The message below was emailed to U-M faculty and staff on Sept. 22, 2006. For more information, please refer to M-CARE Questions and Answers for U-M Faculty and Staff, and the U-M Health System M-CARE Update Web site at www.med.umich.edu/mcareupdate/.

To:          Faculty & Staff Community
From:       Laurita Thomas
Subject :  Impact of the M-CARE sale on your employee benefits

As we approach this year’s Open Enrollment period for U-M benefits (Oct. 9-20), I would like to offer some important information about what to expect in the coming year.

We have received a number of messages from the U-M community about the proposed sale of M-CARE to Blue Cross Blue Shield of Michigan.  In response to the most common questions, let me reassure you that:

• No changes to M-CARE plans are taking place in 2006 or 2007.  You may confidently choose an M-CARE plan during Open Enrollment, if that is the plan that best meets your needs.
• For 2008, the M-CARE HMO will be replaced by a new HMO designed by the University to be as similar as possible in cost and coverage.
• The sale of M-CARE will not increase the cost of our health care plans.

You are invited to attend one of several information sessions we have scheduled to help answer your questions about benefits and Open Enrollment.  More details are below, as well as on the Web at www.umich.edu/~benefits/new/mcareinfo.htm

Comparable plans, level of benefits and quality of services
As I noted above, no M-CARE health coverage changes are taking place now or in 2007. Open Enrollment will take place as planned next month (Oct. 9-20) and the M-CARE plans, features, and premium contributions shown in the Open Enrollment books are accurate and will not change. You will be able to choose from the same range of M-CARE plans that have long been available, as well as from other health plans offered by the University, for coverage in 2007 at the published rates during Open Enrollment.  You are encouraged to choose the plan that best meets the health needs of you and your family.  You may use the Medical Plan Navigator at <www2.umjobs.org/MedicalPlan> to determine which plan is best for you.

The Board of Regents approved the sale of M-CARE today and the process of approval by regulatory authorities continues. We will be working with Blue Cross Blue Shield in the coming year to design replacement offerings for the M-CARE plans we now offer to the U-M community. The new plans would become part of our spectrum of plan choices during next year’s Open Enrollment period and would become effective in 2008.

It is important to understand that the University retains control over the design of our health plans, including what services they cover and how much they cost for our employees.  We intend to replace the M-CARE HMO with a Blue Care Network HMO product that we will design to reproduce, as closely as possible, the features of the M-CARE HMO. This new HMO will include a very similar network of doctors and clinics, will cover a very similar set of services, and will be offered at a very similar cost to what employees pay for the M-CARE HMO. A choice of other plan types, like PPO plans, will continue to be offered, as will GradCare.

Our prescription drug plan will not be affected by the sale of M-CARE.  We will continue to offer prescription drug coverage through the U-M Prescription Drug Plan now administered by SXC. Our drug plan has been very successful at providing needed medications to all covered U-M employees, retirees and dependents while achieving slower growth in costs than has been seen nationally.

U-M medical plan costs
The sale of M-CARE will not have a direct impact on the cost of our U-M health plans.  We are committed to offering a choice of comprehensive health plans at a reasonable cost to our employees.  However, the overall market forces that continue to put pressure on the cost of health care and health insurance are not going to stop.  As a community, we must address the increasing cost of health insurance through programs designed to deliver the most effective and efficient care possible, and a well-designed set of health care offerings that encourage employees to choose the lowest-cost plans and health care services that best meet their needs.

We cannot predict the precise cost of plans for 2008 at this time for any insurance carrier, including M-CARE.  Of all of our comprehensive medical insurance plans, HMOs tend to be the lowest cost.  The University retains control over the design of our health plans, and when the M-CARE HMO is eliminated in 2008, we will replace it with a Blue Care Network HMO that will have a very similar cost structure and plan design as the M-CARE HMO.  In addition, you will be able to choose from other health plans like the Care Choices and Health Alliance Plan HMOs that we currently offer.

Open Enrollment
No M-CARE health plan changes are taking effect in 2007. Open Enrollment books will be delivered to campus this month with complete information on plans and premiums for 2007. Information about this year’s Open Enrollment is also found on the Benefits Office Web site at: <http://www.umich.edu/~benefits/events/oe/index.htm>. An “M-CARE Update” link is also found there for the latest information on M-CARE, including a current set of Frequently Asked Questions.

Information sessions
You are invited to attend an information session in order to get answers to any questions you may have about your health care benefits and the possible impact the sale of M-CARE may have on those benefits.  Sessions will be held on the Ann Arbor, Dearborn and Flint campuses and in the U-M Health System.

We are committed to offering a choice of high-quality, comprehensive health plans to meet the needs of our large and diverse community. Our benefits are a vital component of our ability to attract and retain the best faculty and staff, and that will continue to be a priority in the design of our benefit programs.

In the spirit of a healthy community,

Laurita Thomas
Associate Vice President for Human Resources