Highmark, UPMC offer restrictive plans in Erie [Erie Times-News, Pa.]

April 05--The hospital you choose might soon depend on the health insurance your employer selects.

Highmark Blue Cross Blue Shield announced Wednesday it will offer a new health plan that requires subscribers to pay higher deductibles and co-payments if they visit UPMC Hamot or many of its physicians.

Highmark's Choice Blue plan will be available July 1. It will arrive about six months after UPMC Health Plan began offering its Inside Advantage plan, which increases the out-of-pocket costs for members who go to any Erie or Crawford county acute-care hospital other than Hamot.

"This is the next shot across the bow in the battle between Highmark and UPMC," said David Dausey, chairman of Mercyhurst University's public health department.

Highmark and UPMC have been fighting since March 2011, when UPMC stopped negotiating a new provider's contract with the health insurer. Highmark had agreed to the $475 million takeover of West Penn Allegheny, UPMC's primary competitor in Pittsburgh.

Highmark officials downplayed the battle with UPMC as the reason they created Choice Blue.

"Our customers are always asking us what we can do to lower health-care costs," said Lisa Koshan, Highmark's director of client management in the Erie region. "This plan can provide lower costs through lower premiums."

Choice Blue premiums will be 3 to 18 percent less than for similar Highmark plans, Koshan said. Inside Advantage premiums are 15 to 22 percent less than comparable UPMC plans, said Ki Kim, UPMC Health Plan's sales manager for the Erie office.

This type of restrictive plan is popular with smaller businesses that struggle to provide health insurance to their employees, Kim said.

"The attraction is with businesses that employ fewer than 50 people," Kim said. "We have already signed 20 to 25 groups and expect more later this year when more renewals come up."

Choice Blue and Inside Advantage divide hospitals into three tiers instead of splitting them between in network and out of network.

The top tier has preferred providers with the lowest annual deductibles and co-payments. Those out-of-pocket costs then double if you go to a second-tier hospital, and double again if you go out of network.

For example, Choice Blue might have a $500 individual annual deductible if you go to Saint Vincent Health Center or Millcreek Community Hospital, a $1,000 deductible if you go to UPMC Hamot, and a $2,000 deductible if you go to a hospital not in the provider's network.

Office co-payments to second-tier providers increase by 50 percent in the Choice Blue plan, but Inside Advantage keeps them at $20 for a primary-care physician and $40 for a specialist as long as they are in UPMC Health Plan's physician network.

The Regional Cancer Center is in the top tier of both plans.

Once the annual deductible is met, you still will have to pay out of pocket if you don't visit a top-tier hospital in either plan. The plans cover 80 percent of expenses at second-tier hospitals and 60 percent when you go out of network.

Emergency room services are covered 100 percent in both plans.

"Since most of the people in this region get their insurance through Highmark, (the Choice Blue) plan could mean a tough adjustment if they want to continue going to Hamot," Dausey said.

Hamot and Saint Vincent officials both declined to comment for this report.

Choice Blue and Inside Advantage are being offered only to northwestern Pennsylvania employers and other group providers, but Highmark said Choice Blue could eventually be expanded throughout its coverage area.

"We chose Erie first because it's a more complicated provider system down" in Pittsburgh, Highmark spokeswoman Kristin Ash said.

DAVID BRUCE can be reached at 870-1736 or by e-mail.

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