Blue Cross Blue Shield of Massachusetts recently introduced a new health insurance plan for businesses that has steep fees for things like going to an “out of location” facility or doctor or opting for high cost tests, in an effort to steer members towards lower cost care. Hundreds of small businesses have purchased the plan and it is growing in popularity. But hospitals are waning of reprisals over the practice.
The plan was instituted last month as an initiative to reign in the rising cost of health care. Other insurers in the state are reporting of similar gains in business for plans that offer low premiums for those seeking low-end care. Some insurers have gone so far as to ban policyholders to visit popular hospitals and doctors.
According to Paul Pietro, chairman of Mid-State Insurance Agency Inc., the plans are helping both employers and employees understand exactly what is driving up health care premiums. “Simple things, like MRI’s and CAT scans,” he says, “if you’re just able to stay out of those hospital settings, that can save money.”
The state of Massachusetts health insurers commonly have offered an open network of health care facilities, thus giving members a wide array of options, but has left a troublesome tab behind. Most people have chosen high price hospitals over cheaper community ones and have completely ignored any type of clinic care for high cost testing. This has been seen as a major contributor to the 7.5% increase in health care costs within the state over the last year. Insurers are hoping these new “limiting” plans will help level the playing field by cutting costs immediately.
Although, executives at Partners HealthCare warn that the policies have dangerous pitfalls that may result in consumer fallout, especially as people become seriously ill and find that they will not be able to get the best care for their illness.
“They will be mad at Blue Cross and their employer,” says Doctor Thomas Lee, head of Partners’ physician group. He foresees painful moments in the future when policyholders begin to clash with insurers.
While Blue Cross has not released information on the exact number of people covered by these plans, it is estimated that nearly 30% of small businesses and individuals that renewed policies in January enrolled in the plan.