Insurance Agent Forum

[Nwit]

Hi....

I am studying for a Florida license. My wife changed jobs 7 months ago and was able to join their group health plan 2 months ago.

The premium for the two of us is $1,100 monthly. It is a PPO through Blue Cross Blue Shield. We have been on an HMO for years and were very satisfied.

I had a triple bi-pass 5 years ago and OOP was around $1,000.

I asked her about an HMO option and she said there was no HMO option. I was surprised!

So this morning while studying my manual and I come across this:

"The Health Maintenance Act of 1973, which provided some federal funding for these organizations, spurred the HMO movement forward. On of its provisions requires employers with 25 or more employees to offer enrollment in an HMO if they provide health care benefits for their workers."

So, my questions are:

1. Is this still true?

2. Is there some loophole that would allow the employer to NOT offer an HMO option?

3. What can/should she do about it?

I am believe that the premium would be lower. Is that a correct assumption?

Thanks,

[moonlightandmargaritas]

Originally Posted by Nwit

I am believe that the premium would be lower. Is that a correct assumption?

No, it isn't. The HMO option would be more expensive than the PPO option.

[ABC]

In 1995 they changed that act so employers did not have to offer the HMO for groups over 25.

[sman]

Originally Posted by moonlightandmargaritas

No, it isn't. The HMO option would be more expensive than the PPO option.

Not here in Georgia. EVERY group quote I've ever run and enrolled the HMO was ALWAYS (and still is) cheaper.

As for the OP's original question, here in Georgia you are required to offer both options with the group (I onl deal in small group so I'm not sure about group sizes of 25 or more). That simply means the employee has a choice to enroll in the HMO or PPO plan. I can't speak for Florida.

[NewHealthStrategies]

Originally Posted by sman

Not here in Georgia. EVERY group quote I've ever run and enrolled the HMO was ALWAYS (and still is) cheaper.

As for the OP's original question, here in Georgia you are required to offer both options with the group (I onl deal in small group so I'm not sure about group sizes of 25 or more). That simply means the employee has a choice to enroll in the HMO or PPO plan. I can't speak for Florida.

Actually, the law is that you cannot offer ONLY an HMO without making a POS plan available as well.

IN ADDITION, you must offer what is known as a Consumer Choice option which (without going into all the ridiculous details) gives the buyer (the employee) the chance to pay as much as 17.5% MORE in premium so that they can nominate a doctor that isn't in the network and the carrier must treat that doc as though they "are" in network for that member (assuming the doc agrees to the fee schedule).

Aggghhh.... what a nightmare.

Think about this for a small group... You are the employer and decide to offer the lowest price product (HMO) for your 4 employees who all enroll.

3 months later, you go to hire another employee and the employee wants a POS plan.... YOU MUST OFFER HIM THE PLAN...... WTF?

[NewHealthStrategies]

Originally Posted by moonlightandmargaritas

No, it isn't. The HMO option would be more expensive than the PPO option.

You would think so, but the depth of discounts that many managed care companies were able to secure during the height of the HMO craze are still around and still deeper than the PPO discounts.... so in many, many places HMO's are cheaper than PPO's... but not for long.

You'll see hospitals and PHO's begin to even the playing field as long term contracts begin to come up for renewal... co-pays will become a thing of the past in the next 4 years and "consumer-driven" plans are the next fad.

[sman]

Originally Posted by NewHealthStrategies

Actually, the law is that you cannot offer ONLY an HMO without making a POS plan available as well.

IN ADDITION, you must offer what is known as a Consumer Choice option which (without going into all the ridiculous details) gives the buyer (the employee) the chance to pay as much as 17.5% MORE in premium so that they can nominate a doctor that isn't in the network and the carrier must treat that doc as though they "are" in network for that member (assuming the doc agrees to the fee schedule).

Aggghhh.... what a nightmare.

Think about this for a small group... You are the employer and decide to offer the lowest price product (HMO) for your 4 employees who all enroll.

3 months later, you go to hire another employee and the employee wants a POS plan.... YOU MUST OFFER HIM THE PLAN...... WTF?

You are correct. After re-reading my post, I see I wasn't very clear in that if you are offering an HMO you must include the POS (or a PPO as well if I'm not mistaken - i.e. - it can be either, but must at least be a POS). And every time, the POS and PPO are more expensive than the HMO. So when the employee decides they would prefer the POS or PPO (usually because of the network), the employer has to spend more money for that employee. I guess that's ok if it's a large corporation. But when it's a 4 or 5 man group, it means a lot the owner.

[retread]

It only seems logical that HMO plans would be cheaper, as I understand they are capitated, whereas the POS/PPO plans are negotiated discounts on a network basis. Correct me if I'm wrong.

[NewHealthStrategies]

Originally Posted by retread

It only seems logical that HMO plans would be cheaper, as I understand they are capitated, whereas the POS/PPO plans are negotiated discounts on a network basis. Correct me if I'm wrong.

In the "old" days (when HMO's first began) it was much clearer to distinguish between an HMO and a PPO.

Now, you'd be hard pressed to find someone on this Forum who could accuratley tell you the difference.

Capitation is still around for the big-players (BX, etc.) but for the most part it's gone.

The reason PPO SHOULD be lower in price is because of the utilization factor. But as stated, there is such a blur between the 2 it's that 6-one-way-half-dozen-another routine.

Good luck out there.

[arnguy]

Here in PA, in the small group market that I work (2 to 9) the HMO is cheaper than the PPO. When Independence BX first introduced the PPO in Southeastern PA it was the other way around, the PPO having been cheaper. It has not been that way for a number of years.