Coping With Rising Prices Poses Complex Challenges

I confess, I am price observant and price resistant. An upward price change will often send me in new directions.

But it is complicated. With this year’s gasoline prices soaring, with the nation’s largest long distance telephone company, AT&T;, trying to raise its basic rates, and with health care premiums and benefits fluctuating, it is often up to consumers to evaluate their own situations before deciding what is best.

I was thinking about this last week while driving the kids’ car for them through the Midwest and its surging gas prices. It was a 1989 Honda Civic, without much power but getting 40 miles a gallon.

On the car radio as I passed through Minnesota, Gov. Jesse Ventura was saying he never thought he would see gas prices higher in Minneapolis than Los Angeles.

Fortunately, I didn’t have to worry too much about paying up to $1.98 a gallon for gas, given the Honda’s fuel economy. And I discovered that traveling the country these days can still be downright cheap.

The 2,700 miles from Hanover, N.H. to Salt Lake City cost me, gas, hotel and food included, less than $400 over four days. The hotels, Comfort or Quality Inns, ranged from $46 to $63, and the most expensive complete steak dinner at the swank Ouzo’s restaurant in Wahpeton, N.D., was only $12.95.

Price questions raised lately in two other industries may not be so easy for consumers to resolve.

AT&T;, stung by bad publicity, recently put on hold a substantial increase in some of the basic rates it would charge the 30 million of its 65 million customers who aren’t on its calling plans. These, for the most part, are people who don’t make many long distance calls.

And Blue Cross of California sent a letter to 731,000 of its customers who are in individual PPOs (preferred provider organizations) advising them of benefits changes. The move was designed, spokesman John Cygul said, to avoid a premium increase, such as numerous other health plans have been announcing.

It was clear that some benefits would be less. So out-of-pocket costs to customers could, unless they changed their treatment strategies, increase, particularly for those who go outside the Blue Cross doctors’ network. Cygul insisted consumers could find a way, but many of the Blue Cross patrons would, I think, find that very challenging. Blue Shield, by contrast, has chosen some premium increases.

In today’s complex price structures, you have to be smart to master the price you ultimately pay.

At AT&T;, spokesman Mark Siegel said the suspension earlier this month of the price changes on basic service will not last long. AT&T; had tried to increase daytime calls Monday through Friday from 26 cents a minute to 29, nighttime from 16 cents a minute to 29, and all Saturday from 11.5 cents a minute to 29.

But, at the same time, it would have reduced basic Sunday calls from 11.5 cents a minute to 7. Already, 20% of all basic calls are made on Sundays, and undoubtedly under the new pricing plan that proportion would have increased.

Also, the $3 monthly minimum usage charge on basic long distance was removed June 1, and has stayed removed.

AT&T; is charging a $5.95 monthly fee on many of its calling plans, including those charging only 7 cents a minute. So you have to be making quite a few calls to save, compared with basic rates.

There are many plans among the 700 other long distance companies that charge less than AT&T;, but the key thing is to examine your own situation before you go to the trouble of finding them.

I talked this over with Edward Ticktin, e-mail edward@utilities4less.com, a Thousand Oaks telephone agent who places customers on special deals with lowest-cost carriers and takes a small commission on the charges.

Ticktin said a consumer would have to average $25 to $50 in monthly long distance before it paid to go to the low cost carriers.

He offers several. For example, AmeriCom has no monthly fee, and charges 4.99 cents a minute for calls within California, 7.5 cents per minute for calls elsewhere in the nation, 24 hours every day, and offers the 13th month free.

Consumers can call AmeriCom at 877-834-0655, use Ticktin’s name and ask for Program BAV3. Other deals exist with other agents.

Careful evaluations are in order too when it comes to Blue Cross.

The letter to the individual PPO customers is complicated, as insurance communications so often are. “We have replaced your $20 copay for in-network office visits with a coinsurance payment of 30% of the negotiated fees,” says one paragraph. “This means, for example, if an office visit costs $70, rather than paying the $20 copay on the date of services, you would be billed for your share of costs. In this case, it would be 30% of the $70 charge, or just $21.”

I defy anyone to easily understand this.

The letter contains other important provisions, such as a new $250 annual deductible for brand name, as opposed to generic, prescriptions, and an end to any out-of-pocket maximum stop-costs for care outside the Blue Cross PPO network of 48,000 doctors.

Consumer advocate Harvey Rosenfield--a Blue Cross customer--said this means his options are being restricted and costs raised.

But Cygul, pointing to benefit enhancements such as out-of-state discounts, more preventive care and state-mandated cancer screenings, reiterated that Blue Cross’ purpose is to “avoid premium increases by making benefit modifications.”

Would it be better to pay more in premiums and keep the benefits? Perhaps move from Blue Cross to Blue Shield? This is something each medical consumer must decide.

Just as my daughter and son-in-law decided to sacrifice power and drive a car that mitigates high gas prices, so we must all look with a hard eye for the long distance phone service, or the medical insurance, or a host of other things that best serve our particular needs.

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Ken Reich can be contacted with your accounts of true consumer adventure at (213) 237-7060 or by e-mail at ken.reich@latimes.com.