Health Insurance Firms Offering More Limited Plans To Reduce Costs
Several large health insurance companies are testing new plans that limit participants' network of physicians and hospitals but offer lower premiums, the New York Times reports.
The plans -- which are being tested in several large cities such as Chicago, New York and San Diego -- are an attempt to address concerns about the rising costs of coverage. The insurers said that companies might be able to reduce premiums by as much as 15% under the more limited plans.
Interest for Small Businesses
Insurers and health care officials believe that these plans will appeal to small businesses that already provide employees with some level of coverage, as well as businesses of all sizes that are seeking to cut costs.
Observers say the trade-off is that more individuals will be required to pay higher prices for the freedom to choose their own physicians or stay with their doctors if they are out of network.
Revival of HMOs?
The new plans appear to mirror the concept of HMOs, which were established in the early 1990s but fell out of favor with consumers because of restrictions on specialists and hospitals.
The idea of having a choice of health care providers featured prominently during the debate over health reform, with President Obama and other government officials repeatedly assuring U.S. residents that they would be able to retain their health care options.
New Plans as Part of Insurance Exchanges
Many insurers say they expect the new plans to be popular with individuals and employers who intend to join the new health insurance exchanges, which are scheduled to be implemented in 2014 under the health reform law.
The reform law stipulates that plans will be subject to several standards that guarantee patients will have an adequate selection of physicians and hospitals.
White House Office of Health Reform Director Nancy-Ann DeParle said the reform overhaul will protect U.S. residents against health plans with overly restrictive requirements.
Insurers Attempt To Assure Consumers About Choice
Insurers are attempting to avoid a backlash similar to the resistance to HMOs in the 1990s by emphasizing that price will not be the sole factor in selecting physicians for the new plans.
For example, insurance officials said they also will monitor how quickly a doctor's patients recover from surgery. However, it is uncertain how much emphasis insurers will put on quality (Abelson, New York Times, 7/17).