Insurer may roll out first-known plan that would cut premiums by urging customers to get in shape.
Blue Cross & Blue Shield of Rhode Island plans to introduce a new health plan that will allow individual workers to substantially reduce their premium contributions by agreeing to take steps to get healthier.
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For example, an employee who is a smoker might be required to attend a smoking-cessation course before being credited with the premium savings.
Blue Cross officials say they know of no other health insurer in the country offering a plan that links employee participation in health and wellness programs to discounted premium contributions. The savings for individual employees could range from $1,000 and $1,500 annually, depending on the employer’s benefit structure, Blue Cross estimates.
“A lot of insurers pay lip service to health and wellness,” Blue Cross President and Chief Executive Officer Ron Battista said in an interview last week.
“But this is a big-time effort by Blue Cross to improve quality of life through improved health,” he said. “And in the process, we will begin to solve the affordability issue.”
The idea is that over time, workers will become healthier, which will drive down their employers’ premiums, Battista said.
Blue Cross will offer a pilot plan to its own employees beginning Jan. 1. If successful, it will roll out the product to larger groups starting next spring, eventually offering it statewide, officials said.
While Blue Cross offers hundreds of products with various wrinkles in coverage, the new product, to be called “Personal Choices,” should become one of the insurer’s flagship products, officials said.
Battista said Blue Cross plans to form a subsidiary in part to administer
the program.
Customized ‘wellness’ programs
Employers who sign up would agree to raise their employee contribution toward health premiums across the board. For example, a company now paying 100 percent of its workers’ health coverage might knock that contribution down to 85 percent, leaving the employee with a 15 percent contribution.
“You as the employee will have to pay that 15 percent, but you can buy that 15 percent back” by agreeing to follow a health-improvement plan and sticking to it, Battista said.
Blue Cross officials concede that employees in essence would be averting a cost increase – not saving on what they were paying.
“But employers who do not participate, even if they don’t need to increase employee contributions right now, at some point that increase would come,” said Blue Cross spokesman Scott Fraser. He said that Personal Choices offers employees the chance to keep their contribution levels where they are while saving on rates in the long run.
The first step would be a formal health-risk assessment, devised by the University of Michigan, which would identify employees’ risk behaviors and disease states. Blue Cross would use the assessment to develop a tailored program aimed at improving the health of each employee.
An employee who is obese, for example, might be required to follow a strict weight-loss program.
Blue Cross will be able to make sure members aren’t slacking on their health-improvement plans, Battista said. For example, if a member skips a scheduled doctor’s visit or fails to fill a prescription, that would raise red flags that the member isn’t living up to his or her end of the deal.
Employees who opt not to participate in a health program would be stuck paying
the higher contribution toward their premiums.
‘Quite innovative’
Glen Mays, a senior health researcher at the Center for Studying Health System Change, a nonprofit research group in Washington, D.C., said the Blue Cross plan, on its face, sounds like a powerful incentive for employees.
“I don’t think we’ve seen a plan in any marketplace where participation in care management or disease management is linked to discounted premium contributions,” Mays said when told of the Blue Cross proposal. “It does seem quite innovative.”
Employer-sponsored disease-management programs are not new. Indeed, a study issued earlier this month by the Henry J. Kaiser Family Foundation found that disease management has become the most popular way that employers attempt to contain health care costs.
Many employers, for example, have begun offering discounted co-payments on prescription drugs to entice employees to take a disease-management course.
“Employers now see disease management and care management as being one of the only alternatives to contain costs, aside from decreasing benefits and cost sharing,” Mays said.
But low participation rates and scant evidence that disease-management programs actually lower costs have stymied employers’ efforts.
The Kaiser study says that fewer than 25 percent of employers that offer such programs say they are effective at curbing costs.
Mays said Blue Cross’ strategy of tying participation to premiums, rather than co-payments, should at least remedy the apathy problem.
“It’s a stronger incentive because of the money involved,” he said. “That’s
real money, as opposed to saving on a $15 or $30 co-payment.”
Individuals ‘step to the plate’
Battista admits that the plan is a “carrot-and-stick” approach to improving the health of Blue Cross’ membership. But he says the wellness programs now being promoted across the country by HMOs, employers and public health officials aren’t effective.
“Quitting smoking because it’s bad for you has not won the day,” Battista said.
Recently, though, Battista said more and more employers and individuals are “stepping to the plate” to take responsibility for their health – not because it’s the right thing to do, he says, but because costs are so high.
It’s what he calls the “silver lining” of the recent, inexorable rise in health insurance premiums: People are willing to do most anything – even agreeing to eat right and exercise, for example – if it means lowering their health care bills.
For employees, the benefits to the new plan are immediate: They avoid a substantial increase in their premium contribution. But employers will have to be more patient, Battista said.
He warned that rates actually could go up initially, because employees will be accessing more services to comply with their customized plan. Over time, though, premium rates should go down as the group becomes healthier and utilization drops, he said.
The state Legislature earlier this year passed a bill that will allow Blue Cross eventually to pool all the Personal Choices members into one group – regardless of their employer – for purposes of determining rates.
That way, Battista said, members will benefit from the lower rates that are expected to flow from improved health, rather than being stuck in an insurance pool with people who show no effort to stay healthy.
Blue Cross officials have discussed the concept with some large employers, Chambers of commerce and insurance brokers, many of which have shown an interest, Battista said.
“The line is longer than I can tell you,” he said.
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