Group Insurance Introduces Lower Cost Health Plans to Help Control Costs

In the face of continued escalation of health care costs and challenges for the state, the Group Insurance Commission (GIC) voted to offer two new lower cost plans for state employees. These plans help address differences in provider costs and encourage employees to save money by enrolling in a narrower network plan. "We're going back to the future," said GIC Executive Director, Dolores L. Mitchell. "Employees have the opportunity to cut their premium costs by enrolling in smaller network plans."

Prior to the vote to offer the new plans, Robert Sorrenti, MD, Regional Vice President of UniCare, the GIC's Indemnity Plan carrier, provided a presentation on the GIC's claims trends. In addition to an increase in the number of high cost claims of $50 thousand or more, rising costs per claim, particularly for inpatient and outpatient hospital services, have contributed to soaring expenditures. "We estimate that for most of the GIC's plans, $0.90 of every $1.00 we spend on health care goes to provider costs - hospitals, physicians, radiology and prescription drugs," said Dolores Mitchell. "As the Attorney General's Preliminary Report on health care cost drivers revealed, provider payments are tied to market leverage and geographic isolation. These new plans give employees an incentive to use quality hospitals with lower costs."

The two new limited network plans will be offered through Harvard Pilgrim Health Care and Tufts Health Plan. The GIC already offered limited network, lower cost plans with Fallon Community Health Plan and UniCare. The Harvard Pilgrim Primary Choice Plan HMO will be offered throughout most of Massachusetts. Tufts Health Plan Spirit will be an Exclusive Provider Organization, which, like an HMO, does not offer out-of-network benefits, with the exception of emergency care.

All GIC employee health plans include tiered physician networks. Members pay lower office visit copays for providers with the highest quality and/or cost-efficiency scores as part of the GIC's Clinical Performance Improvement Initiative. Many of the GIC's health plans also tier hospitals based on quality and/or cost.

The premium costs for the two new health plans are 20% below their wider network counterparts. State employees who pay 25% of the premium will save $30 to $76 per month, depending on their plan selection and whether they enroll in individual or family coverage. The Commission also voted average weighted rate increases for FY11 for all of the GIC's employee and Medicare health plans of 7.91%.

This information provided by the Group Insurance Commission.