Sixty Employers Join To Offer Discount Health Coverage to Uninsured Workers
Sixty large employers have joined together in a "novel attempt" to offer low-cost health insurance options to employees who generally are not eligible for company-sponsored health benefits, the New York Times reports. Through the effort, the employers -- which include General Electric, IBM, McDonald's and Sears, Roebuck -- will use their collective bargaining power to negotiate low-cost health plans for about three million uninsured part-time and temporary workers, contractors, consultants and early retirees -- or roughly 7% of the approximately 45 million people in the United States who are uninsured. The employers will not subsidize the coverage, the Times reports.
The various plans available to the three million workers -- ranging from a drug discount card costing $5 a month to a high-deductible plan costing $300 a month -- are not intended to replace employer-funded health benefits for full-time workers, according to the Times. UnitedHealth Group will offer the four lowest-cost options in all 50 states. UnitedHealth and Humana will offer the more expensive plans in states where they have been approved by regulators. Cigna will offer the program's most expensive option in Arizona. The companies have asked insurance companies to urge physicians and hospitals to meet quality and efficiency standards. Worker participants in the program will be able to compare providers on the program's Web site.
The companies said they support the program because they believe they "ultimately pay for the uninsured as hospitals pass on their costs for nonpaying patients," the Times reports. The program "may also be a way for employers to stave off proposed state mandates for coverage of uninsured workers," the Times reports.
"We have a model that doesn't require enabling legislation," Tom Beauregard, a health strategy expert at Hewitt Associates, said. In addition, the companies "expressed hope" that national policy makers might consider a similar approach to lower insurance costs, the Times reports.
The HR Policy Association, a group of large companies that helped with the coverage idea, plans to introduce the program on Monday in Washington, D.C. The program's sponsors will begin promotion of the plans in April and will initiate services in September (Freudenheim, New York Times, 1/27).