Blue Cross Failed to Tell Its Staff of New Plan

Blue Cross of California, in a snafu that Chairman Leonard D. Schaeffer called “a major communications problem,” rolled out a significant new health insurance program this week without notifying its sales staff.

The mishap led to mass confusion and some bitterness among the hundreds of Californians who--upon learning of the program in The Times and elsewhere--flooded Blue Cross’ toll-free lines with inquiries.

“My feeling is it’s a sham,” said Steve Stern of Los Angeles, whose wife had cancer four years ago and who thought the program might answer their insurance woes.

Under the new initiative for individuals and families announced Wednesday, Blue Cross promises to extend coverage to all applicants regardless of medical history, with rates for even the riskiest applicants averaging only $214 a month--a statewide average.

The program, effective March 1, carries some tight restrictions such as deductibles, caps on benefits and six-month waiting periods for existing medical conditions. Still, for many Californians, especially in high-cost Los Angeles, it sounded extremely attractive. It represents the first time that a private California insurer had guaranteed coverage for all applicants.

Problems started as soon as the company’s phone lines opened Thursday. When callers asked about the rates they had seen in the newspaper, Blue Cross salespeople--who Schaeffer said were working from price lists that did not reflect the new program--told them that those prices did not exist.

“Those aren’t Blue Cross numbers,” a saleswoman said Friday when a reporter, without identifying himself, called to ask about the program. “It’s just something that the media got hold of and ran by themselves,” she added.

Another source of confusion was the average premium figures. Although Schaeffer insisted that the prices “are accurate and were given in good faith,” they don’t tell the whole story.

In Los Angeles County, the average premium for policyholders with the most severe medical problems will be $268 a month, as compared to $214 for the state as a whole, Blue Cross said Friday. And premiums range substantially higher, depending upon an applicant’s age.

When the program is fully implemented, current Blue Cross members with the worst health risks will see their premiums drop 20% to 25%, said D. Mark Weinberg, Blue Cross executive vice president.

Weinberg said the company announced the program while it was in the process of explaining it to its staff and thousands of independent insurance agents. Salespeople will be acquainted with the program by Monday and will send out brochures and applications next month.