Small companies that are concerned about spiraling healthcare costs, but don't have the ability to create effective consumer-directed healthcare plans (CDHPs), may have a gift from above. And when I say above, I don't mean the place of harps and angels. I'm talking about the state north of Iowa.
Blue Cross and Blue Shield of Minnesota will offer SureBlue plans starting in January that will allow small employers (51 to 249 employees) to lock in health insurance rates with the agreement that they gradually move employees to CDHPs.
Analysts predict healthcare costs will rise in the 8%-9% range in 2009, which is not the double-digit territory of recent years but would still continue to outpace inflation. That trend is expected to continue in the near term.
By agreeing to a three-year deal, employers will be able to restrict rate increases to 6% during the second and third years of the agreement. (BCBS of MN will follow the normal underwriting process for the first year.) The move is part of a growing trend as health insurers look for ways to both set themselves apart from the competition and guarantee business over a three-year period.
Knowing the rates three years into the future will allow for predictable budgeting, says BCBS of MN.
"We found customers are looking for predictable healthcare costs," says Shawn Patterson, vice president of marketing at BCBS of MN. "We found that some were saying that the unpredictable part of their budgeting process was healthcare and they would like to have a solution that they could absolutely put into their financial planning."
Patterson says BCBS of MN opened the plans to small companies because they have the greatest need. Small employers don't have human resources staffs that are large enough to create similar programs that guarantee cost containment and create a greater consumer focus.
SureBlue is a three-pronged approach: consumer-directed plans (high-deductible options with health savings accounts or health reimbursement accounts); whole person support via a health risk assessment and wellness programs; and consumer education so they can make informed—and cost-effective—health decisions.
The idea is that if the individual has to pay a larger chunk of money out of pocket he or she will be more careful about what healthcare to get and where to receive it. This dovetails with BCBS of MN's offerings that allow members to visit a retail clinic without paying a copay. Patterson says the insurer implemented that policy because it costs less to treat a patient at a retail clinic rather than a primary care physician's office or emergency room/urgent care clinic.
In the SureBlue program, employers have a choice of four plans that range from a traditional health plan to high-deductible plans, including one with a health reimbursement account that is backed by a 50% employer contribution.
The idea behind any CDHP is to transfer more healthcare costs onto the individual consumer. SureBlue plans allow employers to gradually increase deductibles and financial responsibilities to the individual over three years. SureBlue will also educate consumers and teach them how to mitigate risk by taking better care of themselves, says Patterson.
The SureBlue idea is a fascinating one. Being locked in to rates for two years while moving employees into CDHPs may seem like a slam dunk for both insurers and employers, but there is a potential downside. Employers won't be able to test the insurance market and potentially get lower rate increases over those three years—though as stated earlier, financial analysts don't expect healthcare rates to shrink to that level. The consumerism train is blazing down the tracks as health plans and employers attempt to engage members to take more control of their healthcare dollar. SureBlue is an option for small employers, but whether the plans save money and educate consumers is the million-dollar question that the rest of the industry will watch with interest.