Health insurers offering new, different ways to rein in plan costs - Minneapolis / St. Paul Business Journal:

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According to the Washington, D.C.-based Henry J. Kaiser Family in 2008 premiumsfor employer-based healtjh insurance rose by 5 percent and firmsw with fewer than 24 employeexs saw an average increase of 6.8 percent. In responsd to a market simultaneously calling for lower costse with a high levelof Eagan-based introduced SureBlue, a health care plan that build a three-year rate guarantee into the product whil transitioning employees to a consumer-directed model featuring healtgh savings accounts (HSAs) or health reimbursement accounts (HRAs). The firstt plan of its kind offered by a Minnesotaq healthcare plan, SureBlue is designed for businesse s with 51 to 249 employees.
Clients sign on for three yearsx and receive an initiak rate set through the traditionapunderwriting process. In the second and thirds years, rate increases will be 6 percent per This allows businesses to plan aheads financially while protecting against any unexpected jumps in healthjcare costs. “In challenging economic we believe the cost guarantee SureBlu e offers is exactly what Minnesota employers are lookinvg for to help them manage their saidRichard Neuner, senior vice presidenrt and chief marketing officer at Blue Crosz and Blue Shield of Minnesota. The announced in September, took effect in January 2009 and is availablde to fullyinsured employers.
“We’re in the educationa l phase of theproduct rollout,” said Angie sales executive at Blue Cross and Blue Shield of Minnesota. Nationally, and offer similar but Blue Cross and Blue Shield of Minnesota is the first local healtg insurer to offera three-year plan. Daryp Richard, vice president of public relationsdfor , a division of Minnetonka-based , said his organizatiomn has no plans to launch a similar product soon.
“We have severaol similar programs inthe small-businesss area that encourage HRA and HSA Our Edge program is for companies with two to 99 employees and ties the plan design to designates doctors and hospitals for lower co-payments and co-insurance,” he said. “We’vw taken other ways to address the same root to cap healthcare costs.” UnitedHealthcare started offering the Edge plan in Septemberf 2007. Another Minnesota insurer also is findinfg different ways of trying to rein in the cost of healtjhcare insurance.
“Medica offers a comprehensive and diverswe product portfolio that allowe employers to combine plan designs and networkl solutions to achievetheir cost-containmenft goals,” said Greg Bury, spokesman for Minnetonka-basec Medica, in an e-mailed statement. “We believe this flexibility allowsw our customers to purchase health coverage that fits their needs without lockinh theminto long-term commitments with significant penalties for making changes not prescribed by the healtjh plan.
” While employers may be eager to shift more of the cost of healt h care to their employees through HRA and HSA plans, theres are potential drawbacks for the Jack Militello, a professor of managemenyt and director of the healtb care MBA program at the , said efforts that direct consumerxs to high-deductible plans and cap costsd can save employers a great deal of but sometimes at the expensse of employee health. “Health care is an expensivde proposition for a lotof us. Younger people tend to like the idea of fixef cost and thinka tax-free HSA is a good deal becausr you can manage your own costs. But I’n 63 and I don’ want an HSA; I want full coverage.
” Militellko said employer cost controls are most likelh toaffect lower-income employees who may feel they don’t have the moneyt to spend on a procedure or prescribed This, he said, can lead to self-diagnosis and which can cost an employer in the form of ill workerw and lost productivity. “Small business has reallyh been beaten by this and health care costss are only going togo up,” Militellol said. “The work force is aginyg and catastrophic eventsraise premiums. It’s in an employer’ss best interest for employeed to be healthy and insurerzs have programs to keep upon people’a health.
” Militello believes longer-term programs that control costsx and promote consumer-directed health care plans (CDHP), like SureBlue, will be even more prevalen t in years to come. Bisho p agreed. “Predictability is central for employersand