Highmark Launches Cheaper – But Highly Restrictive – Health Plan
June 11--Highmark Inc. is introducing one of its most-restrictive health plans in a bid to hold down costs by steering members in Western Pennsylvania to a select network of hospitals and doctors, but the move is causing some concern.
The Connect Blue health plan, which large employer groups will be able to buy starting July 1, excludes hospitals that serve Butler, Beaver and Westmoreland, and could cause Highmark members in those counties to travel if they want to pay less for care.
"Certainly, we want to be there for our community and we don't want people to travel unnecessarily," said Anne Krebs, chief financial officer at Butler Health, which owns Butler Memorial Hospital.
Butler Health wasn't included in the plan's Preferred tier, one of three Connect Blue benefit levels in which subscribers pay the lowest co-pays, deductibles and co-insurance if they use hospitals and doctors in that tier.
Excela Health, which owns hospitals in Westmoreland County, and Heritage Valley Health System, which owns a hospital in Beaver County, also aren't in the preferred tier.
"We believe we are a very good value in the market," Krebs said. "We weren't offered an option."
Tony Benevento, Highmark's senior vice president of Pennsylvania markets, said employers are demanding health insurance for their workers that keeps costs down. The primary way to hold down premium prices, he said, is to negotiate deep discounts with some providers and then push patients to use those facilities with lower out-of-pocket costs.
"We're putting a benefit and plan design out there to steer (members) to the right providers and to the right site of service," Benevento said.
Highmark spokesman Aaron Billger said the three hospital systems could be added to the Preferred tier after the insurer negotiates reimbursement contracts with them.
"We are beginning contracting in a couple weeks, and this will be part of that discussion," Billger said.
Connect Blue is being offered to large employers in Allegheny, Beaver, Butler, Erie, Mercer, Washington and Westmoreland counties. Highmark has asked for state approval to sell the health plan to individuals and small businesses in those counties starting Jan. 1.
The Preferred tier includes the seven Allegheny Health Network hospitals, which are owned by Highmark Health, St. Clair Hospital in Mt. Lebanon, Sharon Regional Health System, Washington Hospital, Children's Hospital of Pittsburgh, Western Psychiatric Institute and Clinic, and the Cancer Institute in Erie.
In addition to the Preferred tier, Connect Blue has Enhanced and Standard tiers. The Enhanced tier has all other non-UPMC hospitals in the region. Standard includes UPMC's hospitals that are outside Pittsburgh, such as those in Bedford, Altoona and Erie.
Benevento said cost-sharing for members using Preferred tier providers is significantly lower than the Enhanced and Standard tiers. While employers can customize the exact amounts, co-pays could be two to four times higher in the Enhanced tier and eight or nine times higher in Standard.
Co-pays are the fee patients pay for certain services, such as a doctor visit or prescription.
Deductibles are the amount of money a patient pays up front before insurance kicks in. Co-insurance is a percentage of the claim that the member must cover after the deductible is met.
Highmark has not signed up any employers for Connect Blue yet, but Benevento said he expects many by the end of the year.
"Right now, we're the leaders in this marketplace," he said. "We're just trying to meet what our customers are asking for."
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or [email protected].
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