High-deductible health plans have been an extremely trendy idea of late, with the assumption being that consumers would use services more cautiously if they had to pay first-dollar coverage on their own. However, some employers have been muddying the waters a bit by buying high-deductible plans, then helping employees with the deductibles through their own payouts or added insurance coverage. The combined package may be as much as 40 percent cheaper than traditional coverage, while offering comparable benefits, according to one estimate for a 40-person business based in California.
Employers like this approach, which brokers have fostered in an effort to win their business. But lately, some health plans have raised a stink over this model, which they say can push costs up substantially by taking away employees' incentive to overuse services. In fact, some California plans are so upset that they're asking employers to sign statements saying that they won't combine high-deductible plans with some types of self-insurance. Employers who won't sign could lose coverage. "Wrap-around schemes really run the risk of destroying lower-premium health products by driving up the price or making them go away completely," says Chris Ohman, president and CEO of the California Association of Health Plans.
To date, Blue Shield, Health Net, Kaiser Permanente and Anthem Blue Cross have sent letters to insurance brokers threatening them with termination of their contract and loss of commissions if they sell so-called "wrap-around" packages. I doubt they're the last.
To learn more about this trend:
- read this Sacramento Business Journal piece
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