BlueCross BlueShield of Western New York and Catholic Health System are joining forces to offer a benefits plan that promises lower out-of-pocket costs to members who use the system’s facilities or specialists.
The “focus” plan, available to individuals and small employers, offers members access to any physician, specialist, hospital, urgent care center or facility in the BlueCross BlueShield network.
And this coverage comes at a lower premium price than standard plans offered by the insurer. However, members who choose to visit a non-Catholic Health hospital or specialist could pay a higher copay, deductible or other out-of-pocket expense, officials said.
Tiered benefit and narrow-network plans, which limit members to using certain providers but typically promise premium savings, are growing in popularity as health insurers and the employers who bear much of the burden of health insurance attempt to rein in health care costs.
The tiered-benefit plan, unlike a narrow-network plan, doesn’t limit access to certain provider networks or hospital systems. Members who choose the focus plan have access to the entire BlueCross BlueShield network.
However, to gain the lower copays, deductibles or other out-of-pocket costs, they have to use services delivered by Catholic Health facilities and specialists, said Dave Busch, senior vice president and chief sales officer with BlueCross BlueShield.
The focus plan also includes Roswell Park Cancer Institute and Women & Children’s Hospital of Buffalo on that first tier.
What’s the advantage of offering a tiered-benefit plan? And how, and why, can BlueCross BlueShield promise its members a lower premium price, to start, and lower out-of-pocket costs if they use Catholic Health services?
Busch said experience shows that members who use integrated services within the same provider network have better health outcomes, generating savings that the insurer can pass along as an incentive.
“This is a way for members and employers to benefit from those improved outcomes financially,” he said.
Busch said that members who are given the choice of a tiered-benefit plan or a standard product, with its higher premiums, choose the tiered-benefit plan about 30 percent of the time.
Just looking at monthly premiums – and not counting additional out-of-pocket costs – a member with family coverage who chooses a tiered-benefit plan sold through the exchange would save an average of 6 percent, compared with the premium cost of a standard plan, although what’s actually saved depends on a number of factors, said Kyle Rogers, a BlueCross BlueShield spokesman.
This is the second tiered-benefit plan offered by BlueCross BlueShield, following its “align” product introduced in 2013 that features Kaleida Health-based facilities and specialists.
That product is available on and off the exchanges for individuals, and it’s offered to small employers and large employers.
The focus option will be available on and off the NY State of Health insurance exchange to individuals starting Jan. 1.
Separately, it will be available to small-group employers, also on Jan. 1, Busch said. It will be available to large group employers later in the first quarter next year, he said.
The partnership between the region’s largest health insurer and second-largest hospital system is notable because the organizations two years ago engaged in a bitter public feud over one Medicare Advantage plan offered by BlueCross BlueShield that excluded non-emergency care at Catholic Health hospitals.
Catholic Health responded by posting billboards, newspaper ads and church bulletin notices urging consumers to pick a plan that included its hospitals. BlueCross BlueShield objected to the language in the ads because it stated that the plan “excludes all Catholic Health facilities,” when emergency care was fully covered there. BlueCross BlueShield also said that care at a Catholic Health facility provided by a primary care physician who accepts its insurance also would be covered.
The insurance company filed a federal lawsuit against Catholic Health in November 2014, accusing the hospital system of false and deceptive advertising. The company dropped the suit in December 2015 as part of a three-year contract that provides access for the insurer’s commercial membership to Catholic Health hospitals and to Catholic Health Partners physicians and specialists.
The insurer has continued to offer the narrow-network Medicare Advantage option, known as Senior Blue Select, through this year.
“That was one product we designed, in addition to all the products we offered. Catholic Health has always been a valued provider in our network. That was the same five years ago. It’s the same now. And we’re happy now to really leverage that relationship to add more options for the employers and members in the community,” Rogers said.
JoAnn Cavanaugh, a Catholic Health spokeswoman, said system officials weren’t available Wednesday to discuss the tiered-benefit plan.