By Richard Asinof
PROVIDENCE – Blue Cross & Blue Shield of Rhode Island announced a new plan option Monday for its Direct Pay customers, which features a “diminishing discount” program similar to driver discount programs offered by auto insurers.
Through its Direct Pay health insurance plans, Blue Cross offers health insurance to individuals and families who cannot obtain health insurance through the workplace or who are not eligible for Medicaid or Medicare programs.
There are currently about 15,000 customers enrolled in Blue Cross’s Direct Pay health insurance plans, according to Kim Reingold, Blue Cross spokeswoman.
Under the program, Direct Pay customers who do not fully utilize their benefits in a given year will be rewarded with a lower deductible the following year, said Jim Gallagher assistant vice president of Strategic Marketing and Product Innovation at Blue Cross.
For example, individuals and families will be eligible for a 20 percent deductible discount in year two, a 40 percent discount in year three, and a 50 percent discount in year four, according to Gallagher.
For a customer in the Blue Solutions plan with a Health Savings Account with a $6,000 first year deductible, that would result in a decrease to $4,800 in year two, $3,600 in year three and $3,000 in year four if the deductible is not met.
If the deductible is met in any year, the deductible resets to the original amount the following year, and the program restarts.
Gallagher positioned the new program as a way to encourage members with high deductibles to choose lower-cost options for health care in managing their health care needs. “We’re hoping that the diminishing deductible program will help incent [members] to get the most value out of their health care coverage,” he said.
“A member with a bad sore throat, for instance, has the option of seeking treatment with their primary care physician, an urgent care clinic or an emergency room,” added Gallagher. “They’ll probably receive similar treatment at all three locations, but a trip to the emergency room that totals more than $800 is going to run up their deductible much faster than the average $120 appointment with their primary care physician, which is a better choice.”
Blue Cross is now offering five plans in its Direct Care health insurance packages, including its new BlueValue Direct 2500 plan, designed for an individual looking for the lowest possible monthly premium, according to Blue Cross.
Open enrollment for Direct Pay health plans runs from May 15 to June 15, 2012 for a July 1, 2012, effective date. The health plan coverage is expected to run through when Dec.31, 2013, when the new R.I. Health Benefits Exchange is scheduled to begin operation.
R.I. Health Insurance Commissioner Christopher F. Koller has said that he expects that the “array of products and their pricing will change considerably” as a result of implementation federal health care reform.
The potential market in Rhode Island for individuals and families in this market is estimated to be about 70,000, according to projections done for the R.I. Office of the Health Insurance Commissioner.
In March, Koller issued an order lowering the effective overall average rate for Blue Cross’s Direct Pay health insurance customers by 1.1 percent. The decrease in rates began April 1.