Gotcha!

Politics here? Nope. Just wanted your attention.

Assume you’re an employer considering health plans offered by two different insurers.

The ‘new kid’ on the block proposes a narrow network HMO with ‘unique’ shared-risk contracts. The details of that are proprietary but I’d guess it involves some form of capitated premium; i.e., manage your members health, and providers share in the surplus. If claims are high, both the insurer and providers lose. (New? What about Kaiser Permanente?)

The second insurer proposes a broad – everyone’s in it – network, but ranks the providers by a variety of metrics, including quality and cost of care. The assumption is, members will seek out those rankings on line and gravitate toward the more efficient providers.

Both approaches are said to stabilize premiums.

For comparable plan design, the premium for the capitated HMO is about 12% lower; in this case with 52 employees, that’s about $85K. Hardly chump change!

Larger employers might be able to offer both plan designs and let each employee choose. Not so here. The employer has to make the call; will half your employees need to switch doctors or will everyone pay more?

Mail in ballots are welcome. (Couldn’t resist.)