Health maintenance organization (HMO) plans are making a comeback as an affordable option for healthcare coverage, even as payers continue to battle negative consumer perceptions that the plans limit choices, according to The New York Times.
Despite past criticisms that HMOs limit coverage and potentially lead to lower quality care, more insurers are offering beefed-up HMO plans on state exchanges. More than half of the plans offered on Affordable Care Act exchanges are "narrow network" plans that are attractive to consumers looking for lower out-of-pocket costs.
Insurers are looking to rebrand HMOs, even advocating for new names like "high-performing network" in an effort to escape the negative connotations associated with HMOs, according to the Times. Last year, Blue Cross Blue Shield of Illinois partnered with Advocate Health Care to create BlueCare direct, the cheapest plan on the state exchange that attracted 60,000 consumers in 2016. Blue Cross lobbied to change the plan's name to HIO (health improvement organization), but state regulators denied the proposal.
"We're not trying to trick anybody," Steve Hamman, a senior executive with Health Care Service Corporation, which operates Blue Cross Plans, told the Times. "We're just conscious of the historic bad name that HMO has had. We firmly believe that it is very different today."
Employers are both interested in the plans and wary of the limitations they could place on employees, the Times notes. New HMO plans no longer require beneficiaries to syphon all referrals through a primary care provider, and allow physicians to easily refer patients to various providers within the system by accessing in-house medical records. Although patients are limited to a defined network of providers, proponents say that's the only viable means of offering a plan with a lower price point.
During the open enrollment period for 2016, two-thirds of insurance companies operating on the exchanges either reduced their offerings or eliminated preferred provider organization plans altogether. Although the number of narrow-network plans varies from state to state, a recent proposal from the National Association of Insurance Commissioners would require insurers to advise patients of costs associated with choosing out-of-network providers and update provider directories once a month.
To learn more:
- read the New York Times article
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