Wall Street Journal Examines Basics, Costs of Custom Health Plans
Dow Jones/Wall Street Journal yesterday examined custom health plans, which allow members to "design their health benefits the same way they customize their car insurance policies." Under such a plan, subscribers choose varying levels of deductibles, copayments and prescription benefits, which affect the amount they have to pay in premiums. The plans allow members to "exert more control" over their benefits and encourage them to "craft their health plans with more of a regard for costs." Employers hope that the plans will help reduce company health coverage costs. But the amount of savings from customized plans, which are being implemented by insurers including Humana Inc., Highmark and HealthNet Inc., "remains to be seen," Dow Jones/Journal reports. For example, Highmark has seen no change in cost trends since implementing its BlueChoice program two years ago. Dow Jones/Journal notes that the plans will require employers to "engage in some serious education initiatives" to ensure employees understand how to craft their individual plans. Another problem could result from "adverse selection," which occurs when the insurer's healthiest -- and therefore most profitable -- subscribers reduce or drop their coverage, leaving behind members with costlier health problems (Bennett, Dow Jones/Wall Street Journal, 7/9).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.