has had forty-five different health plana operating within ifca framework according to Dr. Harrington in his testimony before the governor* a committee on th® study of medical aid and health (April, I960). These health plans were being written by commercial Insurance companies, nonprofit service and medical groups, and other health plan groups who wanted to provide a sound health plan meeting the foundation for medical care's own minimum standards. There is a choice between multiple and single fee schedules for reason of income in th® foundation principle 502 In the plans in the San Joaquin Valley. The fee principle In the foundation for medical oare is to reduce fees from the schedule based on income not to increase fees above the fee schedules baaed on ability to pay more. In other words, the fee schedules based on the Relative Value Study of the California Medical Association are the maximum fees not to be exploited upward. Foundation fees sohedules are equated to income levels and they are established so that they can be adjusted from time to time as circumstances dictate. In th© Fresno Foundation for Medical Car® (and in other areas, too) there is a county-wide audit commit- tee established for both in-patient and out-patient medi cal care. Membership in the foundation for medical care is on a year to year basis. The membership of the founda tion reviews each application and makes a recommendation to th© board of directors who then vote on each applica tion. A two-thirds majority approval of the board ia necessary for membership. As determined from the findings, th© foundation is not an insurer, broker, or solloltor; it sets fee levels and schedules which are open to all; It controls its members* professional performance and cost factors to see that competent medical care is being dispensed at a reasonable cossfc® 305 Payment of all claims clears through the founda tion offices* At these offices the claims are examined for professional competence and reasonableness In terms of the costs established. Payments are made directly from the foundation offices where the plan carriers au thorize th© foundation to pay claims after its review. At present, the review of the claims In all aspects la made by doctors whc are members of the foundation without personal charge to the foundation. The lay office staff will review claims non-prof©sslonally and consult the doctors for any irregularities before certification for payment is made. A health plan embodying fee schedules set up on th© Relative Value Study in th© Stockton Unified School District In Stockton, California, is operating under the San Joaquin Valley Foundation for Medical Car©. They have employed, under the medical car© benefits, a unit of value for each call of $4.00 for classified personnel and $5.00 for certificated personnel not to exceed an aggregate maximum of $300 for classified personnel and $350 for cer tificated personnel during any twelve-month period. Other relative units of value have been established in accord ance with the Relative Value 3tudy In California* The key to the movement of th© foundation type of plan for medical car© Is in creating a high degree of 304 quality control of professional competency and coats while at the same time making it possible to choose a wide vari ety of health plana aa a potential group of subscribers. In San Joaquin County (California) over 98 per cent of the dootors belong to the foundation. In Fresno County (Cali- fornla) th© membership is proposed to be nearly as high® In Orange County (California) the membership is over 90 per cent. With a high degree of membership there is no lack of broad selectivity of a doctor of the subscriber* s ehoico® In addition to Orange County, San Diego, River side, and other nearby counties In California are no?/ looking with keen Interest Into the foundation type ap proach to medioal care. A study of the related literature revealed there la a co-efficient under the Relative Value Study set up for medical, surgical, radiology, and pathology® There may b© others depending on th© schedule chosen and th© composition of the plan. Often times the amount of surgl- cal coverage shall have th® minimum limit of liability equal to 100 times the appropriate co-efficient. Such a health plan, under the foundation super vision, may employ a deductible, but In the California area plans there is preponderantly no deductible for a consultation given for a visit not requiring complete medical examination at th© office, home, or at the 305 hospital. Also, no deductible is applied for long deten tion with the patient, or a diagnostic work-up by a phy sician limiting hia practice to Internal medicine. Some foundation plans indicate that circumcision is an excep tion to the coverage of a dependent. An anesthetic is usually fixed on the Relative Value Study with a unit of value and may be a percentage of the surgloal schedule when billed by the hospital. General minimum standards of coverage are usually established by th© foundation and the set standards of coverage must be met by ©very health plan that operates under the supervision of the foundation. Payments for services are, in every known case, limited to licensed physicians and there is an annual re view of the various health plans operating under th© foun dation as wall as an annual review of the foundation mem bers, Th© foundation can have optional features suoh as an amount toward well-baby care during the first year of life, coverage of dependent children to start at birth instead of say th© fourteenth day, coverage for post operative visits made after two weeks following the opera tion, integration with unemployment compensation for dis ability, supplementary accident coverage, and others® 306 In the foundation plans studied, there was a fea ture that if the patient refused to assign benefits the doctor has the right to charge his usual non-foundation fee* Also, if the family has multiple coverage, then the doctor also can charge his usual non-foundation fee not to exceed the payment for benefits of the multiple coverage* This would discourage duplication of benefits* Standards of the various foundation programs in the California counties have changed, are changing, and will no doubt change further as new and more comprehensive health plans are developed. Findings indicate that there has yet been little done to coordinate hospital programs directly In the foundation plan to evaluate quality con trol* There Is a strong feeling among authorities that much more can b© and should be done in this area. There can be and should be a review of equipment and supplies and a careful evaluation of professional competence of hospital care and services® Special coverage Many features which under the plans studied in Chapters VI and VII would be considered special coverage are included In th© group practice type of plan as routine benefits* Provisions for ©y© examinations, use of eon- aultants from outside sources., and th© treatment of 307 allergies are all examples of these benefits* The supply ing of antigens for allergies is generally either done on & free of charge basis or at suroharge rates. This is also true of therapeudio injections* Maternity care can include hospital care, pre-natal care, physician's and surgeon* s care in and out of the hos pital, and drugs and medicines while hospitalized* This may also include drugs and medicines free, or more likely at a reduced rate, at prescribed pharmacies for out-patient us©* Coverage can also include X-rays and laboratory work during pregnancy and care after birth of a child* Special provisions for Caesarean section can be made and in fact several of the group plans studied provided the mother with full care before, during, and after confinement. Generally, the member of th© health plan must have had a specified number of months’ membership in the plan before becoming eligible for maternity benefits. Sometimes a flat charge ia made for the entire car© above the prepay ment amount. In other health plans if th© employee haa less than a certain amount of time as a member in the plan, she will be extended maternity care but at a higher flat rate than if she had been a member longer than a specified period of time. If maternity ia terminated or Interrupted, there can b© provisions to pay © percentage of th© flat fee 308 instead of losing the full payment amount. There may be an extra dollar allowance in the health plan of the group praotice type for accidental in jury. Also, in oases of emergency there may be provision to cover the costs outside of a specified geographic rad ius® Such reimbursement may be made if such medical ex penses are a direct result of the illness. In some cases the member must be a registered bed patient. In the area of payment, part or all of the oost may be covered If a member is over a certain number of milea away from a doc~ tor’ 0 office or the subscriber'a plan-designated hospital, up to a certain dollar amount. Reimbursement may be made for these items and services in the amount limited to a fee schedule established under the health plan. Special dread disease Illness provisions may b© covered under th© group practice typo of health plan® Such may be a dollar limit for a specified period of time® The trend of the plans studied Indicated that there was not a preponderance of special dread disease limits® Although it is not common, there may be surgical and medical travel benefits under this type of health plan® Ambulance benefits under the type of health plan© discussed in this chapter may be, as discussed In earlier chapters, on a per disability basis or per trip basis® 309 They nearly always provide for no charge or only a small surcharge IT the distance to the health plan hospital was within a specified geographic mileage limit* If retired personnel are to participate in the health plan* there can he provisions made to Indicate how long they must have been employed in order to be eligible for retired health plan benefits. It is also helpful to establish the criterion of what constitutes an eligible active employ (In terms of a minimum number of work hours a day or work days a month) so that subsequent eligibility can be established in a retired status. Some provision should be made for a board or administrative review in oases where employee's hours drop below the minimum per week or month on a temporary basis* Available findings Indicate that special benefits under the group practice type of plan can bo available by adding other types of coverage. The life Insurance pro-* vision* sickness and accident Income provision* accident and dismemberment coverage, and special accident riders can all be written as part of the health plan if agreeable to the health plan management and the potential subscriber group* The same considerations given to these special coverages In Chapters VI and VII would be applicable her© as part of an overfall health plan® 310 Dental coverage In St. Louis, as part of the St. Louis Labor Health Institute Coverage (12), there Is a dental plan carried on a group practice closed panel basis that has proved reasonably successful. This type of coverage, whether a group practice or comprehensive type of program, Is probably destined to become the next area of oonsidera- tlon to labor and management as part of the collective bargaining process. This type of care has important fea tures and is more fully discussed In Chapter ¥11® Chapter Summary Group practice type health plans constitute a small minority of the total subscribers to health plans through™ out the United States. Generally, this type of plan has boon limited to specific geographic areas and ©specially to urban areas where population is so concentrated that large groups can utilize a centralized hospital and/or medical service. One strong limitation applies In the case of mobile populations where coverage outside of the limited area can be no more than minimal. As health plans have become more prevalent, new ways have been found to take advantage of an Immediate area type of plan so that members ©an still receive 311 adequate coverage, even though occasional mobility ia in volved* There have been many terms used in developing an explanation for this type of health insurance plan through out the United States* Open panel, closed panel, restric ted, unrestricted, self-contained unit, and foundation type are a few of the terms expressed* As indicated in the introduction of this chapter, all findings developed in this chapter have been the re sult of conferences, personal interviews with personnel studying th® plans, intensive individual case study, con sultant interviews with authorities in the health plan field, and careful analysis of the applicable related lit erature. No returns from the questionnaire were received in th© group practice content section indicating that non® of fehose sampled had group practice plans® As in the other chapters dealing with the content of health plans, the reader will find this chapter divided into © discussion of hospital coverage, surgical coverage, medical coverage, diagnostic X-ray and laboratory cover age (inclusions and exclusions), general coverage, special coverage, and dental coverage, plus a discussion of foun dation type plan coverage* Sine© this type of plan usually involves a specif ic professional staff membership that either (In th® 312 closed panel) performs professional services only for members of a specific group, or (In an open panel) per* forms services for a member of a specific group but alao maintains a solo practice, the number of administrative controls necessary can be greatly reduced* This is true because in many other ways the health plan has a much tighter control over the professional staff as well as over the membership* In hospital coverage the chapter develops the coverage given to dependents which la preponderantly com prehensive, with some specific limitations* The use of specialists from outside sources is evident in those plans studied* Payment for services of the anesthetist and special services considered extras by other plans may b© routinely part of th© service of a group practice type plan for a prepared .feea Doctor* s calls In the hos pital and return to the hospital for related and unrelated conditions are predominantly devoid of waiting periods* Here again it ia felt that control of a specific profes sional staff eliminates the need for many dollar and day controls In the hospital coverage area* Surgical coverage on the basis of a fee schedule can b© used for payment to physicians outside of the area* However, the use of & fee schedule Is loss necessary whore th© professional staff la deriving Its sol® Income from 313 the health plan* There Is generally a standard fee es tablished for purposes of accounting and salary differen tial* Surgical costs are usually paid for in full under the group practice type of plan* Medical coverage, under the plans discussed in this chapter, usually is more comprehensive than under any other type of health plan. However, the use of the surcharge is not uncommon to restrict the potential abuse of home and office calls, as well as home nursing and re lated care. Diagnostic X-ray and laboratory coverage will not be developed in detail in the summary. However, generally there is a broader coverage in this type of plan than in others in terms of preventive and rehabilitation care. Plans of this type do not generally resort to high and low options* Conversion privileges in this type of plan on an individual basis can be common. This would be particularly true where the terminated or converted sub scriber was to remain in the Immediate area* Retirement coverage under this type of plan is not yet common. Many controls employed in other types of plans such as waiting periods, deductibles, and oo-insur ance features are not prevalent in the group practice type of service plan® 314 Quality control In this type of plan is more nearly achieved than under the basic service type or ma jor medioal type of health plan* Authorities recognize that quality control is a critical item in the continued operation and success of a sound health plan* This fea ture is in evidence in plans of this type* Foundation for medical car© coverage under this section really is not a health plan within itself. Such a program has many carriers writing under its auspices. However, th© ©lament of quality control la substantially maintained in this type of health plan and membership in the foundation by professional medical personnel has been so complete that the common criticism involving lack of selectivity of medical personnel by the subscriber is not a problem here* General, special, and dental coverage under this type of health plan is generally more liberal, with less restriction and more complete provision for the preventive, diagnostic, and curative type of benefits than in other types of health plans. There are several dental programs operating within a health plan of the closed panel type mentioned in this chapter* CHAPTER IX SUMMARY, FINDING3, CONCLUSIONS AND RECOMMENDATIONS Summary Health insurance constitutes an area of great concern in private industry for both management and labor* Since the early thirties general acceptance of the con cept of health insurance as a welfare benefit which Is an essential part of the employer’s status has developed rapidly. The average citizen is no longer able to amass savings sufficient to meet today’s heavy costs for medioal and hospital care* Some form of social insurance has been sought to enable workers to avoid the threat of financial ruin Imposed by mounting medical expenses® Many forms of social insurance, however, are not comprehensive enough to provide adequate coverage; others fall to extend eover« age to the dependent and family* The health problems of the family are the health problems of the breadwinner* A family burdened with medical expenses beyond its means finds little consolation in the fact that the breadwinner himself Is employed dally and in good health* 315 316 Medical care in the rural society of fifty years ago was entirely different fron that of today1s society; formerly the cost of medical care could be borne through a plan of careful savings. Today, a man's life-savings could be swept away by his first encounter with the spe cialization of modern medical treatment, the need for med icines and drugs heretofore unknown, and the multiplicity of expenses involved in hospitalization. Management and labor have recognized this transi tion and have encouraged federal and state legislation to give further impetus to the development of adequate health plana for all types of groups and organizations. The problem The purpose of this study was to analyze the type® of health insurance plans available to school districts and other selected agencies, with particular emphasis upon the initiation, administration, and content of such in surance plans* This objective was to be accomplished by means of a comprehensive r e s u m e of available written sources, by personal interview, and by means of an inten sive first-hand survey of a highly selective sample of school districts, cities and counties in an effort to de termine trend®. 317 More specifically, the study searched for answers to the following questions: 1. What major health plans are now available to school districts in the United States? 2* What criteria can be developed for the deter mination of an acceptable health insurance plan? 3. In what geographic areas are health insurance plans available? 40 What baalc elements characterize available types of health insurance plans? 5. What are the advantages and disadvantages of existing health insurance plans which are now available to school districts and to other local governmental agencies? 6a What steps are required and/or advisable in instituting a health insurance plan in a school district or other organization? 7» What factors are pertinent to the successful administration of health Insurance plans? 8, Is It practicable for a school district to underwrite a health plan on a self-Insurenc© basis? If so, under what conditions? 318 The procedure The study of health insurance plans was undertaken with the endorsement of the Association of Sohool Business Officials of the United States and Canada* A study was made of more than 200 health plans from all parts of the United States to provide a back ground of orientation in the subject matter, particularly with reference to selection, administration, and content coverage* Seventy-two letters wore written to agencies, organizations, and individuals throughout the United States and Canada to gather pertinent Information regarding health insurance plans. Contacts were made with private insurance companies which write a major share of health plan coverage. Nonprofit service health plan organiza tions were contacted as well as local, state, and federal governmental agencies. Health plan conferences at San Francisco and Los Angeles were attended. From a detailed compilation of data a comprehen sive questionnaire was devised. It became quickly appar ent that the scope of the study would require the section- allzing of the questionnaire; it was divided into five parts. Section I dealt with the Institution of a plan; 319 Section II with the administration of a plan; Sections III, IV, and V with, the content of three separate types of plans* Dr* Schuyler Joyner and Mr* Robert Fisher of the Los Angeles City Schools sent personal letters which en closed questionnaires to seleoted school districts, cities and counties* Mr* Kenneth Warner of the Public Personnel Association in Chicago distributed questionnaires to se lected large cities of over 250,000 population in states other than California® Additional questionnaires which included only Sections I and II were sent out to school districts of over 30,000 average daily attendance* The sample was highly selective and twenty-six returns were tabulated* The results of these questionnaires were tabulated and classified according to the major sections of the in strument* In reporting the findings, a separate chapter was developed for each major section: (1) selection of a plan, (2) organization and administration of the plan, (3) basic service type plans and/or supplementary major medical plans, (4) comprehensive major medical (first dol lar) coverage, and (5) group practice health plans* The foundation for the study and the findings rests with six approaches® Mo on© of those approaches could furnish a complete ©valuation of the study* Each In 320 its own perspective contributed to the research design, the findings, conclusions, and recommendations. These approaches, not necessarily in order of importance are: 1* The related literature, 2. The personal interviews with personnel engaged in a specific study of the health plan field, not consultants or recognized authorities, 3, An Intensive Individual case study, 4* The questionnaire, 5® Conference®, and 6, Interviews with consultants and other authori ties in the health plan field. Findings Background development Factors that have encouraged the rapid development of health plans have Included the rising costs of medioal care which make it difficult or impossible for the Individ ual to meet the burdensome costs by us® of personal finan cial resources. Also, World War II and the Korean Conflict gave impetus to the adding of health benefits to attract and retain valued employees where wages were frozen by legislation. During the early forties the federal legis lation and National Labor Relation Board* s rulings which required industry to bargain with unions for health and 321 welfare benefits through the Wagner and Taft-Hartley Acts and amendments thereto again added strong force to the rapid development of health insurance* The ruling by the Bureau of Internal Revenue that such health plan expenses to employers could be written off as a business deduction once more helped to encourage employer participation In the health plan field. Last but not least# there were those employers who saw that a healthy employee was a productive employee and a good health plan assisted in re ducing absenteeism# increased moral©, production* and the quality of work performed. Health Insurance plana are not a new form of bene fit as they date back to the eighteenth and nineteenth centuries to England* s friendly societies and Germany* s workmen's orders. However, the early thirties have been recognized as the beginning period in the rapid rise of the health Insurance plan field In th© United States. Activity In the health plan field by school dis tricts in the last twenty years has been meager and mostly devoted to packaged "brand" plans where such health in surance has been available. This is somewhat ironical since it was a group of some 1,500 school teachers that gave birth to what we now know as nonprofit hospital and medioal services throughout th© United States. The lag of health plan insurance in the school dlatricta and 322 entire field of government, whether local, state, or fed eral has not been subject to the strong pressures of col lective bargaining, income tax deduction, and substitute of fringe benefits for wages where wages were frozen by legislation. However, they have been and will continue to be affected by th© competition for valued personnel in the general labor market. Also, the factors of absenteeism, high morale, production, and quality of work are Just as important to public agencies as to private industry. Recent large-scale development in available health plans for school districts has occurred In New York State where such districts and other governmental agencies are eligible to join either the basic New York State plan pro viding hospital coverage by Blue Cross, surgical and medi cal coverage by Blue Shield, and a major medical program by Metropolitan Life Insurance Company; or they may choose one of two options, the first being the Health Insurance Plan of Greater New York which Includes the same Blue Cross hospital coverage but in place of th© Blue Shield cover age and major medioal coverage is a group practice plan. The second option called the General Health Insurance In corporated has the same Blue Cross hospital plan as the base plan and Health Insurance Plan of Greater New York but substitutes a nonprofit medical service corporation for th© medical and surgical and major medical plans and 323 is considered an opon panel type of plan* Health plan coverage in the United States today, as one national study points out, has nearly three out of four families with some form of health insurance protec tion, and in three out of five families every member is insured (95)* In another national study, over 87,000,000 people, or 57 per cent of the population, have some hospi tal insurance. Over 74,000,000 people, or 48 per cent, have some surgical or other medical insurance, As con cerned members of governmental agencies. Industry, and specifically school districts, there must be awareness of the tremendous surge in the direction of health insurance and a felt need to provide the leadership necessary to institute a health plan that provides for the best possi ble needs and benefits for all interested employees, A study of the health plans throughout the country indicated that more group practice plans are in operation on the West Coast, but that there are not any exclusive types of health plans which are available in on© region that are not or cannot be Instituted in other areas as well. Group practice plans tend to flourish best with urbanization. Health costs tend also to be higher in ur ban areas, especially in southern California® 324 Instituting a health plan The selection process of the health plan is no less important than any other phase of health development. One of the strong criteria in the selection of a particu lar plan is the needs and desires of the subscribing group* In the selection of a health plan the predominant number of responses to the sample showed that no consult ant was used. One consultant was employed on a flat fee basis, while none were employed on a percentage basis* Seventy-five per cent of those organizations that responded indicated that they selected a health plan by committee. A little less than half of those reporting indicated that they polled the desires of the subscribing group as to preferences of coverage. Both employees and management (administration} had representation of the committees In slightly over one-half of the agencies re porting In the study. Just less than half of those sam pled went to bid on their own specifications, while 52 per cent indicated that they used a "brand” plan for their specifications. About one-sixth of those sampled indicated they considered self-insurance. In the arsa of cost, slightly over 70 per cent of 325 the respondents reported that they received a firm price on their bid« Almost three-fourths of those replying in the study indicated that the period of firm rates was for one year. Composition of the bid included four important areas which, except in the case of indicating the annually incurred claims to be used by the Insurance oompany or nonprofit organization as a basis for its bid, were pre ponderantly in evidenoe. Administration of a health plan Cooperating agencies responding to the question naire indicated that in only one-half of the plans did those agencies have a choice of whether they would admin ister the health plan themselves or have it administered by the insurance carrier. Fifty per cent of those agen cies that did have a choice of whether to administer their plan or have it administered by the carrier did not know which arrangement would be leas costly. Just over two-thirds of those reporting adminis tered their health plan centrally. Eighty-seven per cent of those sampled indicated that they used an identification card to associate the subscriber with the health plan. The issuing of a master policy and individual cer tificates of a health plan was evident in th© majority of 326 oases* Slightly fewer than one-half of those responding to the questionnaire indicated that they had more than doctor and hospital forms to handle in the administration of the health plan* In over half of the agencies sampled, payment for s i claim was made directly to the subscriber® Fewer than one-sixth of the plans reported indi cated that the payment passed directly through the sub scribing agency’s offices* Fewer than one-tenth of those replying to th© questionnaire pointed to any need for improvement in th© printed information supplied by the carrier and dissemi nation of such information to the subscribers of a health plan® In the payment of premiums there was a marked trend toward partial payment of th© employees’ health plan premium by the employer* All agencies responding to the questionnaire In dicated that they had established some procedure to trans mit information on the details of the health plan to new subscribers* However, the majority had no procedure es tablished for Informing and educating employees relative to the health plan on a continuing basis® 327 Just over half of the respondents Indicated that they were evaluating the premium received by the carrier to determine if the subscribing agency was obtaining the proper benefits and dividends* Less than half (45 per cent) of the insurance carriers had confirmed to the sub scribing agency figures on the cost of the administration of the health plan based on the actual administration of the claim. A significant number of respondents did not know how much of the total employee* s health bill the health plan was paying* Reserves set up by the health plan carrier were not well understood by the subscribing agencies* the ques tionnaire revealed. Seventy-seven per cent of those sam pled indicated that they did not confirm whether or not they had any money returned due to reserve credits* In the breakdown of other charge and expense areas Inherent in the carrier* s financial health plan program the responses revealed that there was very little uniform understanding of the elements used and the percentage and dollar amounts computed. A prominent number of those who were sampled indi cated that their health plan was experience rated. Five who responded did not know how their particular health plan was rated* 326 The median length of time for having a health plan in operation was 1.5 years. Types of health plan coverage The basic aervloe type plan and/or supplementary major medioal coverage.— Of all types of health plana studied, the basic service type and/or supplemental major medical was the most prevalent. The materials studied under this type of plan were categorized into the areas of hospital, surgical, medical, diagnostic X-ray and lab oratory (inclusions and exclusions), general coverage, special coverage, and dental coverage. In the hospital section such topics as the provi sions for the anesthetist, what constitutes emergency care, what degree of coverage in days and/or dollars was provided were set forth. Th© surgical coverage provided by th© basic serv ice type of plan was predominantly controlled by a fee schedule. Dependents in tho plans studied and sampled were in most cases given the same fee schedule coverage as subscribers. In the supplementary major medical plan area a fee schedule rarely existed as the plan relied on what was th© current and reasonable charge in the specific area. Medical coverage under the basic service and/or 529 supplementary major medical type of plan was reasonably broad with the major medical portion providing for much of the broad coverage outslda of the hospital area. Medi cal coverage In the office and home in a majority of plans studied has a number of limitations and controls due to the abuse that can be rendered to a more blanket type of coverage* The use of the deductible and co- insurance controls in the supplementary major medical was an effort to control this area of expenditure* The study of the diagnostic X-ray and laboratory area was dealt with in considerable detail in the findings. For knowledge of specific coverage, varying inclusions and exclusions, refer to that portion of Chapter VI dealing with this information. In general coverage, the various types of person nel and how they fit into the plan, conversion privileges, retirement provisions, pre-existing conditions, voluntary or compulsory insurance, various leaves of absences, and excess (duplication) clauses were all discussed to render specific trends and developments in these areas* Special coverage in the area of maternity, acci dent riders, life insurance benefits, accidental death and dismemberment provisions, sickness and accident Income provisions, and ambulance coverage were discussed relative to the type of plans developed In Chapter VI® 330 Since dental coverage was discussed in Chapter VII, no further treatment was developed In Chapter VI* Comprehensive major medical (first dollar) cover age* — Hospital coverage was divided into room and board and ancillary services* The room and board was usually covered dollar-wise for a flat sum up to a certain amount with a co-insurance factor applied beyond that amount* Ancillary services were In a minority of oases treated the same as the room and board in dollar and day coverage, while th© majority of plans studied provided a more lib eral amount of dollars and days in this area* Dependents under this type of coverage enjoyed the same benefits as afforded subscribers* Emergency benefits in the majority of plans stud ied provided for hospital entry restrictions, and the re newing of benefits for related and unrelated conditions predominantly required the criterion of return to work* A relative value study (schedule) was not used in the predominant number of plana studied. Admission by assignment to a hospital, in all cases studied, was per missible* There were no special deductibles or co-insurance features In the surgical portion of this type of plan in th© health plans sampled® 351 No waiting period for subscribers or dependents was evident for medical treatment. Doctors were required to be licensed by a proper governmental agency in order to have their services covered under the health plan. All plans studied provided for the use of specialists as part of the benefits. Diagnostic X-ray and laboratory exclusions were found to be less evident in this type of plan than in the basic service and/or supplementary major medical plans. A predominant number of plans studied did not provide for conversion privileges to an individual health plan. If an employee did not Join at the inception of the health plan there was a thirty to sixty day waiting period provided In the preponderant number of plans sur vey© do Compulsory joining of health plans of this type was In the minority as contrasted with voluntary Joining. Quality control provisions have not been promi nently evident in this type of plan. Limited coverage for mental and nervous disorders was evident In a majority of the plans studied. There were no replies to the questionnaire on den tal plans in operation by th© sampled cooperating agencies. However, dental plans were discussed In this chapter {Chep- 332 ter VII) baaed on personal interviews, conferences, in tensive survey and study of Individual plans, and on the review of related literature. Group practice plana*— The findings of this type of plan were based on conferences, personal interviews, individual case studies, consultant interviews with au thorities in the health plan area, and a careful analysis of the related literature. This was necessary as there were no replies from the questionnaire thus indicating that no cooperating agency sampled had a group health plan in operation. The group health plan has been less popular na tion-wide than other types of health plans. This type of plan finds a growth in urban areas where large groups may take advantage of concentrated health facilities. One of th© restrictions In this type of plan is In its availabil ity to a limited area. However, supplemental insurance provisions are being developed on a more comprehensive scale to provide adequate coverage when the subscriber is out of the immediate area. Hospital coverage available can be tied directly to a hospital owned or operated by the health plan or a hospital that Is contracted for by the plan. This Is usually the case In the restricted type of plan. Unre stricted plans (open panel) may have a number of hospitals 333 available and may in fact have this coverage on an indem nity basis. There are plans that pay a per capita amount to a group of member doctors for the health oare of their subscribers and then make it the responsibility of the group of doctors to provide all of the hospitalization, medical, surgical, general and special coverage care nec essary. One plan in Los Angeles, California, hires a doc tor to provide a continuing evaluation of quality control under such a plan. Private rooms and special diets in designated hospitals are usually available to patients needing them without additional surcharges. Those functions necessary to treat a subscriber in the hospital in all but extreme cases are nearly always provided to the subscriber without an additional charge. Specialists were used without an additional charge in a majority of the plans studied. Room and board was limited to a number of days and a specific dollar amount per day in the majority of plans studied. Health plans of this type often provided for a more comprehensive arrangement in the payment of ancillary servloes than did other type plans. Of those plans studied there was no differentia tion in conditions related or unrelated which would affect 334 renewable hospital benefits* Classification as a hospital patient preponder antly followed the same interpretation discussed in the previous types of plans* Top limit coverage in those plans studied ranged from $5,000 to $15,000* Surgical coverage on the basis of a fee schedule was used for payment outside of the normal operating area of the plan* Medical coverage under th© group practice plan was usually more comprehensive than under any other type of health plan* However, the use of surcharges was not un common* Diagnostic X-ray and laboratory coverage was more broad in this type of plan than in others, especially in th© area of preventive and rehabilitative care* Plans of this type did not in most cases resort to high and low options* Retirement provisions under this type of plan are not yet common. Many employee controls used in other types of plans such as the waiting period, deductible, or co-insurance features were not prevalent In the group practice type of plan. Quality control in the group practice plan is more nearly achieved than in the other types of plans discussed In this study. 335 The foundation for medioal care approach was dis cussed in this chapter (Chapter VIII) as a new direction to quality control of costs and professional services. General, special, and dental coverages under this type of plan were more liberal with fewer restrictions than other types of plans developed In this study. Conclusions 1. The study, adoption, and maintenance of a health plan are Intricate and complex and require the employment of expert consulta tion. 2. An adequate program for establishing quality control within a health plan is essential. Quality control was not evident in the pre ponderance of health plans studied. 3. In private industry health plana have become an Integral part of employee benefits. 4® Considerably more emphasis in the entire health plan area must be placed on preven tive, diagnostic, and rehabilitation care. 5. Provisions for more adequate conversion privileges and retirement benefits must be made a part of available health plans© 356 6. An adequate dental care program must be part of a comprehensive health plan. Recommendations It is recommended that: 1. Organizations interested in developing a health plan use the questionnaire in Appen dix A to assist them in gaining an insight into the many areas of selection, adminis trations and content coverage. 2® School district personnel become more inter ested in providing administrative leadership in the health plan field. 3. Consultants be employed when initiating a health plan and be contracted to remain with the plan for at least two or three years of evaluation and subsequent periodic evaluation. 4. Many faotors be considered before the selec tion of a health plan, including the study of the group to be covered, plan desired, and topical conditions. 5. Responsible personnel determine what reports are necessary to properly evaluate the insur ance program, not only from month to month. 357 but from year to year* The responsible per sonnel should make certain that such reports be available to concerned parties* 6. In the study of Instituting a health plan all interested groups be drawn into the planning and that there be provision for sound adminis trative leadership* 7. A potential health plan group go to bid using tailor-made specifications that have been designed and developed by the subscribing group to fit their needs* 8. When bidding a health plan the specifications provide for a firm bid that cannot be substan tially changed by a minor variation In final enrollment, female content, income, or age* 9« The bids Include a complete description of the benefits wanted, size and character of the group, specific procedures on how the administration of the Insurance is to be handled, and an annually incurred claim figure to be used by the Insurance company as a basis for the bid* 10* In the bid the reports of costs, profits, reserves, acquisitions, and so forth, be 338 spelled out and that the subscriber specif ically designate how often he desires such Information be submitted In writing, 11* A potential health Insurance group carefully consider self-insurance. However, it Is further recommended that subscriber have a well qualified consultant in this area to give advice of the many facets of organiza tion necessary to analyze this type of plan. Careful anticipation and calculation of re serves, utilization and costs to be Incurred by this type of plan will bear detailed anal ysis. 12. If one health plan will cover the needs and desires of the group it will perhaps provide a broader base of benefits and possibly less premium cost to its membership. However, If the group is so constituted that a dual choice is desirable there should be no hesi tation to provide this multiple selection. 13. A subscribing group administer the health plan or plans of their choice rather than have the administration handled by the car rier. A rate deduction should be allowed 339 for this choice, if the subscribing group administera the plan* 14* Full Information on the administration and the content of the health plan be made avail able to the subscriber by the insurance car rier. This should include comprehensive and well designed booklets, periodic explanations of any change of benefits, Information on processing of claims and other related ma terial® Such information should not only be put in the hands of the subscribers on initial joining but it is especially impor tant that such Information be reviewed and discussed with each subscriber periodically* 15* The subscribing groupT a administration pub lish periodically (bi-weekly or monthly) in surance news with a design to educate and in form all subscribers in the areas of health plan administration, benefits, costs, and current developments of the plan* 16* The insurance carrier or self-insurance ad ministration (trusteeship or otherwise) in form the group administration annually of the amount of premiums collected, taxos paid, 340 claims handling and Investigation expenses, commissions and acquisitions, contingency reserves, risk claims, profits, and adminis tration expenses, if any. These figures can all he computed and the subscribing group should insist on their availability. It is Impossible to properly analyze the entire health plan from the standpoint of benefits received, claims and premiums paid, without accurate data being made available. 17. The type of billing, methods of adjustments, adding and subtracting employees on the bill ing, method of submitting names for payment and other areas connected with the billing procedure should be well established before a health plan Is accepted® If not, a sub- scribing group runs the danger of being wpro- eedured to death” with changes, schedules, ad justments, and deviations, that can cause voluminous clerical burdens from month to month. 18. The organization (as an employer) pay the ma jority percentage of the health plan costs. In the same vein it Is recommended that the 341 organization aa the employer does not pay the entire oost of the health plan. These recom mendations are based on experiences that In dicate that If all expenses are borne by the employer and the subscriber has no stake In the cost, there will be a tendency to have little subscriber regard for the use rather than abuse of benefits. Also there are those who subscribe to the philosophy that one who shares a cost as an Interested party tends to take more interest in the operation and success of the venture. 19. The subscribing group know whether or not their health plan is experience or community rated. If experience rated and limited to the specific group1s claims experience it may have a higher loss ratio than If spread over a community of groups. This, however, would depend on the groups involved and how well those groups were administered. This point should be of concern to a subscribing group. 20. There be a concerted effort to prevent the change of health plana frequently. If a 342 plan la selected with care and sufficient study there should be little need to change or re-bld the health plan* This does not mean that if a new type of health plan la offered that would substantially Increase the benefits at little or no coat or would better fit the needa of the group* considera tion for change should not be given* How ever, It should be recognized that many In surance carriers will deliberately bid low to service an account with the thought that premiums will probably have to be Increased the second year* Since they service the group the first year, many times the sub scribing group will submit to the rate in crease the second year, rather than go through the procedure of re-analysis study necessary to choose another health plan* It costs more to "get started" administratively with a group, and If the Insurer does not feel he has a reasonably good chance of staying with the group, he may set his initial premiums higher* This may especially be true where selection of a packaged plan is employed 343 rather than using tailor-made specifications* Other considerations may warrant a change of health plans that would be peculiar to a local group* These considerations would, of course, have to be weighed on their own mer its at the time* In general, a subscribing group should stay with a health plan if it serves their needs at a fair cost, and pro* vides the best the health plan field has to offer over a projected period of timoo 21* The administration of a health plan provide for simple admission to the hospital* A card can be devised and sealed to provide an ade quate identification that would be honored in all reasonably administered hospitals. 22© A very comprehensive program of education be employed and continued, initially to inform the new subscribers and later continued to aoquaint the subscribers with all facets of the entire health plan. In this education process it is most important also that the Individual subscriber work toward the over all success of the health plan by such overt acta as checking drug involcess using the 344 plan only when needed, avoiding collusion with the doctor and hospital In over-utiliza- tion or costs* The health plan will be just as successful as the subscribers desire it to be. For the subscribers, the success of the health plan will depend on their coopera tion and understanding. 23. The limit of total coverage be placed in the proper perspective with the other benefits. In a national study some 32 per cent of the families reported medical expenses less than $100, 54 per cent estimated expenses between $100 and $500; and 14 per cent reported ex penses over $500. In terms of frequency, taking into consideration the entire subscrib ing group, claims over $1,000 may b© quit® infrequent. Claims over $5,000 will probably be very rare, and in most cases will probably not be repeated by the same claimant. However, the above figures should not be construed as discounting th® importance of a high limit major medical plan, merely that such high limits should not materially boost the prem iums. This would be ©specially true In con- 345 aid©ring a supplementary major medical plan Imposed on a basic plan, or a comprehensive major medical plan for more complete coverage* There may be groups where the supplementary major medical plan alone will definitely meet the needs of the catastrophic illness and for a nominal fee will protect the subscriber from the large medical bill that would place him In financial jeopardy. Subscribing groups should recognize that a fairly high limit is desirable, but think in terms of the individ ual limit of benefits in reaching that total limit. The two are not the same* 24. The hospital, surgical, medical, diagnostic X-ray and laboratory, general areas of cover age, special coverage, and dental coverage b© studied relative to their limitations and con trols. Is there a deductible or co-lnaurance factor involved in any one of these areas that may be above or beyond a blanket deduct ible or co-insurance factor? Are there dif ferent waiting periods? Are there specific limits of days and dollars? It is suggested that a careful and comprehensive study b© mad© 346 of the benefits and specifications with the advice of a qualified consultant to insure adequate and understandable coverage in all of these benefit areas. 25. In the study of surgical sohedules and cover age it be recognized that those illnesses or surgical cases that are more frequent should not be eliminated in favor of narrower cover age or broader areas of infrequent use. Also, fees to be charged or recognised as payable should be realistic for the area in which the health plan is going to function. If the fee limit for a specific operation is $100 and the going rate In the areas where the health plan will be used for that operation is $200, then a benefit has been limited considerably although it may not appear so to one un schooled In the technicalities of health plan lnsuranoe. 26. The technique of high and low options be con sidered as a method of providing for a varia tion in benefit and premium rates perhaps in some cases instead of the employment of dual choice or multiple selection® 347 27, When considering a type of health plan* the factors of preventive care* rehabilitation* adequate diagnostic and laboratory coverage* and retirement provisions not be overlooked. This means a comprehensive type of plan in many eases* but there is much to say for the long range value of preventive care and re habilitation as well as providing a really worthwhile program for retired employees who have given so much of their active lives to a particular organization. In this area it is recommended that retirement benefits of the health plan be the same as for those who are active employees and at no increase In costs. 28o Anyone selecting a health plan give very- serious consideration to quality control. More and more of those who are active in the development of the health plan field are recognizing that a definite procedure for quality control of costa, professional Judg ment* and equipment and supplies is needed for personnel and physical plants whether hospital* clinics* or office. In quality 348 control the consumer or subscriber should either have a direct voice or ooncrete assur ance through non-professional representation that the professional judgment of professional personnel is being made with a reasonable de gree of accuracy, that charges and costs are within a reasonable range for the services performed, that equipment and supplies are adequately available, furnished and employed to a high degree of professional utilizations These controls as a general rule are not pres ent today, particularly in the nonprofit and indemnity type of health plans* Health plan subscribers must demand vast improvements in the area of quality control by the selection of health plans that provide for these vital features or plan to establish such controls as part of the administration of the plan. 29* Adequate conversion privileges be provided in the health plan selected* There should be a type of individual health plan, adequate in coverage, that could be selected when it is necessary to terminate from the group* It is recommended that there be a definite pro 349 vision for conversion when a subscriber trans fers from one plant to another, or from one area to another with the same organisation, without loss of benefits or Increased oosts. For leaves of absence and other periods of inactivity of a temporary nature peculiar to each group, it is strongly recommended that coverage be provided in the same scope as for active employees and at the same cost. Further, it is recommended that in the case of leaves of absence a 365-day period (or possibly longer) be established during which time the absent employee could be carried In the health plan with no reduced benefits or increased costs. 30® Careful consideration b® given to special coverage such as life insurance, disability benefits, sickness and accident income pro visions, and death and dismemberment pro visions. Life insurance with conversion privileges can often be purchased for a nom inal fee. Disability benefits can be de signed to supplement social insurance bene fits. Sickness and accident income provi sions, particularly for non-oooupatlonal 350 causes, can be a tremendous assistance In time of need. Death and dismemberment pro** visions can be a worthwhile compensating factor for those shorn of a limb or left as a survivor* 31. Benefits for dependents be the same as those for the active employee. This is based on the concept that the health of the entire family affects the health, productivity, and quality of work of the active employee. 32® There be substantial coverage for mental and nervous disorders. It has been realized that mental health is equally as important as phy sical health; in faot, their intimate relation ship is known in psychosomatic medicine* To exclude this special area from adequate cover age la to make a health plan deficient in an Important aspect* 33. In speolal areas of coverage consideration b© given to the needs of the group relative to maternity care, drugs and prescriptions that might involve special pharmacies, special deductibles, specific limits to dread dis eases, optometry, benefits outside a physi cal distance for those plans which limit care 351 within a specific area, and dental coverage# Theee and other special benefits will vary in intensity and scope depending on the needs and desires of the group# 34# In all organizations, with special emphasis on school districts, or boards of education, trustees, directors, or other management structures exercise positive leadership in stead of followahip in providing an extensive and comprehensive health plan for employees In their organizations. In a substantial number of school districts contacted through out the United States, the health plans were sponsored and administered— not by the govern ing boards or management, not by the adminis tration of the school district or management,— but by the employee organization existing In the schools. These employee organizations may take the form of teachers* clubs, classi fied (non-certificated) groups chartered by a state organization, local, national, or in ternational union, or other similar bodies# 35. Governing boards and the administration become more aware of the health plan area of fringe 352 benefits, recognize the importance and take the lead in development of a health plan in the organization, with or without governing board or employer finanoial support* To do this will provide not only the employees but the entire educational program with an im portant instrument for better performance, better health, and more security* BIBLIOGRAPHY BIBLIOGRAPHY Books 1. Avnet, Helen H. Voluntary Medical Insurance in the United States: Major Trends and Current Prob lems . New York: Medical Administration Service, Inc., 1943. 2. Bestfs Accident and Health Analyses, 1933. Third Annual Edition. Chicago: Alfred M. Best Company. 3. David, Michael M. America Organizes Medicine. New York: Harper & Bros. , 1941. 4. Dickerson, 0. D. Health Insurance. Homewood, 111.: Richard D. Irsin, Inc., 1959. 5. Goldmann, Franz. Voluntary Medical Care Insurance in the United States. New York: Columbia University Press, 1948. 6. Kulp, C. Arthur. Casualty Insurance. New York: The Ronald Press Co., 1956. 7. 1954 Time Saver for Accident and Health Insurance. 31st Edition. Cincinnati: National Under writers Company, 1954. Public Documents 8. Committee on Education and Labor, U.S., Congress, House of Representatives, 85th Congress. Employee Benefit Plans. Washington, D.C.: Government Printing Office, 1957. 354 365 9. Committee on Education and Labor, U.S., Congress, Senate. Medical Care Insurance: Social Insurance Program for Personal Health Services. Report from the Bureau of Research and Statis tics, Social Security Board. Washington, D.C.: Government Printing Office, 1946. 10. Governors Committee on the Study of Medical Aid and Health (San Mateo, California). Transcripts of Statements by Health Plan Organizations at a Joint Meeting of Finance and Organizational Task Forces. Morgan Odell, Director. Sacra mento: California State Printing Office, 1960. 11. Klem, Margaret C. Medical Care and Costs in California Families in Relation to Economic Status. San Francisco: State Relief Adminis tration of California, 1935. 12. . Prepayment Medical Care Organizations. Social Security Board, Bureau of Research and Statistics, Memorandum No. 55. Third Edition. Washington, D.C.: Government Printing Office, 1945. 13. Klem, Margaret C., and McKeever, Margaret F. Management and Union Health and Medical Programs. U.S. Department of Health, Education and Welfare, Public Health Service, Division of Occupational Health. Washington, D.C.: Government Printing Office, 1953. 14. . Program Developments and Benefit Trends in Voluntary Health Insurance. Social Security Eulletin No. 11:3. Washington, D.C.: Government Printing Office, 1948. 15. ________ . Small Plant Health and Medical Programs. Federal Security Agency, Public Health Service, Division of Occupational Health. Washington, D.C.: Government Printing Office, 1952. 356 16. Klem, Margaret et: al. Medical and Hospital Services Provided under Prepayment Arrangements: Trinity Hospital. Little Rock. Arkansas, 1941-42. Federal Security Agency, Social Security Adminis tration, Bureau of Research and Statistics Memorandum No. 69. Washington, D.C.: Government Printing Office, 1948. 17. Los Angeles County. Employee Benefits and Personnel Practices: Large Governmental Jurisdictions in California. Los Angeles: Chief Administrative Officer, 1957. 18. The National Health Assembly. America^ Health: A Report to the Nation. Official Report. New York: Harper & Bros., 1949. 19. Reed, Louis S. Blue Cross and Medical Service Plans. Washington, D.C.: U.S. Public Health Service, 1947. 20. State of California, Assembly Interim Committee. Civil Service and Personnel Management Life Insurance and Medical Care Insurance. Report of the Assembly Interim Committee on Civil Service and State Personnel, Vol. I, No. 3, February 1959. 21. State of California, Department of Industrial Rela tions , Division of Labor Statistics and Research. California Industrial Relations Report No. 19, August 1959. 22. State of California, Department of Industrial Rela tions, Division of Labor Statistics and Research and Stanford University School of Medicine, Department of Preventive Medicine. Labor- Management Negotiated Health and Welfare Plans: Northern California. Sacramento: California State Printing Office, 1954. 357 23. Survey of Benefits and Personnel Practices for Non-Exempt Employees in Los Angeles County, Fall 1957. City of Los Angeles, County of Los Angeles, Los Angeles City Schools, Los Angeles City Housing Authority. Joint Report, 1957. 24. U.S. Civil Service Commission, Committee on Post Office and Civil Service, House of Representa tives. Evaluation of Proposed Premium Rates for Government-wide Health Benefit Plans for Federal Employees. Washington, D.C.: Government Printing Office, 1960. 25. U.S. Department of Commerce, Office of Business Economics. Survey of Current Business. July 1959. Vol. 39, No. 7, July 1959. Washington, D.C.: Government Printing Office. 26. U.S. Department of Health, Education and Welfare, Division of Program Research. Health Insurance and Related Proposals for Financing Personal Health Services: A Digest of Major Legislation and Proposals for Federal Action, 1935-1957. Washington, D.C.: Government Printing Office, 1958. 27. U.S. Department of Health, Education and Welfare, Public Health Service, Division of Dental Re sources. Dental Care in a Group Purchase Plan. Public Health Service Publication No. 684. Washington, D.C.: Government Printing Office, 1959. 28. U.S. Department of Health, Education and Welfare, Office of Program Analysis. Health Education and Welfare Trends. Washington, D.C.: Govern ment Printing Office, 1960. 29. U.S. Department of Labor, Bureau of Labor Statistics. Digest of 100 Selected Health and Insurance Plans Under Collective Bargaining, Early 1958. Bulletin No. 1236. Washington, D.C.: Government Printing Office, 1958. 358 30. U.S. Department of Labor, Bureau of Labor Statistics. Directory of Bureau of Labor Statistics Studies in Industrial Relations, July 1953 to April 1959. Revised March 1959. Washington, D.C.: Govern ment Printing Office, 1959. 31. ________. Health and Insurance Plans Under Collective Bargaining: Accident and Sickness Benefits, Fall 1958. Bulletin No. 1250. Washington, D.C.: Government Printing Office, 1959. 32. ________. Health and Insurance Plans Under Collective Bargaining: Hospital Benefits, Early 1959. Bulletin No. 1274. Washington, D.C.: Government Printing Office, 1960. 33. U.S. Public Health Service, Division of Industrial Hygiene. Industrial Health and Medical Programs. Public Health Service Publication No. 15. Washington, D.C.: Government Printing Office, 1950. Periodical Articles 34. Abel, John F. "Issues Involved in Meeting the Costs of Dental Care as a Part of the Employer- Employee Relationship--A Management-Oriented Viewpoint," Journal of the American Dental Association, 60:65-92, January 1960. 35. American Dental Association, Bureau of Economic Research and Statistics. "The ILWU-PMA Dental Program: First Year Statistics," Journal of the American Dental Association, 57:299ff. 36. Baker, Helen, and Dahl, Dorothy, "Group Health and Sickness Benefit Plans in Collective Bargain- ing," Industrial Relations Journal (Princeton University), 1945. 359 37. Brumm, John M. "Health Programs in Collective Bar gaining," University of Illinois Bulletin, 46:5, February 1949. 38. "Care for the Aged Is Coming. Question Is How Much and When," U.S. News and World Report, Vol. 48, No. 18, May 2, 1960, pp. 51-54. 39. Clark, Dean A. "Criteria for Evaluating Prepayment Plans," America's Health: A Report to the Nation, by the National Health Assembly. New York: Harper & Bros., 1949. 40. Clarke, Robert J., and Ewing, David W. "New Approach to Employee Health Programs," Harvard Business Review, Vol. 28, No. 4, Julv 1950, pp. 109-124. 41. Collins, Selwyn D. "Cases and Days of Illness Among Males and Females with Special Reference to Confinement to Bed," Public Health Reports, Vol. 55, No. 2, January 1940, pp. 47-93 (Reprint No. 2129). 42. Council on Dental Health. "Report of Councils and Bureaus: Survey of State Dental Service Corporations," Journal of the American Dental Association, 60:257-263, February 1960. 43. Daily, Edwin F., and Morehead, Mildred A. "A Method of Evaluating and Improving the Quality of Medical Care," American Journal of Public Health, 46:848-854, July 1956. 44. Dickinson, Frank G. "Medical Care Insurance: Lessons from Voluntary and Compulsory Plans," American Journal of Public Health, 41:560-566, May 1951. 45. "Evaluation of the ILWU-PMA Dental Care Program and Some Socio-Economic Factors Related to Dental Practice," Journal of the American College of Dentists, September 1958, pp. 145-240. 360 46. Falk, I. S. "Medical Care Insurance: Lessons from Voluntary and Compulsory Plans," American Journal of Public Health, 41:553-559, May 1951. 47. Friedrich, Rudolph A. "Group Purchase Programs for Dental Care." Journal of the Maryland State Dental Association, 1:97, September 1958. 48. _______ . "Trends in the Development of Methods of Payment for Dental Care," New York State Dental Journal, Vol. 25, No. 7, August-September 1959, pp. 293-298. 49. Goldmann, Franz. "Voluntary Medical Care Insurance: Achievements and Shortcomings," Journal of the National Medical Association, Vol. 46, No. 4, July 1954, pp. 223-232. 50. Hag, Donald G., and Selz, C. Mayo. "Extending Voluntary Health Insurance Through Community Organization." Public Health Reports. Vol. 71, No. 5, May 1956, pp. 477-480. 51. Halverson, A. B. "Major Medical: A Reappraisal," Best's Insurance News, Life Edition, Vol. 60, No. 12, April 1960, pp. 29-33. 52. Holman, Edwin J., and Cooley, George W. "Voluntary Health Insurance in the United States," Iowa Law Review, 35:185, 203-204, Winter 1950. 53. "Hospital Aid for Old--and Young. How Canada's Plan is Working," U.S. News and World Report, Vol. 48, No. 19, May 9, 1960, pp. 68-70. 54. Janis, Lee, and Roemer, Milton I. "Medical Care Plans for Industrial Workers and Their Rela tionship to the Public Health Programs," American Journal of Public Health, 38:1246-47, September 1948. 361 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. Kendrick, Benjamin B. "The Contribution of Volun tary Health Insurance," Journal of Chronic Diseases, 3:154-166, January-June 1956. Klem, Margaret C. "Medical and Dental Care in Prepayment Medical Care Organizations," Journal of the American Dental Association, 33:342-348, March 1946. Mayers, Harold J. "What Do Workers Want from a Medical Care Plan?" Occupational Health, Vol. 12, No. 8, August 1952, pp. 130-131. Miller, Morton D. "The Program of the Insurance Companies," American Journal of Public Health, 40:1125-28, September 1950. "More Medical Care for the Aged? Next Step in Welfare Drive" (Special Report), U.S. News and World Report, Vol. 48, No. 14, April 4, 1960, pp. 63-65. Plumbey, H. Ladd. "Budgeting the Cost of Illness," New York National Industrial Conference Board, 1947, p. 2. Pollack, Jerome. "Major Medical Expense Insurance: An Evaluation," American Journal of Public Health and the Nation's Health, Vol. 47, No. 3, March 1957, pp. 322-334. _______ . "Major Medical Expense," Best's Insurance News. Fire and Casualty Edition, February 1957. _______ . "Major Medical: Good or Bad?" Bulletin of the Los Angeles County Medical Association, Vol. 87, No. 16, August 15, 1957, pp. 29-33. Shanks, Carroll M. "Voluntary Health Insurance-- An Appraisal and a Look Ahead," Missouri Medicine, Journal of the Missouri State Medical Association, Vol. 51, No. 2, February 1954, pp. 118-121. 362 65. Shrene, Earl 0. "The Employer and His Workers' Health," American Economic Security, 6:41-43, June 1949. 66. Smith, J. Henry. "Group Health Against Illness and Accidents," American Economic Security, Vol. 7, No. 4, June-July 1950. 67. _______ . "Group Insurance Against Illness and Accidents," American Economic Security, 7:12, June-July 1950. 68. Sturdivant, C. E. "Teacher Turnover Due to 111 Health," California Teachers Association Journal, Vol. 53, No. 8, November 1957, pp. 14-20, 22. 69. Wade, Leo. "A Human Relations Approach to Sickness, Absenteeism and Other Employee Problems," Archives of Industrial Health, Vol. 12, December 1955. 70. Weinermann, E. Richard, and Abrams, Herbert K. "New Patterns in Industrial Health and Medical Care Programs in California," American Journal of Public Health, 41:703-711, June 1951. 71. Williams, R. C. "Development of Medical Care Plans for Low Income Farm Families--Three Years Experience," American Journal of Public Health and The Nation's Health, Vol. 30, No. 7, July 1940, pp. 725-735. Pamphlets, Bulletins and Reprints 72. Agents and Buyers Guide. The Survey Handbook. 1958 Edition Annual Yearbook. The National Underwriters Company, Cincinnati, Ohio. 73. American Association of School Administrators. Managing the School District Insurance Program. Washington, D.C.: National Education Association, 1953. 74. 75. 76. 77. 70® 79. 80. 1. 82. 83. 363 American Association of School Administrators and National Education Association Research Division. Educational Research Service. Circular No. 5. Washington, D.C.: National Education Associa tion, 1956. American Dental Association. Dentistry In 1957-- A Symposium. Reprint from the Journal of the American Cental Association, 56:779-800, June 1958. « Council on Dental Health. Group Dental flealth Care Programs. Chicago: American Denial Association, 1955. , Reprints from the Journal of the American Denial Association, 1958. American Federation of Labor and Congress of Indus trial Organizations. Catastrophic Illness In surance . Publication No. " S I . " May 195^. *" American Hospital Association. Publications Cata logue. Chioogo: 840 North Lake £hore Drive. American Labor Health Association. The Physician and Labor Health. New York: The Association, n.d. American Medical Association* Let*s Use, Not Abuse Health Insurance. Chicago: The Association, n.<3. — Anderson, Odin W. National Family Survey of Medical Costs and Voluntary rfealth Insurance. Chicago: Health Information Foundation, 1954. Baisden, Richard N., and Hutchinson, John. Health Inauranoe--Group Coverage in Industry. Los Angeles: Institute of Industrial Relations, University of California at Los Angeles, 1956. 364 84. Baumgartner, Leona, and Klein, Margaret C. Manage ment and Union Health Programs. The Coordina tion of Care and Public Understanding and Acceptance of Health Services. Reprint from Industrial Medicine and Surgery, 27:12, December 1958. 85. California Medical Association, Council. Relative Value Study, Second Edition. Committee on Fees of the Commission of Medical Services. 1957. 86. Continental Casualty Insurance Company. A Compre hensive Dental Health Care Plan. The Dentists' Supply Company of New York. Chicago: Conti nental Casualty Insurance Co., 1960. 87. Cunningham, Robert M. The Blue Cross Story. Public Affairs Pamphlet No. 101A. New York: Public Affairs Committee, Inc., 1958. 88. Dahl, Dorothy. Sickness Benefits and Group Pur chase of Medical Care for Industrial Employees. Princeton, N.J.: Industrial Relations Section, Department of Economics and Social Institutions, Princeton University, 1944. 89. Davis, Eleanor. Company Sickness Benefit Plans for Wage Earners. Princeton, N.J.: Industrial Relations Section, Department of Economics and Social Institutions, Princeton University, 1936. 90. Egly, Edgar C. Fringe Benefits for Classified JEtoployees in Cities of 100,000 Population or Greater. Bulletin No. 19. Association of School Business Officials of the United States and Canada, Evanston, 111., 1959. 91. Faulkner, E. J. Common Sense and Health Care Costs. Chicago: Health Insurance Association of America, 1959. 365 92. Foundation on Employee Health, Medical Care and Welfare, Inc. Problems and Solutions of Health and Welfare Programs. Part A. Improving Value and Reducing Costs. Study No. 1. New York: The Foundation, 1958. 93. _______ . Pros and Cons of Insurance and Self- Insurance of Health and Welfare Benefits. Part D. Problems and Solutions of Health and Welfare Programs. Study No. 1. New York: The Founda tion, 1960. 94. _______ . Service Benefits--and How to Compare Service vs. Indemnity Benefits. Parts B and C, Study No. 1. New York: The Foundation, 1959. 95. Fresno Foundation for Medical Care. Concepts: A Brochure. Fresno, California: The Foundation, n.d. 96. Gallagher, Vincent L. Insurance Words and Their Meanings. Indianapolis: The Rough Notes Company, Inc., 1954. 97. Group Health Association, Inc. A New Way to Better Health for You and Your Family. Washington, D.C.: The Association, n.d. 98. Hayes, A. J., and Snyder, John I., Jr. A Report on the Plans and Progress of the Foundation on Employee Health, Medical Care, and Welfare, Inc. Washington, D.C.: Foundation on Employee Health, Medical Care, and Welfare, Inc., [c. 1960]. 99. Health Insurance Council. The Extent of Voluntary Health Insurance Coverage in the United States as of December 1958. 13th Annual Survey. New York: The Council, 1959. 100. _______. Greater Security for the American People. Voluntary Health Insurance in the United States as of December 31, 1958. New York: The Council 1959. 101. 102. 103. 104. 105. 106. 107. 108. 109. 110. 366 Health Insurance Council. Some Fundamentals of Health Insurance. A Guide for the Practicing Physician. New York: The Council, 1956. _______ . A Profile of the Health Insurance Public. New York: Health Insurance Council, 1959. _______ . Source Book of Health Insurance Data, 1959. New York: Health Insurance Council, 1959. Health Insurance Institute. Health Insurance After Sixty-Five. New York: The Institute, n.d. _______ . A List of Worthwhile Health Insurance Books. New York: The Institute, 488 Madison Ave., N.Y. 22, 1960. Insurance Buyers Newsletter. Vol. 11, No. 10, July 1960. Eugene Robinson Company, Inc., Los Angeles. International Longshoremans’ and Warehouseman's Union, Pacific Maritime Association Welfare Fund. Your Children's Dental Program. San Francisco: The Association, April 1959. National Education Association, Research Division. Insurance Available to Members of Local Associa tions Affiliated with the National Education Association. Special Memorandum. Washington, D.C.: The Association, October 1953. U.S. Civil Service Commission, Bureau of Retirement and Insurance. Federal Employees1 Health Bene fits Program. Washington, D.C.: Civil Service Commission, December 3, I960. Veterans Administration, Department of Medicine and Surgery. Guide for Charges for Medical and Ancillary Services. Manual of Department of Medicine and Surgery, Appendix A, Part I, M-l. Washington, D.C.: Government Printing Office, August 1959. 367 111. 112. 113. 114. 115. 116. 117. Wemel, Michael T. Health Protection Trends in Programs and Expenditures. Benefits and Insurance Research Center Publication No. 10. Pasadena, California: California Institute of Technology, n.d. Yahraes, Herbert. Making Medical Care Better--and Easier to Pay for, Too. Public Affairs Pamph let No. 283. New York: Public Affairs Com mittee, 1959. Unpublished Materials California State Personnel Board. "Special Survey of Health and Welfare Benefits in California Local Governmental Agencies." Sacramento: State Personnel Board, 1959. Empainado, Liwayway L. "An Analysis of Voluntary Health Plans in the United States." Unpublished Master's Thesis, University of Southern Cali fornia, Los Angeles, June 1958. Kinney, Paul T. 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Washington, D.C.: Government Printing Office, 1957 (Mimeographed). U.S. Department of Health, Education and Welfare, Program Development Branch and Occupational Health Program, U.S. Public Health Service. Working Draft of Report, "Health of School Employed Personnel," Washington, D.C.: Gov ernment Printing Office, July 1, 1959 (Mimeo graphed) . Weinermann, E. Richard. "Essentials of a Successful Group Health Plan." Address, Fifth Annual Meeting, Cooperative Health Federation of America, Oakland, California, 1951. APPENDICES APPENDIX A HEALTH AND WELFARE PLANS QUESTIONNAIRE COMPRISED OP FIVE SECTIONS AS FOLLOWS: SECTION I - Instituting a Plan SECTION II - Administration of a Plan SECTION III - Baaio Service and/or Major Medical Plans SECTION IV - Comprehensive (First Dollar) Plana SECTION V - Group Practice Plana (Restricted” Unrestricted; Open-Closed Panel; Foundation Type Plans) HEALTH AND WELFARE PLANS QUESTIONNAIRE SECTION Is INSTITUTING A HEALTH PLAN: PERSONNEL PRACTICES NOTE: Suggest School District or City Personnel could best complete this Section I. 1. Did you decide on a plan as a result of single or (joint) commit tee study by certificated and/or classified groups (employees) in your district (city)? (1) . yes (2) _ no. 2. If no on question #1, was your plan selected by the: (1) Board (2) nn (3) Joint Board-Administration (b)___ other? (Please state .) (5) not ap plicable. 3. Did you use a questionnaire, mass meeting, or other general com munication to poll the employees in your district (city) indica ting their preference in coverage? (1) yes (2) no. k. Did your (city) district study other plans before selecting a plan? (1)_ yes (2) _no (3) approximate number of plans studied. 5. Were your employee committees selected by employee elections? (1) yes (2) no (3) pot applicable. 6. If ro to #5. were they selected by (1) Admini stration (Manage ment) (2) Board of Trustees (Board of Directors) (3) Steer- ing Coamittee composed of both employees (and Administration (Management) (*0 selected by other means (please specify) (5) not applicable. 7. Did your employee committees have administration (management) personnel on the committees? (1) yes (2) no. 8. If yes to #7, what was the approximate percentage of management (achainistration) personnel to employees? (1) 4> (2) _not applicable. 371 372 9. How largo were your committees? (1) (specify number please). 10. Were there sub-committees? (1) yes (2) no. 11. If yes to #10, the number of sub-committees (1) (2) not applicable. (please fill in) 12. If sub-committees were used, how many (in members) served on the sub-committees (each committee)? (1) (average number). 13* Were the committees' final recommendations submitted to the Board of Trustees (Directors)? (1) yes (2) no/or administrators for further action? (3) ves (k) no (please answer one only). 3A. Did the Board of Trustees (Board of Directors) accept the majori ty of recommendations as submitted? (1) yes (2) no (3) jnot applicable. 15. If Q2. to ilk, what percentage of recommendations would you say were accepted - (approximately)? (1) K> (2) not applicable. 16. Do you hire an Insurance Consultant to assist your committee and/ or Board of Trustees (Board of Directors) to select a plan? (1) yes (2) po. 17. If yes to #16, was your Consultant selected by the committee of employees (administration included in committee)? (1) yes (2) no/or selected by Board of Trustees (Board of Directors) (3) yes (4) no. (Please answer one only) or by the management (administration) (5)„ yes (6)^ no (7)_ _not applicable. 18. Did your Consultant exact a flat fee? (1)__ yes (2)_ no (3) not applicable. 19. If 22 to question #18, did the Consultant's fee include a percent age of cost of plan the first year, more than one year, etc.? (1)_______________ (2) pot applicable. (Please specify) 20. Did the Consultant's services (if used) cover a period of more than one year? (1) yes (2) no (If yes, number of years (3) (k)___ not applicable. 21. If you hired a Consultant and have had time to evaluate his serv ices, do you feel you would approach the insurance problem in the same way if you were starting again? (1). yes (2) no (3) not applicable. 373 22. If you hired a Consultant, did your selection group have advanced specific questions to ask to assist in determining the selection of a Consultant? (1) yes (2) no (3) not applicable. 23* If you hired a Consultant, did the sales ability and personality of the person to actually service the plan have considerable weight in your decision of selection? (1) yes (2) no (3) not applicable. 2k. If you hired a Consultant, did you insist that the man you inter viewed when selecting a Consulting Company, representing that specific company — be the same man who would actively service the plan? (1) yes (2) no (3) not applicable. 25* Bid you obtain your lists of Consultants for selection from: (1) local brokers only? (2) contacting the State Insurance Commissioner? (3) contacting insurance companies? (k) used independent brokers only? (5) contacting the Insurance Association of the State for names? (6) none of the above 26. Did you go to bid on your own specifications to select a plan? (1) yes (2) no. 27. Bid you use a "brand" plan or plans in existence as your standard specifications? (1)___ yes (2) no. 28. Did you select a plan without going to bid on a comparison basis? (3-) yea (2)._,_no. 29. If you went to bid on a plan, do you feel you would do so again? (1) ves (2) no (3) not applicable. 30. If you went to bid, did you provide for alternates in your plan specifications? (1) yes (2) no (3) not applicable. 31. Did you give any preference in selection of a carrier to local bidders? (1) yes (2) no. 32. If yes to question #31, what percentage in money? (1)______1°. NOTE: Questions #33 through #h0 apply only if your plan is self insured either through a Board of Trustees (Board of Directors) or an Insurance Carrier acting in that capacity. If you do not have a self insured 37** plan, please check "not applicable" lines in ques tions #33 through #**0. 33* Did you consider self-insurance? (1) yes (2) no (3) not applicable. 3**. If yes to question #33. did you take into account the amount of premium tax you would save? (l) yes (2) no (3) not ap plicable. 35* Did you agree to use an Insurance Carrier as Trustee of the Self- Insurance Fund and pay into this fund a negotiated amount per person, or per hour per person? (1) yes (2) no (3) not applicable. 36. Did you set up a Self-Insurance Fund wherein a separate Trustee ship was created composed of elected or appointed officials? (1) yes (2) no (3) not applicable. 37. In order to arrive at a maximum figure to be put in the Trust Fund that would not be more than the experience of the first twelve (12) months (or other specified period of time) would re quire to pay out in insurance, what methods did you use to cal culate your possible loss ratio: (one or more) (1 )___ Use of a Consultant. (2) No computation. (3 )___ Own computation based on previous experience. (h)___ A set amount with a reserve you feel adequately would handle any anticipated "(overage)" of the set amount. (5) You fix the level of benefits, and will contribute an amount to equal those benefits. (6 )___ You fix the level of contribution and leave it to the trusteeship to obtain the most coverage for that available money. (7) None of the above. (8 ) Not applicable. 38. Your trusteeship, (if an insurance carrier) is paid (1) $> of the premium or a set fee of $(2)________(check one only), (3) not applicable. 39. If your trusteeship is composed of employees and administration (or either), are they paid for their duties? (1) yes (2) no (3)_ _not applicable. 3 75 40. In question #39, is there an executor who ia paid to administer the trust fund? (l) yes (2) no (3)____not applicable. 41. If yes to question #39. hew much money is allowed for administra tive expenses, supplies, equipment, etc.? $(1) (2) not applicable. 42. Do you feel your employees were satisfied with the procedures that were used for selection of your plan? (1) yes (2) no. 43. If na, to #42, what areas of grievance were indicated? (1)_______ _____________________________________ (2) not applicable. (Please indicate in a word or two) 44. Did you select more than one Health and Welfare Plan for adaption (giving the employee the option of choosing one of several plans)? (1)___yes (2) no. 45. Did you select the Health Insurance on a payroll deduction basis? (1)___yes (2)__ no. 46. If you selected more than one plan (giving the employees a choice of choosing one of several plans) would you follow the same pat tern again if you were to re-select plans? (1) yes (2) no (3)___not applicable. 47. If you have more than one plan, has this created any major prob lems administratively, morale wise, etc.? (1) yes (2) no (3) not applicable. 48. In the selection of a plan, were you able to get a firm price (without any adjustment) on your bid or plan selected by compari son? (1) yes (2) no. (This means no change in price after selection for at least a year for reason of female content, age, etc., after enrollment.) 49. Did your price(s) hold firm for (1) pne year (2) two years (3). three years or (4) years without reduction of benefits? (Please indicate) 50. If you did not use a paid Consultant to draw your specifications, did you have the assistance of an insurance company representa tive? (1) yes (2) po (3) pot applicable. 51. Have you explored the possibility of county-wide or a state-wide plan for school districts or other governmental bodies? (l)___, yes (2) jno. (Question not applicable to private organizations) (3) not applicable. 376 52. Does your plan provide for rates based on: a) Qnployee only category? (1) yes (2) no. b) Qnployee and spouse? (3) yes (b) no. c) Qnployee and two members of family? (5) ves (6)___ no. d) Qnployee and family (more than 2)? (7) yes (8)___ no. e) Separate price male or female category? (9) yes (10) no. 53* Does your plan on cost provide for a same price regardless of whether the employee is male or female? (1) ves (2) po. 5*f. Did you select your plan as a result of competitive bidding on a basis that took note of possible exclusion of "high frequency" illnesses such as treatment for chronic diseases, treatment by injection, physiotherapy, treatment for allergies, eliminating the more frequent operations from the surgical schedule, etc.? (1) yes (2) no. 55• If your plan was obtained by competitive bids, did you provide: a) A complete description of the plan benefits wanted (1) yes (2) no. b) A complete description of the size of character of the group (3) yes (h) no. c) A complete description of specific assumptions on how the administration of the insurance is to be handled ( 5) yes (6) no. d) The annual incurred claims figure to be used by the in surance company as a basis for its bid (7). jyes (8) P° e) not applicable. SECTION II: ADMINISTRATION OF THE HEALTH PLAN NOTE: Suggest School District or City Personnel could best complete this Section II. 1. Does your district (city) hare a choice as to whether it will ad minister the Health Plan or hare the administration performed by the Insurance Company? (1) yes (2) po (3) not applicable. 2. If yes to question #1, does the plan cost less if adminstered by the school district or city? (1) res (Z) no (3) don’t know. 3« If res to question #2. percentage-wise, how much more does the plan cost if administered by the Insurance Company? (1)$ per employee (2) not applicable. If you have a basic service and major medical plan combined each by a separate company, do you find there may be a higher premium rate to administer one plan while the other plan may be self- actainistoring with no additional administratire costs per employee? (1) res (2)___po (3) pot applicable. 5* Do you have a central administration of your Health Plan, assuming your district (city) does administer the plan? (1) yes (2)____ n0 (3) not applicable. 6« If you administer your own plan, how much (percentage) of the total yearly premium do you feel you devote to the administration of the plan? (1)_^- ?. What system does your plan use to identify your employees? (1) card (2) letter (3) list at a designated clinic or hos pital (U) other. (check one please) 8. Does your plan(s) issue a master policy? (1). . . yes (2) no. 9. Does your plan issue individual certificates? (1) yea (2) no. 377 378 10. If you administar the Insurance plan in your district (city), how many forms must you handle? a) Hospital form separate? (1) yes (2) no. b) Doctors* form separate? (3) yes (4-)__no. c) Pharmaceutical fora separate? (*>) Tea (6) no. d) Other form separate? (7). yes (8)_ no. U. Does your Insurance pay the employee direct or is the payment channeled through your district or city offices? (1) direct (2) through district or city (3) other. 12. Do you find the administration of your plan (if administered by the district or dty (1) complicated or (Z) fairly simple. 13. Do you receire adequate instruction and information booklets from the insurance carrier (if not self-insurance)? (1) yes (2) po (3) pot applicable. 14> Do you feel the instruction and information booklets from the in surance carrier could and should be definitely improved? (1)___ _ yes (2) no (3) not applicable. 15. If ves to question #lfc> improvement should be made: (check answers) (1) Content of booklet. (2) Arrangement and format of booklet. (3) Getting booklet when needed. (4-) Haring adequate revision. (5) Getting sufficient copies. (6) Not applicable. 16. If you administer the insurance plan, do you feel you have ade quate information from the insurance carrier(s) to pass on to the employees? (1) ves (2) no (3) not applicable. 1?. Do you feel you receive adequate service from the insurance repre sentatives? (1) yes (2) no. 18. Does your insurance carrier(s) (if used) provide a service repre sentative who will meet with your employees at scheduled times to present the plan to new members and counsel present members? (1). yes (2) po (3) not applicable. 19. Does the insurance carrier bill your district (city) for the total periodic bill? (1) yes (2)_ no. 379 20. If you hare two or more insurance carriers involved, does all of the billing go through one carrier? (1) yes (2) po (3) not applicable. 21. Do you find your periodic billing simplified and without monthly confusion? (1) yes (2) no. 22. Is your Health Plan billing sent to you try the insurance carrier? (1) yes (2) no (3) not applicable. 23. Does the insurance carrier or trusteeship give you prompt service in billing problems, corrections, additions, and/or deletions to invoicing? (1) ves (2) no (3)__pot applicable. 2b. Does the same person that handles your Insurance administration in your school district (city) handle your billing? (1) yes (2) ,__ po. 23. Is your billing done: (1) __ weekly (2) _____ bi-weekly (3) _____ monthly (b) ___ bi-monthly (5) other 26. Do your employees pay premiums on: (including defendant coverage) (1) _____ all of the insurance? (2) _____ portions of the insurance? (3) _____ none of the insurance? 27* If ves to part (2) of the question #26, what percentage of the total portion does the employee pay? (1)___^__(2)_pot appli cable. 28. If the employee pays a portion or all of the insurance, is it done on a payroll deduction basis? (1) yes (2) no (3)____ not applicable. 29. Do you have a definite procedure set up to adequately inform new employees of your insurance plan (a)? (1) yes (2) po. 30. Do you evaluate your Health Insurance Flan by computing the premium, and dollar benefits paid periodically? (1) yes, (2) / 10. 380 31. Do you have procedures set up to educate and encourage your em ployees to check carefully the hospital, doctor and drug bills to make sure they are accurate and reasonable? (1) yes (2) 32. Have you mathematically evaluated the premium received by your insurer to establish that you are getting the proper return in benefits and dividends? (retroactive Rate Credit) (1) ves (2) no. 33. Do you get a clear financial statement from your carrier on the anniversary date, or more often, of your program? (1) yes (2)___ po. 3h. Do you evaluate to establish whether the incurred claims in your plan are realistic? (1) ves (2) no. 35. Has your insurance carrier given you confirmed figures on the cost of the administration of your program based on your adminis tration of the claims or the insurance carrier's administration of the claims? (1) yea (2) no. 36. Do you have a procedure to periodically check to see what propor tion of the members bills the plan is paying? (1) yes (2) 37. Do you know how the reserves are calculated in your plan(s)? (1) . yes (2) no. 38. Do you have a periodic procedure set up — the purpose of educa ting your employees in good health plan practices? (1) yes (2) no (3) not applicable. 39. Do you confirm your receipt of any reserve credits to be received for the previous year(s) incurred claims reserves not used? (1) ves (2) po (3) pot adequate. hO. Does your carrier, trusteeship, or foundation make an annual re port to you of the dollar amount of: a) Premium taxes paid (l) ves (2) po (3) pot appli cable. b) Claims handling and investigation expenses (h) yes (5) no (6) not applicable. c) Commissions and acquisitions (7)_ yes (8) no (9)___ not applicable. 381 d) Contingency reserves (10) yea (11) no (12) not applicable. e) Sisk claims (13) yea (lb) no (15) not applicable. f) Profits (16) yes (17) no (18) not applicable. bl. Is your plan(s) i (1) Consmnltv rate? (2) Bbroerlsnce rated? (3) Do not know, (b) not applicable. b2. Do you feel your plan(c) fits the needs of your membership? (1) yes (2) no. b3. How many years have you had a health plan in oporation in your school district or city? (1) years. bb. How long have you had your present plan? (1) years. b5. How many carriers (plans) have you had since your school district or city instituted a Health Flan? (1) (Humber). SECTION III: BASIC SEH7ICB AND/OR SUPPLEMENTARY MAJOR MEDICAL COVERAGE NOTE: You may find it convenient to hove your insurance agent com plete this Section III for the School District or City, the District or City has this type of Health Plan Coverage. I - HOSPITAL QUESTIONS 1. Your base plan pays for days in the hospital in a _____ bedroom at a maximum of per day. 2. In cases where you have a base and major medical plan, the major medical plan pays up to $ per day and bedroom for days. Dependents also. ves no. 3. To reenter the hospital your employees must wait days or return to active employment (whichever car.es first) for re newable benefits. not applicahle. Dependents also yes no. Dependents must wait days before reentering. 4>. Your plan provides for an anesthetist yes po. Payment up to $ $________first hours: $ next____ hours. For dependents also ves no. 5. Must your employees use a contracting hospital in your Health insurance plan? yes no not applicable. 6. In case your employees do not use a contracting hospital, your plan would provide $ per day for the first days of care and & a day for the next days, or not applicable. 7* If you use the emergency facilities in a hospital, but are not a registered bed patient, do the usual benefits apply? 8. Question 7 for accidents cases only yes no___ other. 9. After discharge from the hospital there is a waiting period of davs before renewing benefits even for the same con ditions for employees. not applicable. 382 383 10. After discharge from the hospital there Is a waiting period of days before renewing benefits even for the same con ditions for dependents. pot applicable. 11. If your employee must reenter the hospital after being dis charged before a required waiting period, may the employee use any unused days of benefits that he was eligible for under the first admission? ve s no. 12. In case of an accident is there a waiting period before bene fits renew for hospital entry? res no. 13. Are there benefits available if hospitalized for diagnostic reasons? yes no. & limit, (if any) not applicable. 14. If a dependent is hospitalized when the insurance is effec tive for the group, does that dependent have a waiting period after release from the hospital before he or she la covered? ves no 15. If ves. what length of time is the waiting period? days. pot applicable. 16. In payment of hospital service, other than roan and board (ancillary services) does your plan provide for: a. Cash reimbursement to a fixed amount . If yes. Maximum amount $ ? b„ Unlimited coverage on a service basis, at no extra cost yes no. c. Cash reimbursement to a fixed amount plus additional reimbursement on a percentage basis. If ves. $ plus % of the next $ (or i.e. 240 plus 75% of the next 500) d. other. 17. For unrelated conditions your hospital benefits are renew able immediately, after complete recovery or in days after hospital discharge. not applicable, (please check one) 18. For related conditions your hospital benefits are renewable upon return to work, complete recovery, days after hospital discharge, or not renewable at all. 38^ other. 19. Does (do) your plan(s) provide for a period of time speci fied to be continuously in the hospital to be classified as a hospital patient? _____yes no. If yes,____ number of continuous hours, or in emergency less that hours but within hours of the time the emergency began. ___ or registered bed patient, (please check one) 20. Does your plan cover your employees in full for hospital ex penses up to a specified sum? yes no. If yes. up to $___________. 21. If the hospital expenses exceed the "up to" amount in ques tion 20, what is the co-insurance factor (if any) above that amount? _____ 22. If your plan covers hospital expenses, what is the top limit? $______ 23. If there is a top limit, is this for a One year period or _____for a lifetime of the policy or _____other? 2h. Does your plan(s) provide for hospital expenses related to outpatient surgery? _____yes _____no. 25. Does your plan (s) provide for benefits if the employee is hospitablized at the time of the effective date of the ins tituting of your plan? yes no. If yes, $ ..... limit, if any. 26. Does your plan provide for a Co-insurance for: a. Other hospital (ancillary) expense? yes no. _______$£, if any. b. Surgical expenses? yes . . . no.____J>, if any. c. Doctor's calls in the hospital? _ yes no. # if any. 2?. If your plan(s) does your maternity benefits provide also for in-hospit.1 well-baby care of the newborn? yes no. 28. Does your plan provide for a limit per confinement for hos pital room and board which is different than the top limit of the entire plan? yes no. 385 29. Does your plan provide for a different payment for the anes thetist depending on whether it is a major or minor opera tion? ves no. 30. Professional Services for hospital expenses in your plan are paid at rates not to exceed £ of the rates set forth in (fill in) a relative value study (schedule) using a unit vale of $___ . not applicable in your policy. 31. Under your plan to be eligible for hospital benefits you must remain in the hospital hours. not applicable in your policy. 32. For hospital room and board and other hospital services, you will be paid the first $______of eligible expenses plus # of the expenses in excess of $_ . not applicable to your policy. 33» In question 32, the maximum limit of payment under your poli cy is $_______ .____pot applicable under your policy. 3*K Is removal of tonsils and adenoids restricted to one-day con finement in the hospital? ves no. not appli cable. If no. is stay restricted to another number of days? jres po. If ves. days. 35• Does your plan limit the number of doctor calls in the hos pital per illness? ves no not applicable. If ves limit number of calls. 36. Does admission to a hospital under your plan require a de posit before entry? yes no not applicable. 37. Can admission to a hospital under your plan be made try as signment (form)? yes no not applicable. 38. Does your plan provide for a deductible amount for: - (in the hospital) - (other than a blanket deductible for the entire plan) a. Other hospital expenses? ye3 no. $ deductible amount, if any. b. Surgical expenses? yes no $ deductible amount, if any. 386 c. Doctors calls in the hospital? yes no. $ deductible amount, if any. 39. Does your plan provide for a deductible amount for hospital room and board, other than a blanket deductible for the en tire plan. yea no pot applicable. If yes. $ deductible. II - SURGICAL QUESTIONS 1. Your plan has a fee schedule, no fee schedule: for dependents also yes no. 2. Is surgery limited to cutting? yes po. 3. May "covered surgery be applied in the doctor's office of hospital? yes no. If no ■ where only__________. Are surgery benefits renewable for the same conditions. yes no: a new illness ves no _not appli cable . 5* Question k, after days renewable not applicable. 6. Your surgical benefits are renewable under your plan for unrelated causes; upon return to work, or after _ days. not applicable. 7. Your surgical benefits are renewable under your plan for related causes; upon return to work, after days or not applicable. 8. Does your plan provide for a deductible amount for (other than a blanket deductible): (outside the hospital) a. Surgical expenses outside of the hospital? yes no. deductible (if any) b. Other hospital expenses yes no $ deductl- ble (if any) c. Doctors calls yes no $ deductible (if any) 9. When more than one operation is performed at the same time, does your plan provide for payment from a fee schedule or specified amount for both operations or only the most ex- 387 pensive fee? most expensive fee provides for pay ment above the amount of one operation. 10. Does your plan use a relative value study (schedule)? _____ yes no. not applicable. If ves. whose schedule Veterans Adhainistration Schedule, State Medical Association Schedule, other. 11. Is there a limitation in your health plan that payment for full surgical benefits will only be made in eases involving hospitalisation? yes no not applicable. 12. In cases where full payment is made for surgical purposes in hospital cases, does the type of hospital services used af fect the right of full payment? yes no not appli cable. 13• Does your plan provide for a co-insurance factor (other than a possible blanket co-insurance) outside the hospital? a. Surgical expenses yes no. If yes # co- insurance, if any b. Other hospital expenses yes no. if yes % co-insurance, if any c. Doctors calls yes no, if yes % co- insurance, if any i n - mmL-mgnm. 1. Your plan covers doctor’s visits in the hospital yes _ no up to & per day. To dependents yes no. _______ other. 2. Hcoe and office doctor visits are available to employees, if sick or hurt. yes no: Payment up to $_____ per day for office visit: & per day for home visit. Maximum per year (if any) & Also for dependents yes _____ no. 3. Does your plan provide for: a. No charge for group member doctor yes no not applicable b. Services of other than group member doctor, the member pays any cost above the fee schedule allowance 388 yea no not applicable. 4. Does your plan provide for: a. Surcharges? no ____ yes. b. Hcrae calls? no yes. 5. Medical care and treahaent for home, office, and hospital visits in your policy are set at a maximum cost of $ ,______ per calendar year. not applicable. 6. Does your medical plan provide a # of out of hospital expenses over the first $ up to $______each year? (i.e. 8o£ of out of hospital expenses over the first $50 up to $1,000 a year). not applicable. 7. Does your plan provide coverage for consulting or specialist’s visits to a patient in the hospital? ves no not applicable. 8. Does your plan provide for co-Insurance other than a blanket co-insurance for the entire plan for: a. Doctor's calls in the hospital? yes no ___$ co-insurance, if any. b. Doctor’s calls at home? vea no. # co- insurance, if any. c. Patients calls in the office ves no co-insurance, if any. 9. Does your plan have a deductible for medical services in the hospital, other than a blanket deductible for the entire plan? yes no not applicable. if yes, $_____ deductible. 10. Does your plan have a deductible for medical services outside the hospital, other than a blanket deductible for the entire plan? yes po pot applicable. if yes, $______ deductible. 11. Does your plan provide for a deductible amount for: (other than a blanket deductible for the entire plan) 389 a. Doctor's calls in the hospital ? yes no $ deductible amount. If any b. Doctor's calls at hone? yes no & deductible amount, if any c. Patient'8 call at the doctor's office? yes no $ deductible amount, if any 12. Does your plan proride benefits for a patient's visit to the doctor's office? yes no not applicable. 13* If your plan does provide benefits for a patient’s visit to the doctor's office, the benefits start with the visit. in case of sickness, the visit. 14. Does your plan provide benefits for; a. Doctor's visit to the home or outside of the hospi tal? yes jio____ not applicable. IV - EXCLUSIONS QR INCLUSIONS 1. Does your plan cover the expense of: a. All drugs and medicines in the hospital no. $_______limit, if any. b. Physiotherapy and hydrotherapy? yes no. $ limit. if any. c. X-ray and radium treatment? yes no $ limit, if any. d. Rental of an iron lung, bed, therapeutic equipment, (corrective orthopedic) yes po $_______ limit, if any. e. Prosthetic or orthopedic devices? yes no. $ limit, if any. 2. Are the following excluded from coverage: a. Workman's Compensation Insurance? yes 390 b. In government hospital or at government expense? ves no. c. Injury or sickness as an act of war? yes no. d. Services rendered try immediate family? ves no. 9. E^re glasses, refractions, hearing aids, except as needed due to an accident? yes no. f. Other_______________ 3. Does your plan exclude: cosmetic surgery not in connection with an accident or repair? yes : no. 4. Are personal comforts in the hospital or home covered under your plans? (i.e. such as radio, T/V, beauty, barber) ____ yes no. not applicable. 5« Does your plan limit examination for mental conditions to diagnosis yes no. if yes, not to exceed ____ _ not applicable. 6. Are your employees are covered for X-ray and laboratory exami nations made for diagnostic purposes not requiring hospitali zation. ves. no. A maximum of & a year will be paid for each illness per year only $_______ amount. Also for dependents. yes no. Diagnostic and laboratory coverage includes: (question 7) a. Dental Examination or treatment (other than for repair). yes no. b. Eye examinations yes no. c. Routine physical check ups yes no. d. ___________other. 8. Does your health plan exclude: a. Hospitalization for diagnostic studies yes ____po. b. Rest or convalescent cures yes no. e* Rehabilitation care yes no. 391 d. Drugs and medicines used outside the hospital yes no $ limit. e. other. f. Surgery for normal maternity ves no. g. Dental surgery and X-ray (except as a result of accident or illness). yes no. h. Doctor's visits to hospital for conditions resulting from pregnancy yes po. i. Treatment of congenital deformities ye3 no. $ limit. j. Pre or post operative care yes no. 9. Does your coverage in the hospital include meals regardless of cost or a illness? yes po a. Dietary service yes po. b. General Nursing Care yes no. or $_____limit. c. Special Duty Nursing ves po, or $____ limit. d» Operating Room. ___yes po, or $ limit. ©. Cystoscopic Room yes no. or $ limit. f. Splints, casts, dressing, anesthetic supplies yes no. or $____ limit. g. Treatment of allergies yes no. or $ ..... limit. h. Therapeutic injections yes po, or $ limit. i. Sterilization yes no, or $_____ limit. Intravenous injections and hypodermics for sedation yes no, or & limit. k. Oxygen yes no. or $.. limit. 392 1. Basal Metabolism yes no. or $ limit* ». Blood Plasma yes no. or $ limit. n. Whole Blood o. Radium treatment , deep X-ray, isotopes po, or & limit. p. Cobalt yes po, or $______ limit. q. Oxygen equipment and rental yes no. or $ limit. r. Circumcision yes no. more than days old. s. Travel recommended by physician yes no. t. Expenses for custodial care without specific medical treatment yes po, or $ limit. u. Contagious diseases requiring isolation ,„yes _____ no* not applicable. y. Diseases medically determined to be incurable yes no not applicable. w. other. Diagnosis X-ray and ancillary coverage is provided as follows, without charge? — a. Electrocardiograms surcharge. $_ b. Diathermy yes surcharge. $_____if any c. Heat treatments yes no surcharge, $ if any d. Massage yes no surcharge, $ if any ©. Whirlpool baths and related physical therapy _jes no surcharge. $ if apy 393 f. Medical or surgical care in the hospital for con ditions not usually treated in the hospital, such as a ccwaon cold or minor cuts Yes _____ surcharge,_$______if any, g. Treatment of Veneral Diseases _ surcharge, $ if any h. Treatment of Sterility, Frigidity, and Impotency yes no. surcharge. $ if any. i. Treatment for injuries received while engaged in committing or attempting to commit a felony or wrongful act involving moral turpitude? yes no surcharge. $ _____ if any. j« Treatment for Orthopedics yes no surcharge, $„ ;Lf any k. Attempts at suicide or intentionally inflicted injury or illness. yes po. 1. Alcoholism yes no. m. Armed Service connected disabilities yes po. n. Conditions resulting from a major disaster or epidemic ves ___po. o„ Engaging in a riot _ yes ,„_no. p. Ifyperopea, myopia, or astigmatism ___yes po. v - GENERAL MOTIONS 1. Does (do) your plan (s) provide for high and low options applied to the same plan? yes no. If your plan provides high and low option, please answer questions based on the high option choice. 2. Are all school district or city personnel eligible for the health plan? ves no not applicable. 394 3* If Q2. in question 2, excluded are the: a. certificated b. classified_______ . c* other . d. dependents « (Please check those excluded) 4. Employees not Joining at the time of the start of the plan have no waiting, days before being eligible to Join. 5. Does your plan have a waiting period wherein an employee must wait a specified period of tine after being employed before being eligible to Join the health insurance plan (s) yes no. 6. If yes, the waiting (probationary) period is days. ____ not applicable. 7. If not Joining in days: number of days after employment the employee must wait days before becoming eligible to Join. not applicable. 8. Your health plan is good only in your state, ^anywhere in the U. S., anywhere in the world, dependent coverage the same yes no. 9. If an employee leaves the Job, he has conversion privi leges, po conversion privileges to an individual plan with the same carrier. ____pot applicable. 10. Conversion privileges (question 9) include base plan only, _____base and major medical, major medical only, other. pot applicable. U. Is the individual plan (question 10) as couplet® a coverage as when employed? yes no. Is the cost higher? lower? the same? 12. Dependents are covered between the ages of and . 13. Does coverage for adult dependents include spouse yes no. other than spouse yes po. 395 Ilf. Does your plan provide for all benefits to each employee re gardless of Income? yea no. 15. Are there provisions made to use Christian Science Prac titioners or so called Doctors who are not licensed phy sicians or surgeons in your state? yes no. 16. Must your employees have selected a two-party or family type coverage to be eligible for a maternity benefit? yes po. I?. Is physical examination required before an employee becomes eligible for the health plan? ves no. 18. Must an employee work a specified number of hours each month to be eligible for your health plan? yes no. 19. If 18 is yes; please indicate the number of hours a month to qualify. 20. If an employee is absent from work due to sickness or ill ness does the health plan become effective for him to Join the day he returns to work? yes no. 21. If not, when does he become eligible? days not applicable. 22. Is there any limitation as to the doctor (if licensed by the state as a physician or surgeon) or hospital selected (if he has operating and bed facilities) by the employee? yes no. 23. Under your plan can expenses incurred only after joining the plan count toward satisfying the deductible? jres no not applicable. 24. If the employee is deceased, does your plan provide for a privilege of the spouse (who is not the employee) of en rolling in your individual version of the group plan with out a waiting period? yes no. 25. If the employee is cbceased, does your plan provide for a privilege of the spouse (who is not the employee) of en rolling in your individual version of the group plan with a waiting period? yes no. 396 26. Do you hare varying deductible amounts and varying co- insurance amounts on different types of benefits within your plan? ves no. (i.e. 100$ no deductible on hospital — and 90$-10$ co-insurance on accidents; $50 deductible and 80-20 co-insurance on diagnostic, etc.....). 27. Does your plan make provision for a higher degree of cover age and/or a lower cost depending on the salary of the em ployee? yea no. 28. Is (are) your plan (s) voluntary in that an employee may join at his choice or compulsory and must join your plan(s) if he is employed by your Company or District. Voluntary Compulsory. 29* Does your plan provide for employees on leave of absence without pay to be covered for a period of time with the health plan cost being shared with the employer (if this is the procedure with active employees) or at the expense of the employee? or no expense to the employer or employes? not applicable. 30. In question 29. if your answer indicated coverage. Please indicate it for a specified period of timet days covered while on leave of absence. Not applicable. 31* When an employee leaves your City (District) is there a period of time for extension of coverage to permit the employee to convert from group coverage to an individual coverage without medical examination? yes no. Without cost to the District (City) or employee? yes no. If yes, ___period of time (days). 32. Does your plan provide continuity of coverage such as pre vention, disability, retirement, etc. yes po. 33• Do you feel your benefits are adequate for your area and types of groups covered? yes po. 34. Do you feel your plan has any built-in abuses, such as providing diagnostic X-ray only when the patient is hospi talised and therefore incurring a hospital cost to get diagnostic services yes no. 35• Does your health plan provide service for and thus en courage early diagnosis of disease and preventive medicine yes no partially. 397 36. Does your health plan provide service for and thus encour age treatment for rehabilitation of chronic disease and mental illness? ves no partially. 37* Is there an age limit in your plan beyond which you cannot join? yes no. 38. If you have a Basic Service Plan superimposed by a Major Medical Plan, can you join one without joining the other? ves no. 39® Does your plan provide for both the so -called restricted (closed panel) and unrestricted (open panel) use? yes no. (Restricted — use only group plan designated doctors) (Unrestricted - use non-plan doctors but reimburse ment only at the amount paid to a participating doctor.) 40. Does your plan provide for the use of surcharges (service charges above plan coverage) to control certain benefits? yes no not applicable. 41. Does your plan provide for using the Provision of Plans in another area (where the other area has the same general plan or-such as Kaiser)? res no not applicable. 42. Does your plan use a relative value study schedule other than for Surgery? yes no. If yes, please identify sched ule used: State Medical Association Veterans Admmln- istration, other. 43. Does your plan for the payment of a non-participating doctor (unrestricted group practice) at the rate of that of a group participating doctor? yes no. 44. Under your plan can a person be covered as an employee and a dependent? yes no. 45. Under your plan does the Insurance Carrier have the right of subrogation? (In the event the participating employee or covered dependent is entitled to receive payment from any other person (s) as a result of legal action or claims with respect to expenses paid or reimbursed to him under this plan, the Plan Insurance Carrier shall be entitled to the rights of subrogation against such other person (s).) yes ___ no not applicable. 398 46, Does your plan provide for benefits to a person on authorized leave of absence without pay (who has become totally dis abled) provided his benefits have been paid up. ves no. 4?. Is there any quality control provision (by committees or otherwise) in your plan (s) yes no. 48. In the Major Medical (Portion of your) plan, what is the yearly limit of coverage? $______ . $ Lifetime? Not applicable. 49. Is there any portion of your Major Medical Plan that pays a different deductible and co-insurance factor than the rest? yes no Not applicable. 50. If you have a basic service plan and major medical, must the basic service plan satisfy all expenses within its obligation before turning to the major medical coverage for payment? yes no not applicable. 51. Can you reinstate your full maximum Major Medical Insurance (if you have incurred claims) exceeding $ .) by furnish ing the Insurance Company with satisfactory evidence of good health? yes no not applicable. 52. Is there an excess insurance clause in your health plan whereby no payments are made if an employee receives payments under provisions of another health plan? yes no not applicable. 53« Does your health plan(3) specifically exclude duplication of benefits? yes no not applicable. 54. Does your plan(s) have a separate deductible for psychiatric care? yes no not applicable. 55. If yes to the above question 54, the deductible for psychi atric care is $________ •_____ pot applicable. (If different than the regular deductible.) 56. Does your plan have provision for well-baby-care in the doc tor's office? yes po pot applicable. If yes, _____ (number of) calls within months from date of birth. 57. Does your plan(s) provide for application of a satisfied de ductible amount during the last three (3) months of a 399 contract period to also satisfy the deductible requirement for the next contract period? yes no other than 3 months (please indicate months). not applicable. 58. Does your health plan provide: ______ duplicate benefits with your State Disability Insurance? operates after the State Disability Insurance program benefits have been exhausted? can be integrated with State Disability Insurance benefits? provides no coverage if State Disability benefits are available? not applicable. 59. Do you know the number of employees that have a spouse work ing who also has subscribed to a health plan? yes no not applicable. 60. Do you feel that the female content of your plan is to a large extent covered under the husband's health plan where he is employed res no not applicable. If yes, 4> covered elsewhere. 61. Does your plan have one blanket deductible to satisfy before the plan's benefits commence? ves____no___ not appli cable t deductible amount (if any). 62. If your plan has converting coverage, is it cancellable? yes no not applicable. 63. Does dependent coverage under your health plan make an ex ception or extend the age limit of dependency, unmarried students to an age greater than if he or she were not a student? ves no. If yes, extend coverage to _ years old. (i.e. dependent coverage terminated at age 19, If a student unmarried, age 23). 6^* Do you have a basic service type plan only? . y es no. 65. Do you have a major medical type plan only? yes _no. 66. Do you have a basic service type health plan with a supple mental major medical type superimposed? yes_ po. 67. Does your plan have one blanket co-insurance factor to cover all benefits offered? yes no not applicable. - SPECIAL COVERAGE QUESTIONS 1. In maternity care there is no limit or & limit cover age. Dependents also ves no. Is allowance given for Caesarean or ectopic pregnancy. yes no. 2. Your employees are covered as a result of an accident for any hospital or doctor expenses not covered by the Basic Plan. yes no. Dp to days after the accident; up to a maximum of t . (not. including Major Medical) 3. Is there a waiting period for any portions of the contract? yes no. Maternity? yes no. Other Waiting period in question 3 is months. not appli cable. 5. Does your plan provide for payment of a sanatorium for tu berculosis treatment? yes no. Cancer treatment yes no. other. 6. What cost limits and time limits to question 5 (if any)? $______ . ____ days for Cancer? $_____days________ _for Tuberculosis. not applicable. 7. Does your plan include life insurance benefits? yes no. 80 If yes on ?, what is the dollar maximum amount of your life insurance? $ . not applicable. 9. If you become totally disabled before reaching age ____, (please fill in if applicable.) will your life insurance plan continue without any cost to the employee? yes no. Modified Cost? yes no. 10. If your plan has a life insurance policy, is It sold on a term basis? yes _ _ po other not applicable. 11. If your plan provides for accidental death and dismemberment insurance, does it provide for payment for occupational surgery only; pon-occupational only (not on the job) not applicable, (check one please) 401 12. Does your plan provide for accident, sickness. ______ disability payments on a (daily) (weekly) (monthly) basis when an employee cannot work due to an accident or sickness? not applicable, (please check areas of coverage) (please circle unit of time - i.e., weekly, etc.) 13. If you have an accident and sickness and/or disability policy in your plan, the maximum duration for which the benefit will be paid is weeks and the amount per week is $____ not applicable. 14. If you have an accident and sickness and/or disability policy in your plan, do you have a waiting period before the employ ee starts collecting the benefits? yes no. If yes, the waiting period is days. not applicable. 15. If your plan provides for an accident, sickness and/or disa bility benefits is the amount the same for all employees in the group or graded depending on the employee's earn ings. not applicable, (please check one) 16. Does your plan provide for care of the newborn child during the mother's confinement? yes no not applicable. 17. Does the life insurance benefits extend to the dependents? yes no. If yes, what amount to spouse $_____ , children $ . 18. Does your life insurance provision have a conversion clause to permit continued coverage independent of Basis Service and/or Major Medical Plan should an employee leave your employ? ves no. 19. Is there a limit in your accidental death and dismemberment coverage on the loss for one accident? ves jno. pot applicable. 20. If yes to 19, the limit (dollars payable) is $ ___ not applicable. 21. Does your plan have a provision for polio coverage? yes no. not applicable. 22. If ves to 21, the maximum dollar limit is $______ . _____ not applicable. 402 23. Does your plan have an accident and sickness benefit payment clause (periodic income) for total disability? yes __ no. 24. If ves on 23 for an accident the coverage begins the ___ day after the sickness occurred. not applicable. 25. If ves on 23 for a sickness the coverage begins on the ___ day after the sickness occurred. not applicable. 26. If yes on 23, the maximum number of days for income payment of a (disability is defined as unable to perform his regular duties) disability is . not applicable. 27. Does coverage extend to sickness and accidents on and off the job? yes po. 28. Does the coverage on 23 extend to pregnancy? yes no. 29. Ambulance benefits of your plan are on a per disability or per trip basis? (please check one) 30. Ambulance benefits amounts under your plan in dollar amounts are $______ per trip or $ per disability, _____ other, not applicable. 31. If you do allow your retired employees to participate in your plan, is there a specified period of time they must have been employed as a permanent (regular) employee of your district yes po. If yes period of time (days). pot applicable. 32. If you do allow your retired employees to participate in your plan is there a requirement that their active position must have required a specified number of hours a week regularly? yes no. If yes number of hours. not appli cable. 33. If in question 32, the employees hours drop below the speci fied amount, is there provision for special appeal to a board or agency to remain in the plan for a specified period should the present "hour drop below minimum requirements" be only temporary? yes no not applicable. 34. Does your plan provide for any deductible amount to be satis fied specifically for drugs and prescriptions before such 403 amount will be counted to apply to out-of-pocket expenses to satisfy a general blanket deductible amount In your plan? yes no. (i.e. $50 blanket deductible one a year to each member, however the first $30 expenses for drugs and prescriptions outside the hospital may not be applied on the deductible)* 35. Does your plan have a limit on expenses for pulmonary T.B? yes no or no coverage at all? yes no. 36. Does your plan provide for drugs and prescription at reduced member cost? yes po. 37. Does your plan provide for expenses for psychiatric counsel ing at medical centers? yes no. Elsewhere? yes no. 38. Does your plan provide for eye glasses furnished at reduced cost? ves no 39* Does your plan provide for benefits for congenital conditions? yes no. If ves. is the service provided only once? __yes_____po. If yes. $________limit if any. 40. In plans providing that the patient pay hospital and doctors' charges for maternity after a specified number of days, do the day restrictions apply in case of severe complications due to pregnancy? yes___ no___not applicable. 41. Are home calls limited to specific distance limits? (i.e. city limits, etc.) yes___ no___not applicable. If yes. please give limits, (miles, etc.) 42. Do you have special "dread” disease payment limits? po. pot applicable. 43. If ves to question #42, your limits are: a. Cancer $_ b. Tuberculosis $_ c. Polio $_______ d. Other $ _not applicable. 44. Does your plan have deductible for maternity service other than a blanket deductible for the entire plan? yes no not applicable. If yes. $_______ deductible. 404 45. Are benefits outside of the service area limited to a maxi mum allowance under a special fee schedule (i.e. Industrial Accident Commission)? yes no not applicable. 46. Is the following included in your plan coverage? - Mental illnesses or disorders (beyond diagnosis) yes po. If yes, full cost. yes no or & per treatment not to exceed $ per illness with a maximum payment limit of $ or the first $ for each confinement. ________ Other. not applicable. VII - DENTAX QUESTIONS NOTE— *1. Do you have a Dental Plan covered under your health plan's benefits? yes po. ♦Please answer the following questions under this dental section ONLY IF you have a Dental Plan. 2. If your plan provides Dental care, is it prepaid^ _yes no. 3. If your plan provides Dental care, are there provisions for: a. b. c. d. 9. f. g* h. i. j. k. 1. Quality control? yes no. Dependents' coverage only? yes no. All Employees' coverage only? yes po. Both the employees and dependents covered? yes no. Children only covered? yes no. Are facilities and equipment owned by the City (District) yes no. Is there exclusion for orthodomy? yes no. Is there a fee schedule (Relative Value Study Schedule) in operation yes po. If ves to (h) does the Dentist accept as full pay ment the fee schedule? yes not applicable no. Is there an income limit (salary not more than "X" dollars) to receive full benefits under the plan? yes no. Are more dollars budgeted for care the first year? yes no. Is the plan you have indemnity type (reimbursement to the employee) or service type plan? ,relm- bursament or service type (please check one)_ _. i+05 ra. Does your plan have a waiting period yes no. n. Are there pre-existing conditions in your dental plant yes no. o. Is payment to the carrier or group practice based on enrollment or patients seenT (please check one) p. Is there a percentage ceiling established on ad ministrative costs in your plan? ves no. q. Do you use surcharges in your plan? yes po. r. Do employees have a choice of restricted, group practice personnel, or (unrestricted) any licensed dentist in your plan? yes no s. Is your plan voluntary ? compulsory ? (please check one) t. Is your plan based on a per cause or all causes? u. Are there provisions under your plan for retired personnel? yes no. v. Do you have a system of claims analysis under your plan? yes no. w. Do you have provision for preventive care in your plan? yes no. x. Is your plan based on the co-insurance principle? yes po. y. Does your plan have a deductible? yes po. If yes. j > amount of deductible. SECTION 17: COMPREHENSIVE (FIRST DOLLAR) COVERAGE : You may find it convenient to have your insurance agent com plete this Section IV for the School District or City, X£ the District or City has this type of Health Plan Coverage. mzLWi ansmm 1. Does your plan pay a percentage of expenses up to a specified sum, and then a different percentage of the remaining ex penses for hospital expenses? yes no. 2, If yes on question 1, please indicate figures, i.e. 100$ of first 500 and 80$ thereafter— or if pays 100$ of all expenses, please indicate, etc. _____ _________ . not applicable. 3. Is there a limit on the amount to be paid per day for a room at the hospital? yes no. not applicable. <+. If yes on question 3« please indicate limit $ and days (if applicable). not applicable. 5. Does your plan cover expenses for nursing services either in the hospital or at home? yes no not applicable. 6. Does your plan include full payment for administration of anesthetics? yes jno not applicable. ?. Is there a maximum benefit per day on hospital payments? yes no $ amount. (If ves) not appli cable. 8® Is there a maximum per disability on hospital benefits? _____ yes no $ amount. not applicable. 9. Do you have a maximum payment per (day) (week) for treatment in the hospital? yes po. If yes, $_______amount, not applicable. Please circle (day) or (week) as appli cable. 10. Is there a separate schedule of benefits and services for de pendents than that for employees? yes __ no. ho6 1*07 U. If ves on question 10, is there a maximum dollar amount for benefit per day in the hospital for dependents? res no. $ amount, if yes. not applicable, 12. If yea on question 10, is there a maximum dollar amount per disability benefit for hospital benefit for dependents? yes no $_________amount, if yes. not appli cable . 13. If vea on question 10, is there a maximum dollar amount hospital services per day (anesthetists, supplies, etc., (ancillary services) for dependents)? yes po not applicable. ll*. Is there a maximum dollar amount for medical treatment per day for treatment received at the hospital? ves no. If yes. $________amount. not applicable. 13. Does your plan make any provision for doctors' or nurses' payments while an employee or dependent is in the hospital? yes po. pot applicable. 16. In payment of hospital services, other than room and board does your plan provide for: a. Cash reimbursement to a fixed amount. if yes, maximum amount & ? b. Unlimited coverage on a service basis, at no extra cost yes po. e. Cash reimbursement to a fixed amount plus additional reimbursement on a percentage basis yes no. If yes, $__________plus # of the next $. .(i.e. first $200 plus 8056 of the next $1,000.) d. Other. 1?. For unrelated conditions your hospital benefits are renew able_________immediately, ________after complete recovery, upon return to employment, or in _____days after hospital discharge. pot applicable. 18. For related conditions your hospital benefits are renewable upon return to work, _____ complete recovery days after hospital discharge, or not renewable at all. not applicable. A 08 19* Does (Do) your plan(s) provide for a period of tine speci fied to be continuously In the hospital to be classified as a hospital patient? yes no. If yes. number of continuous hours, or if emergency less than hours but within hours of the time the emergency began. _____ not applicable. 20. Does your plan cover your employees in full for hospital ex penses up to a specified sum. yes no. If yes. up to $ . ______ not applicable. 21. If the hospital expenses exceed the "up to" amount in ques tion 20, what is the co-insurance factor (if any) above that amount? not applicable. 22. If your plan covers hospital expenses, what is the top limit? $___ _• 23. If there is a top limit, is this for a one year period or for a lifetime of the policy? Please indicate if ______ other. not applicable. 24. Doe6 your plans provide for hospital expenses related to out patient surgery? yes no not applicable. 25* Do (does) your plan(s) provide for benefits if the employee is hospitalized at the time of the effective date of the instituting of your plan? yes no. If yes. & limit, if any. not applicable. 26. Dogs your plan provide for a Co-insurance for; a. Other hospital expenses? ves no __ if any. b. Surgical expenses? yes no $>. if any. c. Doctor call in the hospital? yes no ^. if any. 2?. In your plan(s) does your maternity benefits provide also for in-hospital well-baby care of the newborn? ves no. 28. Does your plan provide for a limit per confinement for hos pital room and board which is different than the top limit of the entire plan ves no not applicable. A09 29. Does your plan provide for a different payment for the an esthetist depending on whether it is a major or minor opera- tion? ves no not applicable. 30. Professional Services for hospital expenses in your plan are paid at rates not to exceed # of the rates set in a relative value schedule using a unit value of $ . not applicable in your policy. 31. Is removal of tonsils and adenoids restricted to one-day confinement in the hospital? ves no not appli cable. If no, is stay restricted to another number of days? yes no. If yes, days. 32. Does your plan limit the number of doctor calls in the hos pital per illness? yes no not applicable. If yes. _____ limit number of calls. 33« Does admission to a hospital under your plan require a de posit before entry? ves no not applicable. 34. Can admission to a hospital under your plan be made by as signment (fonn)? yes no not applicable. 35- Does your plan provide for a deductible amount for: - (in the hospital) - (other than a blanket deductible for the entire plan) a. Other hospital expenses yes _ no $ deductible amount, if any. bo Surgical expenses yes no £ deductible amount, if any. 36. Does your plan provide for a deductible amount for hospital room and board other than a blanket deductible for the en tire plan. yes po not applicable. If yes, £ deductible. 3?. Does your health plan provide for a specified dollar limit for hospital benefits? yes no pot appli cable. 38. Is there a dollar limit based on a maximum amount for a specific disability? yes no. If yes, $_____ „ maximum per disability. not applicable. - amgAkjffljgmf c 1. Do 70a have a cash deductible for surgical expenses other than a blanket deductible for the entire plan? ves no. 2. If yes to Question 1, please indicate deductible and limits. $ (Limits, if any) not applicable. 3* Does your health plan cover expenses for a state licensed physician or surgeon? ves no for some treat ments only, pot applicable. h. If surgery is needed as an outpatient in a hospital are all supplies and services paid for by your plan? yes no _____not applicable. 5* If D2. to Question h, are all expenses paid except nurses' and physicians' fees? yes no not applicable. 6. Does your plan treat Question h as co-insurance. de- ductible, or pay all expenses? not applicable. Does your plan have a fee schedule for surgical charges? ves no ________ not applicable. 8. Do you have a fee schedule for surgical payments per dis ability? yes po pot applicable. 9. Does your plan have a surgical fee schedule for dependents? yes no not applicable. 10. If ves on Question 9. is it more less same than for the employee? ______ not applicable. 11. Your surgical benefits are renewable under your plan for un related causes; upon return to work, after com plete recovery, immediately. or after days. 12. Your surgical benefits are renewable under your plan for related causes: upon return to work, after complete recovery, Immediately , after _____days or not specified. 13. When more than one operation is performed at the same time does your plan provide for payment from a fee schedule or 411 specified amount for both operations or only the most ex pensive fee? most expensive fee, provides for payment above the amount allowed of one operation on the schedule. lh. Is there a limitation in your health plan that payment for full surgical benefits will only be made in cases involving hospitalization? yes no not applicable. 15- In cases where full payment is made for surgical purposes in hospital cases, does the types of hospital services used af fect the right of full payment? ves no not appli cable. 16. Does your plan provide for a co-insurance factor (other than a possible blanket co-insurance) outside the hospital? a. Surgical expenses? ves no. If yes. ______# co-insurance, if any. b. Other hospital expenses yes no. If yes. _$ co-insurance, if any. b. Doctor's calls yes no. If yes, ____$ co-insurance, if any. Ill - MEDICAL QUESTIONS 1. Would payment for medical treatment benefits for dependents begin on the first day of illness? yes po. If no, day. not applicable. 2. Under you plan is there a period when one sickness is said to end and a new sickness commence even though it may be the same sickness? yes no. If yes. ______period of time lapsed (months) between treatment. 3. Under your plan in determining days of treatment (see ques tion 2 above) must a licensed physician or surgeon be in attendance? (not just a nurse?) yes . . . . no not applicable. h. May payment be made for more than one treatment per day? _____yes po. 5. Does your plan provide for: 412 a. No charge for group member doctor ves no. b. For services of other than group member doctor, the member pays apy cost above the fee— schedule allow ance ves no. c. Other, not applicable. 6. Does your plan provide for: a. Surcharge for group practice? yes po. b. Home calls? res po. c. ______other, not applicable. ?. Medical care and treatment for home, office, and hospital visits in your policy are set at a maximum cost of $______ per calendar year. pot applicable in your policy. 8. Is there a dollar limit on outpatient diagnostic care? ____ yes no not applicable. If yes $_______limit. 9. Does your plan provide for consultation with specialist if needed? yes po not applicable. 10. If there is an additional charge for consultation of a specialist, the charge is $_______. pot applicable. 11. Does your health plan make special provisions for the doctors long detentions with a patient in your schedule of charges? yes no not applicable. 12. If your plan(s) restricts your employee's use to certain doc tors, do you feel you have an adequate selection of special ists and general practitioners? yes no not appli cable . 13- Is visiting nurses service provided under your plan's bene fits? yes no not applicable. 14. Does your plan provide for co-insurance other than a possi ble blanket co-insurance for the entire plan for: a. Doctor's calls in the hospital yes no / co-insurance, if any. b. Doctor's calls at home yes no if any. c. Patient's calls in the of floe yes no % co-insurance, if apy. -413 15. Does your plan have a deductible for medical services in the hospital other than a possible blanket deductible for the entire plan? yes no not applicable. If yes. $ dedu ctible. 16. Does your plan have a deductible for medical services outside the hospital, other than a blanket deductible for the entire plan? ves no not applicable. If ves. $ deductible. 17. Does your plan provide for a deductible amount for: (other than a blanket deductible for the entire plan) a. Doctor's calls in the hospital yes no. $_______deductible amount, if any. b. Doctor's calls at home yes no $ _____ deductible amount, if any. c. Patient's call at the doctor's office yes no $_________deductible amount, if any. 18. Does your plan provide benefits for a patient's visit to the doctor's office? yes no pot applicable. 19. If your plan does provide benefits for a patient's visit to the doctor’s office, the benefits start with the visit, in case of sickness, the visit. 20. Does your plan provide benefits for: a. Doctor's visit to the home or outside of the hospital yes po_____not applicable. 21. Does your plan provide coverage for consulting or special ist's visits to a patient in the hospital? yes __ po pot applicable. 22. Does your medical plan provide $ of out of hospital expenses over the first $ up to $_______each year? (i.e. 80$ of out of hospital expenses over the first $50 up to $1,000 a year) pot applicable. IV - EXCLUSIONS OR INCLUSIONS 1. Does your plan cover the expenses of: AU a. All drugs and medicines in the hospital? yes ___ no $_______ limit (if any) b. Physiotherapy and hydrotherapy? _ye3 po. $ limit (if any). c. X-ray and radium treatment? yes no. $_____ limit (if any). d. Rental of an iron lung, bed, therapeutic (corrective) equipment yes no $ limit (if any). ©. Prosthetic or orthopedic devices? yes no. $_________limit (if any). 2. Are the following excluded from coverage: a. Workman’s compensation Insurance? yes no. b. In government hospital or at government expense? ______yes no. c. Injury or sickness as an act of war? ves___no. d. Services rendered by immediate family? ves no. e. l$ye glasses, refractions, hearing aids, except as needed due to an accident? ves no. f. _______ _ Other. 3. Does your plan exclude: cosmetic surgery not in connection with an accident or repair? yes no. Are personal comforts in the hospital or home covered under your plans? (i.9. such as radio, TV, beauty, barber) yes jxo not applicable. 5* Does your plan limit examination for mental conditions to diagnosis yes no. If yes, not to exceed $_______ . pot applicable. 6. Your employees are covered for X-ray and laboratory examina tions made for diagnostic purposes not requiring hospitali zation. yes no. A maximum of $ will be paid for each illness per year $___amount. Also for dependents ves no. 415 7. Diagnostic and laboratory coverage includes: (Question 7) a. Dental Examination or treatment (other than for repair) ves no. b. E |y e Examinations yes jno. c. Routine physical checkups yes no. d. _________Other. 8. Does your Health Plan exclude? a. Hospitalization for diagnostic studies yes no. b. Rest or convalescent cures yes. no. c. Rehabilitation care yes no. d. Drugs and medicines used outside the hospital yes no. & limit. e. Other ____________________________ . yes f . Surgery for normal maternity yes g. Dental surgery (except as a result of accident or illness) yes no. h. Doctor's visits to hospital for conditions resulting from pregnancy yes no. 1. Treatment of congenital deformities yes no. $ limit. j. _______pot applicable. k. Pro or post operative care _____yes_____ no. 9. Does your coverage in the hospital include meals regardless of cost or an illness? ye 3_____ no. a. Dietary service yes no. or $ limit. b* laboratory and X-rays yes no. or $______ , limit. c. General Nursing Care yes no, or $________ limit. d. Special Duty Nursing ye3 no, or $.______„ limit. e. Operating Room yes po, or $______limit. f. Cystoscopio room yes no. or $ limit. g. Splints, casts, dressing, anesthetic supplies ____ yes ______po, or $______ limit. h. Treatment of allergies yes ___ no, or $________ limit. i. Therapeutic injections yes no, or $_______ limit. j. Sterilization yes po, or $ limit. k. Intravenous Injections and hypodermics for sedation yes no. or & limit. 416 1. Oxygen yes no. or $_______ limit. ra. Basal Metabolism yes no. or $ limit, n. Blood plasma yes no. or & limit. $ Surcharge (if any). 0. Whole blood yes po, or $ limit, £ Surcharge (if any) p. Radium treatment, isotopes yes no. or & limit. q. Cobalt yes po, or $ limit. r. Oxygen equipment and rental yes no, or $ limit, s. Circumcision yes no - More than , ____ days old. t. Travel recommended by physician yes po. u. Expenses for custodial care without specific medical treatment yes po, or_$________limit. Contagious communicable diseases requiring isolation yes po not applicable. w. Diseases medically determined to be incurable yes_______ no____pot applicable. x. _____other y. not applicable. 10. Diagnotis X-ray and ancillary coverage is included as follows? a. Ele ctro cardiograms____ye s_____no______ . _______ surcharge, $_________ (if any) b0 Diathermy yes no ______surcharge, $_________ (if any) c. Heat treatments yes ____po_______. surcharge. $ (if any) d. Ma33agar a__jres ______po*„ surcharge. $ (if any) ©. Whirlpool baths and related physical therapy yes no. ____ surcharge, (if any) f. Medical or Surgical care in the hospital for con ditions not usually treated in the hospital, such as common cold or minor cuts yes no surcharge. $_______ (if any) g. Treatment of Venereal Diseases yes no__ surcharge, $ (if any) h. Treatment of Sterility, Frigidity and Impotency ___ yes no_____ surcharge, $ (if any) 1. Treatment for injuries received while engaged in com mitting or attempting to commit a felony or wrongful act involving moral turpitude yes no. . surcharges, $________(if any). j. Treatment for orthopedics yes __po, . . . . _ sur~ charge, £ (if any). 417 k. Alcoholism ves no. 1. Aimed Service connected disabilities yes no. m. Conditions resulting .from a major disaster or epi- damic yes no» n. Engaging in a riot yes no. o. Attempts at suicide or intentionally inflicting in juries or illness____yes__no. p. Hyperopea, myopia, or astigmatism yes no. 7 - 1. Does (do) your plan(s) provide for high and low options ap plied to the same plan? yes___po. If your plan pro vides high and low option, please answer questions based on the high option choice. 2. Is emergency transportation, i.e., an ambulance, airline, railroad to a hospital for special treatment covered under your plan? yes no. 3. Coverage of children or unmarried dependents between the ages of and 4. After termination of the employee, the employee or dependent is covered for a day period, (please indicate days 0- 3^5). 5. Do you have an exception in your coverage that limits pay ments for care and treatment of a condition existing on the date of coverage? yes po. 6. Does your benefit period for an illness have a provision wherein after a specified period of time if not over a cer tain sum is spent for the illness, the benefit period ceases? yes no. If yes. days. pot applicable. 7. Does dependent coverage under your health plan make an ex ception or extend the age limit of dependency, unmarried students to an age greater than If he or she were not a student? yes no (i.e. dependent coverage terminated at age 19; if a student unmarried, age 23). If yes. extend coverage to _years old. 8. Would the maximum benefit received under your plan be sepa rate for each disability? yes po. 418 9. 10. 11. 12. 13- 14. 15. 16. 17. 18. 19. Does your plan provide that only expenses incurred after joining the plan serve to satisfy a deductible amount? Are dependents by definition limited to spouse and children with specified age limits? yes no Do you have a maximum payment per (day) (week) for treatment In the doctor’s office? yes no. If ves. $_________ amount. not applicable. (Please circle (day) or (week) as applicable. Do you have a maximum payment per (day)(week) for treatment in the heme? yes no. If yes. $ amount. not applicable. (Please circle (day) or (week) as applicable. Is there a maximum dollar amount for medical payment (or treatment of dependents at home or office?) for dependents? yes no. If ves. $_________amount home, t amount office. not applicable. Is there a maximum aggregate amount for payment to dependents for medical expenses at the hospital, heme, and office, dif ferent than for employees? yes no $_______if yes. not applicable. Must an employee be a full time employee to be eligible for benefits under your plan? yes no. In your plan is there provision for conversion from a group plan to an individual plan on termination of employment? yes. no. If employment is terminated by the employer or employee and the employee Is totally disabled or under treatment at the time of the termination, how many days do the benefits still cover for treatment? days, or & amount— whichever occurs first. not applicable. If under your plan you went beyond the probation period specified in which dependents had to be enrolled, then would such dependents coverage still be effective? _yes no. If no. period of time to wait for dependent enrollment. _______months. If under question #18, your dependent furnishes proof of good health, can enrollment be handled without waiting a period of time even though normally the probation period has lapsed, yes no. 419 20. Does your plan have one method of payment for medical ex penses for hospital and surgical bills and another method of payment for all other medical bills while under a doctor's care? ves no. 21. Do you have varying deductible amounts and varying co- insurance amounts on different types of benefits within your plan? yes no. (i.e., 100# - no deductible on hos pital and 90#~10# co-insurance on accidents; $50 deductible and 80-20 co-insurance on diagnostic, etc...) 22. Does your plan make provision for a higher degree of coverage and/or a lower cost depending on the salary of the employee? 23» Is (are) your plan(3) voluntary in that an employee may join at his choice or compulsory and must Join the health plan if he is employed by your City or District? ^voluntary___ compulsory not appli cable. 2k. Does your plan have a waiting period wherein an employee must wait a specified period of time after being employed before being eligible to join the health insurance plan(s)?____ ves no If ves. the waiting (probationary) period is____days. 25. Does your plan provide for employees on leave of absence with out pay to be covered for a period of time with the health plan cost being_____ (please check) shared with the employer. (If this is the procedure with active employees)__________ or at the Qxpense of the employee? or no expense to the employer or employee? __ not applicable. 26. In question #25, if your answer indicated coverage, please indicate it for a specified period of time: _____days covered while on leave of absence, _not applicable. 27. When an employee leaves your City (District), is there a period of time for extension of coverage to permit the em ployee to convert from group coverage to an individual cover age without medical examination and without cost to the City (District) or employee? yes no. If yes. ________ period of time (days), ____not applicable. 28. Does your plan provide for continuity of coverage such as prevention, disability, retirement, etc.? ye s _no partially not applicable. 420 29. Do you feel your benefits are adequate for your area and types of groups covered? ves no. 30. Do you feel your plan has any built-in abuses, such as provid- diagnostic x-ray only when the patient is hospitalized and therefore incurring a hospital cost to get diagnostic services? 31. Does your health plan coverage provide for benefits for and encourage early diagnosis of disease and preventive medicine? yes no, partially_______ , 32. Does your health plan provide for and encourage treatment for rehabilitation of chronic disease and mental illness? ves _____ no, _____partially. 33* Does your Health plan provide for coverage outside of the United States and Canada? yes po. 3iK Is there an age limit in your plan beyond which you cannot .join? yes no. 35• Does your plan provide for both the so-called restricted (closed panel) and unrestricted (open panel) use? yes no. (restricted - use only group plan designated doctors) (unrestricted - use non-plan doctors, but reimbursement only at the amount paid to a participating doctor), or member of a group but also have solo practice. 36. Does your plan provide for the use of surcharges (service charges) to control certain benefits? yes no. 37. Does your plan provide for using the provision of plans in another area of service (where the other area has the same general plan or such as Kaiser)? yes no not appli cable . 38. Does your plan use a relative value study (schedule) (fee)? yes no. If yes, please identify schedule used._____ _ State Medical Association, _____Veteran's Administration, other. 39* Does your plan provide for the payment of a non-participating doctor (unrestricted group practice) at the rate of that of a participating doctor? yes no. not applicable. hO. Under your plan can a person be covered as an employee and a dependent? ves no. 421 41. Under your plan does the Insurance Carrier have the right of subrogation? (in the event the participating employee or covered dependent is entitled to receive payment from any other person(s) as a result of legal action or claims with respect to expenses paid or reimbursed to him under this plan, the Plan Insurance Carrier shall be entitled to rights of sub rogation against such other person(s).) ves no____ not applicable. 42. Does your plan provide for benefits to a person on authorized leave of absence without pay who has become totally disabled provided his benefits have been paid up? yes no not applicable. 43. Is there any quality control provisions (by committees or other procedure) in your plan(s )? yes no. 44. Is a medical examination required for an employee to join your plan when he is first eligible? yes no. 45. Is there an exclusion clause in your health plan whereby no payments are made if an employee receives payments under pro visions of another health plan? . yes _no, not applicable. 46. Does your plan have provision for well baby care in the doc tor's office? yes no. not applicable. If yes, (number of) calls within months from date of birth. 47. Does your plan have converting coverage that is cancellable? yes no not applicable. 48. Do you know the number of employees that have a spouse working who also has subscribed to a health plan? yes no _ not applicable. 49. Do you feel that the female content of your plan is to a large extent covered under the husband's health plan when he is em ployed elsewhere? yes no not applicable. If yes . _____$ covered elsewhere. 50. Does your health plan(s) specifically exclude duplication of benefits? yes no, not applicable. 51. Does your plan(s) have a separate deductible for psychiatric care? yes___no not applicable. 422 52. If yes. to the above question #53* the deductible for psy chiatric care is $ not applicable. (If different than the regular deductible) 53* Are there provisions made in your plan(s) to use Christian Science Practitioners, or so-called doctors who are not licensed physicians or surgeons in your state? yes no, not applicable. 54. Does your plan(s) provide for application of a satisfied de ductible amount during the last three (3) months of a con tract period to also satisfy the deductible requirement for the next contract period? yes no other than three (3) months (please indicate number of months), ____ not applicable. 55. Does your health plan provide _____duplicate benefits with your State Disability Insurance, operates after the State Disability Insurance benefits have been exhausted, can be integrated with State Disability Insurance benefits, _____ provides no coverage if State Disability bene fits are available? not applicable. (Please check one) 56. Does your health plan provide for a blanket co-insurance factor to cover all benefits under your policy? y®s___ no not applicable. 57- Does your health plan provide for a blanket deductible amount to cover all benefits under your policy? yes____no. If yes. $_____amount deductible. 58™ Can you ro-instate your full maximum insurance (if you have incurred claims) exceeding $________Jay furnishing the in surance company with satisfactory evidence of good health? yes no not applicable. 59- Are all school district personnel or City employees eligible for the health plan benefits? yes no___not appli cable. 60. If qo on question #59, excluded are the following: a) certificated b) classified c) dependents d) Other__________ , ______________ (please specify)(pleas© chock those excluded) not applicable. 423 71 - SPECIAL COVERAGES QUESTIONS 1. What is the normal maternity benefit payable under your plan? $_________, $ _______ Caesarian. $________miscarriage? 2. Does your plan cover expenses or partial expenses for mental or nervous disorders outside of the hospital? ves no. 3. Does your plan make special payment provisions for covering complications due to pregnancy? yes no. 4-. Does your plan make special payment provisions for complica tions related to childbirth, miscarriage? ves____ no. 5. In case of an accident does your plan make provisions for pay ment of hospital services and supplies as an out patient? ves no. 6. In question f5 » are physicians and nurses fees included? yes no. not applicable. 7. Is there a time limit of reporting for treatment after the accident had happened (question #5)? yes no not applicable. 8. Does your plan treat question #5 as a:_____deductible,____ _____ co-insurance plan, or pay all expenses not applicable? 9. Do payments for treatment for accidents commence the first day of the accident? yes no. If no, . __day com mences, not applicable. 10. Do payments for treatment for sickness commence the first day of the accident? yes___ no. If no, ____day com mences, pot applicable. H. Does your plan have a maximum per disability, for x-ray and laboratory tests, for accidents? _yes no. If yes. $_______amount. 12. Does your plan have a maximum per disability for x-ray and laboratory test for sickness? yes no. If yes. $ . 13* Does your plan have an additional accident expense benefit maximum for employees in addition to your other benefits? yes no. If yes. $ amount. A2 U 1A. In your plan do you have a maximum dollar amount for mater nity payment? yes no. If yes. $__________amount. 15. In plans providing that the patient pay hospital and doctors charges for maternity after a specified number of days, do their day restrictions apply in case of severe complications due to pregnancy? yes no not applicable. 16. Does your plan have a deductible for maternity services other than a blanket deductible for the entire plan? yes____ no not applicable. If yes. $_________ ^deductible. 17. In your plan is the diagnostic laboratory and x-ray examina tion benefits maximum dollar amount apply to dependents? yes no. If ves. $__________amount. not applicable. 18. Does your plan have an additional accident expense benefits dollar amount for dependents? yes no. If yes. $_________ _amount. 19. For maternity benefits must your employees be insured nine (9) months before such benefits began under your plan yes _____po. 20. Under your plan after termination of the employee, are ma ternity benefits still applicable? yes no. If yes. months available, if any. 21. Do you have a provision under your plan that if the sickness or accident extends longer than a specified period that your aggregate payment benefits will be increased? yes no. If yes. period and $ amount increased. 22. If your plan has a life insurance policy, is it sold on a term basis? ves no other not applicable. 23. If your plan has a life insurance policy, does it provide for extended death benefits? (continued plan to an employee who leaves employment because of total or permanent disabil ity before reaching age 60-69.) yes no other not applicable____varies. 2b, If your plan provides for accidental death and dismemberment insurance, does it provide for payment for occupational surgery only, non-oceupationa1 only (not on the Job) and non-ooccupational, 2b hour coverage not limited to surgery, not applicable. (Check one please) 425 25* Does your plan provide life insurance coverage? yes no. 26. If ves. to question #25 what is the dollar maximum amount of live insurance benefits? & not applicable. 27. Does your plan provide for any death or dismemberment cover age? „ yes no. 28'# Does your plan provide for any total disability income bene fits for a ___________specified period, or ___________ unlimited period? (please check one only). If specified period, $____________If unlimited period $ , not applicable. 29. For any additional accident benefit is there a specified period of time set by which such treatment must be made? yes no. If yes. _______ months. 30. Does your plan(s) provide for any specific preventive health coverage? yes no. 31. If yes to question #30, does it include: _______________ vaccinations? ______________ well-baby care? _______________ annual physical examination? _______________ other__________________________ ______________not applicable. 32. Ambulance benefits in your plan are on a par disability or _______per trip basis? not applicable, (please check one) 33* Ambulance benefits amounts under your plan in dollar amounts are $______________ per trip, or $________ per disability, other, not applicable. 34-. Does your Health Plan(s) have a provision for personnel re tiring from your City (District) to remain in your health plan? yes no. 35« If yes to question # 3 ^ 4 - , does your plan provide for; _______Employees who retire at an immediate annuity (re tirement pay) retain coverage for themselves and 426 dependents with no reduction in benefits and at the same cost as active employees? ___________Same coverage t additional costs? _______ Coverage of dependents at the same cost as for an active employee may continue after the death of the enrolled employee or annuitant? Oth or: . . . __________________ _________ ___________________ __________not applicable 36. If you do allow your retired employees to participate in your plan, is there a specified period of time they must have been employed as a permanent (regular) employee of your district (city)? __ yes_______po. If yes. period of time (please specify), not applicable. 37* If you do allow your retired employees to participate in your plan, is there a requirement that their active position must have required a specified number of hours a week regularly? yes no. If yes. number of hours,______not applicable. 33. If in question 37. the employees' hours drop below the speci fied amount, is there provision for special appeal to the Board or Agency to remain in the plan for a specified period should the present "hour drop" below minimum requirement be only temporary? yes no. not applicable. 39. Does your plan provide for any deductible amount to be satis fied specifically for drugs and prescriptions before such amount will be counted to apply to an out-of-pocket expenses to satisfy a general blanket deductible amount in your plan? ves no. (i.e., $50.00 blanket deductible once a year to each member, however the first $30*00 expenses for drugs and prescriptions outside the hospital may not be applied on the deductible). 40. Does your plan provide for drugs and prescriptions at reduced member cost? yes no. 41. Does your plan provide for expenses for psychiatric counsel ing at medical centers? yes no elsewhere. 42. Does your plan provide benefits for congenital conditions? yes no. If yes, is the service provided only once? yes no. If yes. % limit. 427 43. In your health plan are there benefits provided for special nursing? ves no. 44. Does your plan provide for accident sickness disability payment on a (daily) (weekly) (monthly) basis when an employee cannot work due to an accident or sickness? not applicable. (Please check areas of coverage) (Please circle unit of time, i.e. weekly, etc.) 45* If you have an accident and sickness and/or disability policy in your plan, the maximum duration for which the benefit will be paid is ______ weeks and amount per week is $ not applicable. 46. If you have an accident and sickness and/or disability policy in your plan, do you have a waiting period before the employ ee starts collecting the benefits? _____ yes__po. If yes. the waiting period is days_____not applicable. 47. If your plan provides for an accident, sickness and/or disa bility benefits, is the amount the same for all em ployees in the group or graded depending on the em ployee’s earnings, not applicable. (Please check one) 48. Are home calls limited to specific distance limits? (i.e., city limits, etc.)? ves no. not applicable. If yes. limits, (miles, etc.) 49. Do you have special "dread" disease limits? yes no. not applicable. 50. If ves to question #49» your limits are: a) Cancer $_ b) Tuberculosis c) Polio $____ _ d) Other $_____ $_____ jiot applicable. 51. Are benefits outside of the service area limited to a maxi mum allowance under a special fee schedule (i.e., Industrial Accident Commission)? res no not applicable. 52. Is the following included in your plan coverage? Mental ill nesses or disorders (beyond diagnosis) yes no. If yes, full cost yes no, or/$______ per treatment not to <428 exceed $__________, or the first $____________ for each confinement, ot h e r not applicable. 53* Does life insurance extend to the dependents? yes no. If yes, what amount to spouse? $ to children $ . 5*+. Does your life insurance coverage have a conversion clause to permit continued coverage independent of your health plan should an employee leave your employ? yes no _ not applicable. VII - DENTAL QUESTIONS 1. Do you have a Dental Plan covered under your health plans benefits? yes no. NOTE: Please answer the following questions under this dental sec tion ONLY IF you have a Dental Plan. 2. If your plan provides Dental Care, is it prepaid? yes no. 3. If your plan provides dental care, are there provisions for: a. Quality control? yes no. b. Dependents coverage only? yes__ c. All employees coverage only? yes__ d. Both employees and dependents covered? yes no. e. Children only covered? yes no. f. Are facilities and equipment owned by the City (District) yes no. g. Is there exclusion for orthodomy? yes no. h. Is there a fee schedule (Relative Value Study Schedule) in operation? yes no. I. If yes to (h) does the dentist accept as full payment the fee schedule? yes no not applicable. j. Is there an income limit (salary not more than "X" dollars) to receive full benefits under the plan? yes k. Are more dollars budgeted for care the first year?____ y e s no. 1. Is the plan you have indemnity type (reimbursement to the employee) or service type plan? Reimbursement or service type (Please cheek one.) m. Does your plan have a waiting period? yes no. n. Are there pre-existing conditions in your dental plan? ye 3 no. 429 o. Is payment to the carrier or group practice based on enrollment. or _____patients seen? (Please check one) p. Is there a percentage ceiling established on administra tive costs in your plan? ves no. q. Do you use surcharges in your plan? yes no. r. Do employees have a choice of restricted, group practice personnel, or (unrestricted) any licensed dentist in your plan? yea no. s. Is your plan voluntary. compulsory: (please check one) t. Is your plan based on a per cause, or all causes? u. Are there provisions under your plan for retired person- nel? ves po. v. Do you have a system of claims analysis under your plan? w. Do you have provision for preventive care in your plan? yes_. no. x. Is your plan based on the co-insurance principle? yes no. y» Does your plan have a deductible? yes no. If yes. $ ______jamount of deductible. SECTION V: GROUP PRACTICE - RESTRICTED AND UNRESTRICTED COVERAGE INCLUDING PANEL TYPE - FOUNDATION TYPE - SEIP1 CONTAINED UNIT TYPE - HEALTH CARE PREVENTIVE TYPE NOTE: You may find it convenient to have your insurance agent com plete this Section V for the School District cr City, if the District or City has this type of Health Plan Coverage. I - HOSPITAL QUESTIONS 1. Are private rocxns, facilities and special diets available in the Groups without additional charge as necessary? yes no. 2. Is private nursing provided in the Group's hospitals without additional charge as needed? yes no none. 3* Does hospital care include all expenses of the operating room? yes no. 4. Does hospital care include all expenses for an a. Anesthetist and anesthetics? yes no none. b. Blood transfusions? ye s no___none. c. Ambulance service within miles? (Please fill in miles limit) yes po. 5. Does your plan provide for a specified number of days of hospital care without charge plus additional days at a per centage of private rates on dollar limit? yes no. 6. If yes to question 5 days' care In the hospital without charge; an additional days at $ of private rates or up to $ _____limit, (i.e., 120 days without charge, an additional 2h0 days at ■ § ■ (50$)» up to $300, private rates. not applicable. ?«. In your Group and/or Foundation Plan is all of the Doctor's care while hospitalized provided without charge including operations and consultation by and treatment by specialists? 8. If no on question 7, does your plan provide for a percentage of service without charge? yes no. If Yes, per cent. not applicable. 430 431 9. 10. 11. 12. 13. 14. 15. 16. Is there a limit provided for room and board under your plan? yes no. If yes on question 9. the limit is $ per day up to a limit of $ . Thereafter (if applicable) # of the room and board up to $ per day and # of other hospital services up to an over-all combined maximum of $______ .(i.e., $25 per day up to a limit of $500, there- after 75$ of the roam and board up to $30 per day and 80# of other hospital services up to an over-all combined maximum of $5000). In payment of other hospital services (ancillary services), other than room and board, does your plan provide for: a. Cash reimbursement to a fixed amount . If yes, Maximum amount $ ? b. Unlimited coverage on a service basis at no extra cost? ye s no. e» Cash reimbursement to a fixed amount plus additional reimbursement on a percentage basis? yes___no. If yes, $ plus # of the next $ (or i.e. 240 plus 75$ "of the next 500). d. other. For unrelated conditions your hospital benefits are renewable immediately, after complete recovery, upon return to work, or in days after hospital discharge. __j0ther. (Please check one) For related conditions your hospital benefits are renewable upon return to work. complete recovery, days after hospital discharge, or not renewable at all, ______Other. Does your plan provide for a period of time specified to be continuously in the hospital to be classified as a hospital patient?___yes___no. If yes. number of continuous hours, or if emergency less than______Jiours, but within hours of the time the emergency began. Or registered bed patient. (Please check one) If your plan covers hospital expenses, what is the top limit? £______ ♦ If there is a top limit* is this for a one year period, or for the lifetime of the policy or other ? not applicable. 432 17. Does your plan provide for hospital expenses related to outpatient surgery? yes no. 18. Does your plan provide for benefits if the employee is hospitalized at the time of the effective date of the instituting of your plan? yes no. If yes _______ limit, if any. 19. Does your plan provide for a co-insurance for: a. Other hospital expenses? yes no. ____%, if any. b. Surgical expenses ? yes no. if any. c. Doctor calls in the hospital? _____ yes _____ no. %> if any. 20. In your plan does your maternity benefit provide also for in-hospital well-baby care of the newborn ? yes no. 21. Does your plan provide for a limit per confinement for hospital room and board which is different than the top limit of the entire plan? _ yes no. 22. Does your plan provide for a different payment for the anesthetist depending on whether it is a major or minor operation ? _ yes no. 23. Professional Services for hospital expenses in your plan are paid at rates not to exceed % of the rates set (fill in) for in a relative value study (schedule) using a unit value of ________• ________ dot applicable in your policy. 2/+. Is removal of tonsils and adenoids restricted to one-day confinement in the hospital? yes no not applicable. If no, is stay restricted to another number of days? yes no. If yes, days. 25. Does your plan limit the number of doctor calls in the hospital per illness? _yes no _not applicable. If yes, _____ limit number of calls. 26. Does admission to a hospital under your plan require a deposit before entry? yes no not applicable. 27. Gan admission to a hospital under your plan be made by assignment (form) ? yes no _ _not applicable ^33 28. Does your plan provide for a deductible amount for; - ( iu the hospital ) - ( other than a possible blanket deductible for the entire flan) a. Other hospital expenses ? yes____no & deductible amount, if any. b. Surgical expenses? yes no &_________ deductible amount, if any. c. Doctors' calls in the hospital? yes no &_________ deductible amount, if any. 29. Does your plan provide for a deductible amount for hospital room and board, other than a possible blanket deductible for the entire plan? yes no _not applicable. If yes, i p__________ deductible. H - StJmiCAL wUDSTlOnS 1. Is there a maximum payment fee schedule for operations, for the subscriber ? yes _no. 2. Your surgical benefits are re nev/able under your plan for unrelated causes upon return to work, or after days. other. 3. Your surgical benefits are renewable under your Plan for related causes upon return to work, after days, of not specified. Other. U. Does your plan provide for a deductible amount for; (outside the hospjital) a. Other hospital expense? yes no. & deductible, if any. b„ Surgical expenses? yes no. deductible, if any. c. Doctor calls? yes no. i f_______deductible, if any. 5. When more than one operation is performed at the same time, does your plan provide for payment from a fee schedule or specified amount for both operations or only the most expensive fee. provides for payment above the dollar amount of one operation. 6. Your surgical costs are paid in full under your group practice plan regardless of fee? yes no. 7. Does your plan provide for surgical benefits outside of the hospital? yes no _not applicable. If yes, % co-insurance ~(if any)': v deductible amount, If any. 4-34- 8. Is there a limitation in your health plan that payment for full surgical benefits will only be made in cases involving hospitalization? yes no not applicable. 9. In cases where full payment is made for surgical purposes in hospital cases, does the type of hospital services used affect the right of full payment ? yes no not applicable. 10. Does your Health Plan provide for a co-insurance factor for: (outside the hospital) a. Other hospital expenses (ancillary) yes no. If yes, ______% co-insurancc factor. b. Surgical Expenses: yes no, if yes co- insurance factor. c. Doctor calls yes no, if yes co-insura nee factor. Ill - MEDICAL pUEDTIOnS 1. In your insurance plan are all doctor's office visits with out charge ? _yes __no. 2. If no on question 1, what percentage of the charge is paid by the employee? %. 4______ first number of dollars. ______ Not applicable. 3. Does your Group Plan provide for the doctor's care in your home? _yes no. 4. If yes on question 3, does coverage include necessary home calls by doctors, nurses under doctors1 orders, 24-hour emergency service? yes jao. 5. If no on question 4 indicate please any portion covered. _______________ _______ _______________ . Not applicable. 6. If yes on question 4j is there a charge for doctors' calls? yea no Not applicable. If yes - 4_______ per call* Not applicable. 7. If yes on question 4> is there a charge for nurses' calls? ye3 ____no. _Not applicable. 435 8. Does your plan provide for: a. Do charge for group member doctor yes _no ____ not applicable. b. Services of other than group member doctor, the member pays any cost above the fee — schedule allowance ____ yes no. 9. Does your plan provide for: a. Surcharges for group practice? yes no. 10. Medical care and treatment for home, office, and hospital visits in your policy are set at a maximum cost of d per calendar year. Hot applicable in your policy. U. Is there a dollar limit on outpatient diagnostic care? yes no not applicable. If yes, b___________ limit. 12. Does your plan provide for a consxiltation v/ith specialists if needed? yes no not applicable. If yes, is there an additional charge ? yes no __ _not applicable. 13. If there is an additional charge for consultation of a specialist, the charge is b________ • iiC>t applicable. lb. Does your health plan make special provisions for the doctors 1 long detention with a patient in your schedule of charges? ____ yos no not applicable. 15. If your plan restricts your employee's use to certain doctors, do you feel you have an adequate selection of specialists and general practitioners? yes no not applicable. 16. Is visiting nurses service provided under your plan's benefits? _ yes no not applicable. 17. Does your plan provide for co-insurance other than a possible blanket co-insurance for the entire plan for: a. Doctor's calls in the hospital yes no ________ _Jj co-insurance, if any. b. Doctor's calls at home yes no j,, co-insurance, if any. c. Patient's calls in the office __ yos _ no _____ co-insurance, if any. 436 18. Does your plan have u deductible for medical services In the hospital, other than a possible blanket deductible for the entire plan? yes no not applicable. If yes, 8 deductible. 19. Does your plan have a deductible for medical services outside the hospital, other than a possible blanket deductible for the entire plan? ye3 no not applicable. _if yes, 8 deductible. 20. Does your plan provide for a deductible amount for: (other than a possible blanket deductible for the entire plan) a. Doctor's ca.lls in the hospital? yes no. _______deductible amount, if any. b. Doctor's calls at home? yes no. 8_______ deductible amount, if any. c. Patient's call at the doctor's office yes __no 0 deductible amount, if any. 21. Does your plan provide benefits for a patient's visit to the doctor's office? yes ___ no _not applicable. 22. If your plan does provide benefits for a patient's visit to the doctor's office, the benefits start with the visit, in case of sickness, the _visit. ___ dot applicable. 23. Does your plan provide benefits for: a. Doctor's visit to the home or outsioe of the hospital yes _no not applicable. 2/-„ Does your plan provide coverage for consulting or specialist visits to a patient in the hospital? yes no _____ not applicable. 25. Does your medical plan pay of out of hospital expenses over the first v______, up to $_______ each year? (i.e., BO/' of out of hospital expenses over the first 850 up to .„1,000 a year) not applicable. IV - EXCLUSION 01; IhCLUDlOnS 1. Does your plan include the expenses of; a. All drugs and medicines in the hospital ? jyes _no 8 limit. If any. *K37 b. Physiotherapy and hydrotheraphy? yes no E limit, if any. c. X-ray and radium treatment? yes _ no _______limit, if any. d. Rental of an iron lung, bed, therapeutic, corrective equipment? yes no ^_______limit, if any. e. Prosthetic or orthopedic devices? yes __no E _____limit, if any. 2. Are the following excluded from coverage? a. Workman’s Compensation Insurance? yes _no. b. In government hospital or at government expense? _ _ yes no. c. Injury or sickness as an act of war? yes no. d. Services rendered by immediate family? yes no. e. Eye glasses, refractions, hearing aids, except as needed due to an accident? yes no. fo Other Does your plan exclude: cosmetic surgery not in connection with an accident or repair? yes____ no. are personal comforts in the hospital or home covered under your plans? (i.e., such as radio, TV, beauty, barber) _____ yes no not applicable. Does your plan limit examination for mental cona Ltionc to diagnosis? yes _no, If yos, not to exceed Hot applicable. Your employees are covered for X-ray and laboratory examina tions made for diagnostic purposes not requiring hospitaliza tion. yes no. A maximum of ^_______ a year will be paid for each illness _____per year only % __amount. Also for dependents. yes no. Diagnostic and laboratory coverage includes: (see question 6) a. Dental Examination or Treatment, (other than for repair). yes no. b. Eye examinations yes no. c. Routine physical check ups yes no. d. Cither: (Please list) h38 8. Does your Health Plan exclude: a. Hospitalization for diagnostic studies yes no. b. Rest or convalescent cures yes____no. c. Rehabilitation care yes no. d. Cosmetic surgery yes no. e. Drugs and medicines used outside the hospital yes no. S limit. f. Other yes no g. Surgery for normal maternity yes no. h. Dental surgery (except as a result of accident or illness). yes no. i. Doctor's visits to hospital for conditions resulting from pregnancy yes no. j. Treatment of congential deformities yes no. $ limit. k. Pre or post operative care yes no. 9. Does your coverage in the hospital Include meals regardless of cost or illness ? _ yes no. lour Health Plan include the following: a. Dietary service yes no, or C p limit. b. Laboratory and x-rays yes no, or limit. c. General Nursing Care yes no, or & limit. d. Special Duty Nursing yes ___no, or f y limit. e. Operating Room yes no, or & limit. f. Cystoscopic Room yes no. or & limit. g. Splints, casts, dressing, anesthetic supplies yes no, or §_______limit. h. Treatment of allergies yes no» or $______ limit. i. Therapeutic injections and hypodermics for sedation ___ yes no, or $_______limit. j. Sterilization yes no, or &_______limit. k. Intravenous injections and hypodermics for sedation ___ yes no, or & limit. 1. Oxygen yes no, or_$_______limit. m. Basal Metabolism yes no, or § limit. n. Blood plasma yes no, or &_______limit. o. Whole blood yes no, or _______limit. p. Radium treatment, x-ray, isotopes yes no, or $_______limit. q. Cobalt yes no, or_&_______limit. r. Oxygen equipment and rental yes no, or ______ limit. s. Circumcision yes no, More than days old. t. Travel recommended by physician yes no. u. Expenses for custodial care without specific medical treatment yes no, or & ____limit. l 09 v. Contagious diseases requiring isolation yes____no pot applicable, w. Diseases medically determined to be incurable Yes pot not applicable. x. _____________other. 10. Diagnotis x-ray and ancillary coverage is Included as follows: a. Dental x-rays yes no surcharge, $ , if any b. Diathermy yes no, surcharge. $ , if apy. c. Heat treatments yes po surcharge, $ ____, if any. d. Massage yes no surcharge. $_______ , if any. e. Whirlpool baths and related physical therapy yes _ no surcharge & if any. f. Medical or Surgical care in the hospital for conditions not usually treated in the hospital, such as a common cold or minor cuts yes no_ .surcharge, $____ __, if any. g. Treatment of Veneral Diseases yes no surcharge . $ ________, if any. h. Treatment of Sterility, Frigidity, and Impotency yes no surcharge. $ if any. i. Treatment for injuries received while engaged in commit ting or attempting to commit a feloqy or wrongful act involving moral turpitude? yes no surcharge, $ , if any. i» Treatment for orthopedics yes no surcharge $ ........ if any. k. Attempts at suicide or intentionally inflicted injury or illness yes___ po. 1. Alcoholi sm____ye s___no. m. Armed Service connected disabilities yes po. n. Conditions resulting from a major disaster or epidemic yes no. o. Engaging in a riot yes___ po. p. Hyperopia, myopia, or astigmatism yes no. V - general questions 1. Does (do) your plan(s) provide for high and low options applied to the same plan? yes___po. If your plan provides high and low option, please answer questions based on the high op tion choice. 440 2. Do your employees contribute a specified sura per period of time (week, month) to a Group Health Plan? yes no. 3. If yes to question 2, the amount • « _______ per (day, week, month, year — circle appropriate time period ) not applicable. / +. Are your employees in your Health Plan required to attend specified places of treatment and specified doctors? (Includes doctors undor agreements with own place of business) yes no. 5. Do your employees have the option of chosing their own doctors, clinics, and hospitals under a differential payment plan? (i.e. Health Group's pay and the employees have the choice of doctor, clinic or hospital but the Plan's pay is only up to the amount it costs the Health Plan to operate their clinic and pay their doctors, using their own foe schedule.) yes _ _ _ _ _ _ _ _ no. 6. Are benefits for the subscriber and family the same? yes no. 7. Does your coverage include care outside of a specified hospital or doctor available area? yes no. o. If yes, is there a mileage limit set which is considered care outside of the urea? j e s no. If yes, _____ number of miles. 9® Is there a dollar limit on the amount paid for care outside of the designated area ? yes no. 10. If yes on question 9, the maximum paid is ______ • _____ Hot applicable. 11. If a maximum sum is paid for cure outside of a designated -area such coverage includes. a. hecessary hospital care including all hospital services and doctor's care. yes no. b. Drugs and medicines while hospitalized yes no. c. Diagnostic X-rays and laboratory work yes no. d. Necessary ambulance service yes no. e. ___________ Other. 12. Does your plan provide for conversion privileges to an individual Health Plan after termination of employment where the plan is carried? _ _ yes no. ■441 13» If yes to question 12, are the benefits as complete as provided under the active employees' plan ? yes no not applicable. 14. If yes to question 1 2, is there a time limit provided by which a fonner employee must obtain the conversion plan? yes no. If yes, days limit. not applicable. 15. Does your plan provide for terminations of coverage by the plan management (administration)? yes no. 16. If yes to question 15, how much notice is required to the employee? days. _ Mot applicable. 17. If employment is terminated by the employer or employee and the employee is totally disabled or under treatment at the time of termination, how many days do the benefits still cover for treatment? days. Or , whichever occurs first. _Moi applicable. Id. Docs the member have to pay a premium into the jlan after termination of employment while still under treatment provided by the Group Plan? jes no not applicable. 19. Does your plan cover your spouse? yes no. 20. Does your plan cover unmarried children? yes __ no, 21. Does your plan cover dependents other than your spouse and children? yes no. 22. If yes to question 2 0, coverage includes unmarried children between the ages of ___ and . hot applicable. 23. Gan children over the eligible age of being classed as a dependent join the plan as a subscriber even though they are not employed by a firm having the plan as coverage? yes no. 24. Can a person become a member of your plan as an individual living in a community without a requirement of being employed by a company selecting your group plan? yes no. 25. Do dependents under your plan have a fee schedule for all medical, hospital, and medical service functions that is less comprehensive (less coverage) than that of the subscriber? ye a no. *442 26. Does your plan include the use of Specific: a. Doctors? yes no. b. Hospital? Yes po. supported, owned or contracted by the plan mangement? (Board or Administration) 27. Is your group plan a non-profit corporation? yes no. 28. Does your group plan provide a choice of fee-for-service or prepayment of fees? yes no. 29. Does your plan provide a choice of a contracting doctor (choose between those contracted) or a group working as a 30. Does your plan make any provision for care after retirement? .no. 31. Do you have varying deductible amounts and varying co- insurance amounts on different types of benefits within your plan? ves no. (i.e. 100$ - no deductible on hospital and 90$-10$ co-insurance on acddSnfcs; $50 deductible and 80$-20$ co-insurance on diagnostic, etc....) 32. Does your plan make provision for a higher degree of coverage and/or a lower cost depending on the salary of the employee? yes no. 33» Is your plan voluntary in that an employee may join at his choice or compulsory and must join the health plan if h® Is employed by your City or District. Voluntary. Compulsory. 3*4. Does your plan have a waiting period wherein an employee must wait a specified period of time after being employed before being eligible to join the health plan? yes no. 35. If ves. the waiting (probationary) period Is days. pot applicable. 36. Does your plan provide for employees on leave of absence without pay to be covered for a period of time with the health plan cost being shared with the employer? (if this is the procedure with active employees). or at the expense of the employee? or no expense to the employer or employee? not applicable, (please check) In question 36, if your answer indicated coverage, please indicate it for a specified period of time: days covered while on leave of absence. tot applicable. When an employee leaves your City (District) is there a period of time for extension of coverage to permit the employee to convert from group coverage to an individual coverage without medical examination? Without cost to the District (Company) or employee? yes no. If yes, ________Period of time (days)? Does your plan provide for continuity of coverage such as prevention, disability, retirement, etc.? yes no. Do you feel your benefits are adequate for your area and type of groups covered? yes no. Do you feel your , lan lias any built-in abuses, such as providing diagnostic x-ray only when the patient is hospitalized and therefore incurring a hospital cost to get diagnostic services? yes no. Does your health* plan coverage provide benefits for and thus encourage early diagnosis of disease and preventive medicine? yes no ^partially not applicable. Does your health plan provide service for and thus encourage treatment for rehabilitation of chronic disease and mental illness? yes no____ partially. Doe:: your j inn provide for coverage outsioe of tno Uni tod ; '.totes and Canada? you no. Is there an age limit in your ; lan beyond which you cannot j o i nV __ye s no. If you have a Croup Practice Plan superimposed by a major Medical Plan, can you join one without joining the o .her? yes _no not applicable,, Does your group practice plan provide for both the so-callod restricted (closed panel) and unrestricted (open panel) use? yes no. (restricted - use only group plan design-ted doctors) (unrestricted - use non-plan doctors but reimbursement only at the amount paid to a participating doctor) or members of the gi-oup but also have a solo practice. 444 4b. Does your group practice plan provide for the use of sur charges (service charges ) to control certain benefits? yes no. 49. Does your group practice plan provide for using the Provisions of Plan(s) in another area (where the other area has the same general plan, such as Kaiser)? yes _no not applicable. Does your plan use a relative value study (schedule) (fee). yes no. If yes, please identify schedule used. State medical association Veterans Administra tion _Other. 51. If you have a group practice plan, does your plan provide for the payment of a non-participating doctor at a rate of that of a participating doctor? _ yes no. !5h. Under you?' pan can a . rr-rsou he cove rod in a dual capacity as an omp]oyoe and a dopoudont? yes no« 53. Under your plan does Die Insurance carrier have the* right of subrogation? (in the event the participating employee or covered dependent is entitled to receive payment from any other person(s) as a result of legal action or claims with respect to expenses paid or reimbursed to him under this plan, the Plan Insurance Carrier shall bo entitled to rights of subrogation against such other peraon(s) . yes yio not applicable. f/, u boos your plan provide for ! onefits to a person on authorized leave of absence without pay, who uus become totally disable'.!, provided his benefits have been paid up? ves ___ no. 55. Are there any quality control provisions (by committees or other procedure) in your plau(s)? yes no. 56. Is a medical Examination required for an employee to join your plan when he is first eligible? yes no. 57. hoes your i lan(s) huv.. a separate deductible for psychiatric care? yes __no not applicable. 58. If yea, to the above question 57, the deductible for psychiatric care is 4 Not applicable, (if different than the regular deductible) < , h45 59. Are there provisions made iu your plan(s) to use Christian Science Practitioners, or so-called doctors who are not licensed physicians or surgeons in your state? yes no not applicable, 60. Does your plan provide for application of a satisfied deductible amount during the last three (3) months of a contract period to also satisfy the deductible requirement for the next contract period? yes no. ___________ other than 3 months (please indicate months). Not applicable. 61. Does your health i lan provide; ______ duplicate benefits with your Sluoe Disability Insurance operates after the State Disability Insurance program benefits have been exhausted? can be integrated with Stole Disability Insurance benefits? jprovides no coverage if State tdsnb:i.11 . ty benefits nro available? _not applicable. 62, Is there an excess insurance clause in your health plan whereby no payments are made to an employee if an employee receives payments under provisions of another health plan? yes no _not applicable, 63® Does your plan have provision for voll-t-aby-care in the doctor’s office? yes no not applicable. If yes, __ (number of ) calls within _ months from date of birth. 6-4. Do you know the number of employees that have a spouse working who also has subscribed to a health r .lan? yes _jio not applicable. 65. Do you feel that the female conhut of your plan is to a large extent covered under the husband's health plan when he is employed elsewhere? yes no not applicable. ye», % covered elsewhere. 66. Does your plan have one blanket deductible to satisfy before the plan benefits commence? yes no not applicable, $ _____deductible amount, if any. 67. If your plan hue converting coverage, is .it cancellable? yes no not ar.plicable HM-6 68. Does dependent coverage under your health plan make an exception or extend the age limit of dependency, unmarried students to an age greater than if he or she were not a student? yes no. If yes, extend coverage to _____ years old. (i.e. dependent coverage terminated at age 19* if a student unmarried, age 23). 69. Do you pay all charges by the hospital for maternity expenses under your group practice plan? yes no not applicable. 70* Does your plan huve a blanket co-insurance for the entire plan? yes no. If yes, ______ % co-insurance. 71. Are all school district persojuiel eligible for the health and welfare plan(s) ? __ yes no _a°t applicable. 72- If no in question u71, excluded are • following: a« Certificated. b. Classified c • Depende nt s d, Other ___ • (please specify; Please check those excluded _____ dot applicable. 73. If yon have a Foundation Plan (see definitions) please answer the following questions: ----- (A through Z )_____ Do dot have foundation type plan (if you check here plea.se do not answer question 73 - A - Z.) a. lour coefficient Medical is under the Ilela oivo e Value Study for hot applicable. b. Your coefficient Surgery is under the Relative • Value Study for Mot applicable. e. Your coefficient Radiology is under the Relative value Study for not applicable• d. lour coefficient Pathology is under the Relative Value Study for Hot applicable. e. Your coefficient under the Relative Value Study for is i ' l ot applicable. f. The amount of surgical coverage shall have a minimum limit of liability equal to _______ _i.e. (100) times the appropriate coefficient. kU-7 g. Coverage for the assistant surgeon is as stipulated in the Relative Value Study (California Medical Association). yes no not applicable. h. Ho deductible shall be applied for a consultation given for a system not requiring complete examination, at office home or at the hospital. yes no not applicable i. ho deductible is applied to detention with patient. ___ yes no not applicable. j. ilo deductible is applied to a diagnostic workup by a physician limiting his practice to internal medicine. yes no not applicable k. Circumcision is an exception to the coverage of a dependent. yes no not applicable. 1. Anesthesia is charged per the Relative Value Study when billed by the anesthesiologist. yes no ____ not applicable. m. Anesthesia is % of the surgical schedule when billed by the hospital. yes no not applicable n. Does your Foundation Coverage have general inininum standards of quality stipulated? yt - n . - ; ___.no____ not applicable. o» Does your Foundation Flan have a claims review by the Foundation Offices? yes no not applicable. p. Are your Foundation Plan Offices authorized to pay claims subject to periodic Insurance or other agency audit? yes no not applicable. q. Are professional payments limited to State licensed physicians, surgeons (H.D., D.O.), dentists, and doctors of chiropody? yes no not applicable. r. Is there provision for annual review by the Foundation of all contracting doctors and insurance plans? .yes no not applicable. s. Must contracting doctors and companies receive approval of the Foundation Plan before becoming eligible to be part of the Plan? yes no not applicable. t. Does your Foundation Plan have optional features ? ___ yes no not applicable. u. Do optional features include; 1.a. f t ______for well baby care for years? ________ applicable. 2.a. Coverage for dependent children to start at birth rather than later in life? yos no ________ not applicable 3®a. Coverage for post operative visits made after ____ weeks following the operation? _yes no not applicable i m l,.a. Supplemental accident coverage ? yes no not applicable. 5.a. Major Medical superimposed on a basic program ________ (with, without) corridor? yes no not applicable. 6.a. Premium alloted for professional coverage shall be shown separately from the premium alloted for hospitalisation and other inciaential coverage? yes no not applicable. v. If the patient refuses to assign benefits, does the doctor have the right to charge his usual fee ? yes __ no not applicable, w. If a patient or a patient's family has multiple coverage, can the participating doctor charge his usual fee, not to exceed the payment benefits of the multiple eover-ge? yes no not applicable, x. Does your plan have a different relative Unit Value for certificated employees than for classified employees (or in the case of private company one set of era; loyees nr. compared with another set)? yes no not applicable. If yes, certificated Unit Values & __ classified Unit Values G__ , or In the case of a private company one set &_____ , compared set y________ _ y. Under surgical benefits does your Foundation Plan have a different maximum for Certificated than for Classified employees? (in the case of a private company one set compared with another set) yes no _not applicable. z. Is the above also true for medical care under your Foundation plan as to Relative Unit Value and Maximum? yes __ no not applicable. VI - MfFCInL GUViidiGno UUnUTIOdS 1. Does your Group Plan provide for eye examinations in the office? yes no. 2. Does your Group Plan provide for consultation ana treatment by specialists for doctor's care in the office? _ _ _ _ _ yes no. 3. If allergy treatment is provided and there is a charge, the charge is _____per unit not to exceed _ _ _ ___ iJote Applicable. If allergy treatment is provided antigens will, be provided free of charge yes _no; or at Group Plan rates. you no not applicable. 449 5. If allergy treatment is provided therapeutic injections will be made free of charge ____ or at £_______per injection. i-Jot applicable. 6 . Does your plan provide for maternity care? yos _no. 7. If yes to question 6, maternity care includes: a. Hospital care - yes, no surcharge, p________ , t. Physician's and surgeon’s care in and out of hospital - yes no _surcharge, _______ . c. Drugs and medicines while hospitalized - yes no, surcharge # , if any. d. Drugs and medicines while not h0s7J.tai.ized - yos _ no ^surcharge ^ • e. X-rays and laboratory work during pregnancy and post natal recovery - yes no ^surcharge ^____ , if any. f. Caesarean Sections - yes no surcharge 1 if any, g. Pull care of mother bed'ore, during and aftei’ confinem eI • yes no surcharge d . h. Full care of child during the mother’s confinement - __ yes _no surcharge p______ 8. If maternity care is provided, the charges for such care is v_______ if the employee has months’ or more membership in the plan. hot applicable. 9. If in question 8 the employee lias less than jnonths1 membership in the elan, the charge would be b . „___ riot applicable 10. If pregnancy is interrupted or tormina ten, the maximum charge would not exceed the total full maternity care charge. ___ yes no. 11. Is there aiy extra dollar allowance made in your lan for accidental injury? _yes no. 12. In case of an emergency illness does your plan cover expense outside of a specified distance radius? yes _no. 13. In case of emergency illness outside of a specified area does your plan provide for reimbursement if: a. such medical expenses ure a direct result of the illness? yes no. b. member must be a registered bed patient yes _n0* '+50 c. Hospital or doctor's office is more than miles away from one of your own plan's hospital or uoctors’ office yes no not applicable. d. reimbursement is made only for those items and services and in amount limited to fee schedule covered under your plan yes no not applicable e. will any allowance outside of the plan area be based on a medical association fee schedule other than your plan's fee schedule? yes no not applicable. 14. i.re polio benefits provided under your plan? yos no. 15. If yes to question 14, the maximum dollar coverage is v____ for a period of years. dot applicable. 16. Is there an allowance for medical and surgical travel benefits? ____yes _ no. If yes, 1 limit. 17. Is there an allowance for emergency accident expense? _ _ _ yes _ _ ____no. If yes, _____ limit. lo. Does your plan cover for a surcharge or at no extra expense eye examination and refractions? yes no ( ; . ; . _____ _ ___ If surcharge.) 19* Does your plan provide Cor any preventative health coverage? yes no. 20. If yes to question 19, coos it include: _____ Vac cinations? Well Baby Care? Annual Physical bxnmluntion? Other (please specify}” 2 1. ambulance benefits of your : lan arc on a _per disability or _____ per trip basis? 2 2. ambulance benefits amounts under your plan in dollar amounts ure K _ _ P er trip or v______per disability.____________ ____ Other. 23» Does your Health Plan have a provision for personnel retiring from your City (District) to remain in your Health Plan? yes no. k51 24* If yes to question 23, does your plan provide for - - _____ employees v/ho retire at an immediate annuity (retirement pay) retaining coverage for themselves and dependents with no reduction in benefits and at the same cost as active employees? _____ same coverage, additional cost? _____ coverage of dependents at the same cost for an active employee may continue after the death of the enrolled employee or annuitant? _____ others ________ not app,lie,able® 25® If you do allow your retired employees to participate in your plan, is there a specified period of time they must have been actually employed as a permanent (regular) employee of your District (City)? yes no. If yes, period of time. _ not applicable. 26. If you do allow your retired employees to participate in your plan, is there a requirement that their active position must have required a specified number of hours a week regularly? yes no. If yeb, ______ number of hours. _ not applicable. 27. If the active employee's hours drop below the specified amount, is there provision for special appeal to a board or agency to remain in the plan for a specified period should the present "hour drop" below minimum requirements, bo only temporary? yers no ____ not applicable. 2b. Does your plan provide for ary deductible amount to be satisfied specifically for drugs and prescriptions before such amount will be counted to apply to out-of-pocket expenses to satisfy a general blanket deductible amount in your plan? yes no (i.e., p50 blanket deductible once a year to oacl) member: however, the first v30 expenses for drugs and prescriptions outside the hospital may not be applied on the deductible). 29. Does your plan have a limit on expenses for pulmonary Tuberculosis? yes no, or no coverage at all? _____ yes no. 30. Does your plan provide for drugs and prescriptions at reduced member cost? yes no. 1*52 31. Does your plan provide for expenses for psychiatric counsel ing at medical centers? yes no _not applicable. 32. Does your plan provide for eye glasses furnished at reduced cost? yes no. 33. Does your plan provide benefits for cogenttal conditions? yes no. If yes, is the service provided only once? yes no. If yes. v_______limit, if at, « 3k. In your health plan are there b<: nefits provided for special nursing? yes no. 35. If your plan has a life insurance policy, is it sold on a term basis? yes no other. not applicable. 3t. If your plan has a life insurance policy, doss it provide for extended death benefits? (Continued plan to an eiriployee who leaves employment because of total or \.oruanent disability before reaching age 60-65) yes 110 other ___„ not applicable. 37. If your plan provides for uccidexxtal death and dismemberment insurance, does it provide for payment for: _____ Occupational surgery only. _____ l'ion-occupational only (not on the job) Loth occupational (on the job) and non-occuputiunul _/ot applicable. (check one ric- sc.) 36. Does your plan provide for an accident, _ sickness, disability payment on a (daily) (weekly) (monthly) basis when an employee cannot work due to an accident, or sicKness? dot applicable. (Please check areas of coverage.) (Please circle unit of rime (weekly, etc.)) 39. If you have an accident and sickness and/or disability policy in your plan the maximum duration for which the benefit will be paid is weeks and amount per week is 3 . ______ not applicable. /+0. If you have an accident and sickness and/or disability policy in your plan, do you have a waiting period before the employee starts collecting the benefits? yes no. If yes, the waiting period is __ days. hot applicable. ^5 3 / , ! . If your plan provides for an accident, sickness and/or Us ability benefits, is the amount the same for all employees in the group, or graded depending on the employees earnings? lot applicable. (Please check one*) 1,2, In plans providing that the patient pay hospital and doctor's charges for maternity after a specified number of days, do their day restrictions apply in case of severe complications due to pregnancy? yes no not applicable. 13. Are home calls limited to specific distance limits? (i.e. city limits, etc.) yes _no _not applicable. If yes, _____________ limits, (miles, etc.) 44. Do you have special 'dread* disease payment limits? yes no not applicable. 45. r f yes to question 44, your limits a re s Cancer v_________ ■>• Tuberculosis ________ _ c. Polio ________ d. Other g ____ ________ ___ _ _____ hot applicable. 46. Does your plan have a deductible for maternity services other than a blanket deductible for the entire plan? yes no not applicable. If yes, g_____ deductible. A7. Arc b nefits outside of the service area limited to a maximum allowance under a special fee schedule (Industrial Accident Commissi on) ? yes no _not applicable. 48* Is the following included in your plan coverage? - - - h i . . Mental illnesses or disorders (beyond diagnosis) __ yos no. * - If yes, full cost. j ob _no, or per treat ment not to exceed _______per illness with a maximum payment limit of v_ , or the first g_______ for each confinement. Other: _ _ ______ Hot applicable. 49• Is there a limit in your accidental death and dismemberment coverage on the loss for one acciuent? yes no _____ not applicablc« 454 50. If yes to question 49, the limit (dollars payable) is $ Not applicable. 51. If your health plan provides life insurance benefits, what is the dollar maximum amount of life insurance benefits? $_________. Not applicable. 52. Does life Insurance extend to the dependents? yes no. If yes, what amount to spouse? $ . _____ Not applicable. 53o Does your life Insurance coverage have a conversion clause to permit continued coverage independent of your health plan should an employee leave your employ? yes no not applicable. VII - DENTAL QUESTIONS 1. Do you have a Dental Plan covered under your health plan benefits? yes no. NOTE: Please answer the following questions under this dental sec tion ONU IF you have a Dental Plan. 2. If your plan provides Dental Care, is it prepaid? yea no. 3« If your plan provides Dental Care, are there provisions for: a. Quality control? yes no. b. Dependents coverage only? yes no. c. All employees coverage only? yes no. d. Both the employees and dependents covered? yes no. e. Children only covered? yes no. f. Are facilities and equipment owned by the City (Dis trict)? yes no. g. Is there exclusion for orthodomy? yes no. h. Is there a fee schedule (Relative Value Study Schedule) in operation? yes no. i* If yps to (h) does the dentist accept as full payment the fee schedule? yes no pot applicable. 3. Is there an income limit (salary not more than "X" dollars) to receive full benefits under the plan? yes no. k. Are more dollars budgeted for care the first year? no. <*55 1. Is the plan you have indemnity type (reimbursement to the employee) or service type plan? reimbursement service type. (Please check one.) m. Does your plan have a waiting period? yes no. n. Are there pre-existing conditions in your dental plan? yes no. o. Is payment to the carrier or group practice based on enrollment. or patients seen? (Please check one. ) p. Is there a percentage ceiling established on adminis trative costs in your plan? yes no. q. Do you use surcharges in your plan? yes no. r. Do employees have a choice of restricted, group practice personnel, or (unrestricted) any licensed dentist in your plan? yes po. s. Is your plan voluntary? compulsory? (Please check one.) t. Is your plan based on a per Cause or all causes? u« Are there provisions under your plan for retired person nel? yes no. v. Do you have a system of claims analysis under your plan? yes no. w. Do you have provision for preventive care in your plan? yes____no. x. Is your plan based on the co-insurance principle? yes ____no. y. Does your plan have a deductible? yes no. If yes. $__________ amount of deductible. APPENDIX B NSMITTAL LETT:® FOR QUESTIONNAIRE TO SCHOOL DISTRICTS, CITIES AND COUNTIES WITH INSTRUCTION SHEETS 1960 Commemorates Our 50th Anniversary Association of School B usiness Officials ofucal OFFICIAL o r TH E UN ITED ST AT ES AND CANADA /.V T • T ' X ’ An International Profetiional Educational Organization, Incorporated Not For Profit L * Atlkiiat E5Ecurogon a iA R U li T W . ROSTER m m 5^CUTOg(JECRnTARY niARLl-y W. roSTHR l O l 1 5 ® l e i 1(J1° ClIUHCM STHr.LT e mb le m liVANSTON. ILLINOIS ■ "!feh'f*,’ Atll!!Tril8tratorr ',F A L S?^OIO 1 T e l e p h o n e N u m b e r U N I V E R S I T Y 4 - 7 3 7 6 In cooperation with the Personnel Commission of the Los Angeles City Schools u ancT^Ke' National Association of Public School Business Officials, I am coordinating a study of Government and School District practices in existing Health and Welfare Insurance plans. While we understand that you have a form of health plan in your agency, our infor mation does not indicate whether or not it is employee organization sponsored or sponsored by the agency* If it is agency sponsored, we would very much appreciate your cooperation and assistance in answering the attached questionnaires. Ihe questionnaire comprises five (5) sections— namely: Section I ------------- Instituting a Plan Section II - ~ - - - • • - » - - - - - Administration of a Plan Section III ------------- Basic Service and/or Major Medical Plans Section IV - Comprehensive (First Dollar) Plans Section V ------------- Group Practice (restricted-unrestricted) (open-closed panel, foundation type plans) It Is suggested that the School District or City-County personnel would be probably best qualified to answer Sections I and II. You may find it convenient to have your Insurance Agent complete Section III or IV or V. Please note that your organization will probably have only one type of plan and therefore would complete only Section III or Section IV or Section V— not all three. When this study is summarized your organization will receive a copy of the results which you no doubt will desire in analyzing your existing Health Plan and looking toward future needs. Your response would be very much appreciated and a self-addressed stamped envelope is provided for your return material. Sincerely, P. G, Campen Assistant Superintendent - Business Centra11a School District Approved? Robert Fisher, Personnel Director Personnel Commission Los Angeles City Schools Chairman, ASBO Personae! Management Committee I960 Commemorates Our 50th Anniversary A ss oc i a t i on of s c h o o l B usiness O fficials OFFICIAL KHBLCM •RKO. U.S. PAT.OFT * O F F I C I A L An International Professional Educational Organization, incorporated Not For Profit O f TH E UN IT ED 5T A T E5 AND CANADA OF HUH OF Till: fcXFCUTJVJ; SliC.IU: I'AilV UIAIU.LS \V. I-OSTHR loio Cnvtu.n SiHFi.r EVANS I ON, IM.INOls T e l e p h o n e N u m q e r U N I V E R S I T Y 4 - 7 3 7 0 August 5, 1960 INFORMATION CITIES AND COUNTIES Questionnaire on Health and Welfare Plans I. NOTE: A. Your City (County) was selected from a list of the fifty (50) largest cities (counties) in the United States. No available reference indi cated whether or not your City (County) has a City (County) sponsored and/or City (County) financially supported Health Plan. B. If your City (County) has a Health Plan(s) which is sponsored and/or financially supported by the City (County), please fill out the attached questionnaire. C. If however, your City (County) hast 1) No Health Plan(s) or 2) The existing Health Plan(s) is available to City (County) employees only through arrangements with and endorsement by city (county) employee organizations (i.e. Local Union, City Employees Association or Club, etc.), then please return the questionnaire unanswered with such a notation. II. Name of City (County) Reportings III. Name of Person Making Reports Name Title IV. Remarks I960 Commemorates Our 50th Anniversary EMBLEM *REO. U .B. PAT. OFF. A s s o c i a t i o n of Sc h o o l B usiness officials O F T H E U N I T E D S T A T E S AND C A N A D A An International Professional Educational Organization, Incorporated N ot For Profit o m u - o r TH U e x e c u t i v e s e c r e t a r y CHARLES VC. FOSTER 1010 C h i n c h Sriiri r E V A N S T O N , ILLINOIS August 5, 1960 OFFICIAL T f . l e p h o n e N u m b e r u n i v e r s i t y 4 - 7 3 7 6 INFORMATION SCHOOL DISTRICTS Questionnaire on Health and Welfare Plans I. NOTE: A. Your School District was selected from a survey made by the NEA and AASA in May, 1956. The above reference did not indicate whether or not the School District Health Plan was School Dis trict tponsored and/or School District financially supported. B. If your School District has a Health Plan(s) which is School District sponsored and/or financially supported by the School District, please fill out the attached questionnaire. C. If however, your School District has: 1) No Health Plan or 2) The existing Health Plan(s) is available to School District employees only through arrangements with and endorsement by School District employee organizations {i.e. Teachers’ Club, Classified Club, Local Union, etc.), then please return the questionnaire unanswered with such a notation. II. Name of School District Reporting: III. Name of Person Making Report: Name Title IV, Remarks: APPENDIX C TRANSMITTAL LETTER FOR SECTIONS I AND II ONLY OP QUESTIONNAIRE TO SELECTED SCHOOL DISTRICTS OF OVER 50,000 AVERAGE DAILY ATTENDANCE 1960 Commemorates Our oOth _ Inniversarv Association of School Blsiaess O fficials Dear Administrator : Xn cooperation v/ith the Personnel Commission of the Los Angeles City Schools and the National. Association of Public School Business Officials, I am coordinating a study of Government and. School District practices in existing Health and Welfare Insurance plans - While we understand that you have a form of health plan in your agency, our infor mation does not indicate whether or not it is employee organisation sponsored or sponsored by the agency. If it is agency sponsored, we would very much appreciate your cooperation and assistance in answering the attached questionnaires. The questionnaire comprises two (2) sections, namely: Section I — — — — — — — — —Instituting a Health Flan Section II — — _ _ — — Administration of a Health Plan Since the two sections are basically constructed for check marks on a yes or no answer basis, the questionnaire can be completed in a very few minutes. When this study Is summarised, your organisation will receive a copy of the results, which you no doubt will, desire in analysing your existing Health Plan and looking toward future needs. Your response would be very much appreciated by September 15i arid a self-addressed stamped envelope is provided for your return material. SincepedTy , . F^. G. Cam pen Assistant Superintendont — Business Centralia School District Approved: Robert Fisher, Personnel Director Pe rsonnel Commission Los Angeles City Schools Chairman, A33C Personnel Management Committee

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Asset Metadata

Creator Campen, Palmer George (author)

Core Title The Selection, Administration And Content Of Health Insurance Plans For Public School District Personnel

Contributor Digitized by ProQuest (provenance)

Degree Doctor of Education

Degree Program Education

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag education, administration,OAI-PMH Harvest

Language English

Advisor Nelson, D. Lloyd (committee chair), Perry, Raymond C. (committee member), Stoops, Emery (committee member)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c18-243135

Unique identifier UC11358069

Identifier 6103813.pdf (filename),usctheses-c18-243135 (legacy record id)

Legacy Identifier 6103813.pdf

Dmrecord 243135

Document Type Dissertation

Rights Campen, Palmer George

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus, Los Angeles, California 90089, USA