Massachusetts' Group Insurance Commission had offered limited network plans as an option for several years. But last year, the state's purchaser of health benefits for 78,000 state employees, plus their family members, decided to sweeten the deal.
"We needed to have an incentive for people to join or at least take a look at limited network plans," says Dolores Mitchell, the commission's executive director.
So they required all 78,000 employees to actively select a plan from the 11 offered—six of which limited physicians and hospitals. If employees signed up for one of those networks, the first three months of premiums would be waived. By the start of the current benefit year, which began July 2011, 30,000 state employees were insured by limited networks, up from 19,000 previously.Mitchell estimates that the limited network shift saved the state $20 million to $30 million for the plan year. Employees saved $600 to $1,400 annually in lower premiums, along with the three-month waivers.
Philosophically, Mitchell says that she has been loathe to pass along too many of today's rising health costs onto employees. In 2010, the commission instituted an upfront deductible for the first time, $250 per individual and $750 for a family. But she's not a big fan of high-deductible plans. "They're fine for people who are reasonably well-paid, reasonably young and reasonably healthy," she says, adding that lower-paid employees could take a big hit financially if they become ill.
One advantage with limited networks is that the services covered are the same as the broader network plans, she says. But employees are asked to decide upfront if they're willing to pay more for provider choice. Once the benefit year kicked in last July, Mitchell says: "We got some cries of anguish that, 'I didn't know that Dr. Beloved wasn't going to be in this plan or, I didn't know that Hospital Beloved wasn't going to be in this plan.' "
Last fall, the commission sent a letter offering a two-week grace period. An enrollee could change from the limited to a broader network (with the same insurance provider), if they agreed to repay the waived premiums. "Then we crossed our fingers and hoped," Mitchell says.
Fewer than 140 enrollees made the switch.
Charlotte Huff is a freelance writer based in Fort Worth, Texas. To comment, email firstname.lastname@example.org.
Workforce Management, March 2012, p. 40 -- Subscribe Now!