Humana has introduced a new health plan for small businesses in Wisconsin, designed to give consumers a greater measure of control, while addressing the rapidly rising cost of health care.
Called HumanaCoverage-First PPO, the plan provides a benefit allowance — a sum of money for consumers to use on health-care services before any deductible.
"Small employers are rightly concerned about the rising cost of health care," said Larry Rambo, chief executive officer of Humana’s Wisconsin market. "These plans address the cost challenge by giving consumers an incentive to become informed purchasers of health care. With these plans, consumers have a reason to investigate the cost and effectiveness of various treatments and various health-care providers which, in turn, can help slow our state’s rapid rise in health-care cost."
HumanaCoverage-First PPO is different than a traditional PPO plan. The plan gives enrollees $500 to use on health services before they pay anything toward their deductible. The benefit allowance can be used for visits to the doctor’s office, surgery and most other kinds of care, but not for co-payments, pharmacy expenses or mental health expenses.
Once expenses reach $500 and the benefit allowance is depleted, the enrollee pays for all health expenses until a deductible is met. Then, a more standard PPO plan takes effect, with customers paying only a portion of their health expenses until they reach an annual out-of-pocket maximum.
"According to Humana’s own data, more than 60% of covered individuals incur less than $500 in claims each year," said Tod Zacharias, vice president of Humana’s small group division. "The Coverage-First plan gives those relatively healthy individuals some value for the premiums they pay. This may give healthier individuals a reason to keep, and not forego, health coverage. That means a greater number of healthy individuals to balance the financial risk of illness, which can help keep the cost of health coverage down for everyone."
HumanaCoverage-First PPO is now available in Wisconsin for small businesses with between two and 50 employees – as well as larger groups. Coverage-First can also be paired with a more traditional PPO plan in a dual-choice arrangement, or even an HMO plan where available.
"In a dual-choice arrangement, employers choose two plans and employees pick the one that best suits their needs," said Gary Davis, small group sales director for Humana in Wisconsin. "For example, employees could choose the Coverage-First plan at a lower premium level, or choose to pay a bit more for a conventional PPO plan. So far, employers have been very interested in the dual-choice option."
HumanaCoverage-First PPO includes several deductible and co-payment options, as well as Humana’s Rx-4, four-tiered pharmacy benefit. The plans became available in Wisconsin in August.
"It’s a very good, innovative, creative approach," said Bob Riches, a Milwaukee insurance agent with M. Barrington Corp., who has already placed several clients on the Coverage-First plan. "It should help in controlling initial rates, as well as yearly increases, and should become a major offering."
Oct. 11, 2002 Small Business Times, Milwaukee
