Blue Cross of Idaho helps reduce health costs for small employers

NATIONAL REPORTS-In Idaho, the rate of uninsured is nearly 18%. National research shows that as the cost of health insurance premiums increases, so does the number of small businesses who drop coverage for their employees. And, in general, small businesses are least likely to offer health insurance to their employees.

"Making healthcare premiums more affordable was the single most important factor for small employers to offer healthcare coverage to their employees," Blue Cross of Idaho President and CEO Ray Flachbart tells MANAGED HEALTHCARE EXECUTIVE.

Working with Boise area chambers of commerce, Blue Cross of Idaho reached out to the professional healthcare community, seeking discounts in the cost for a new, discounted healthcare coverage product. The local hospital community as well as the physicians in Blue Cross of Idaho's network of providers agreed to accept a 16% discount from the normal reimbursement from BC of Idaho. That reduction in the expected cost of healthcare services was factored into a new, lower price for this product. Also factored into a lower price was a discount in the normal administrative costs for BC of Idaho, and in the normal commission paid to any broker who would sell the new product.

"A key to this approach, different from the classic MEWA [multiple employer welfare arrangement] approach, is that the plan is fully-funded versus self-funded," says Rick Ingraham, global healthcare industry marketing manager, SAS. "However, this places a burden on BC of Idaho to aggressively monitor the plan's performance against the metrics first determined as acceptable. I recommend that any plan offering this product be sure that they have a clear approach to business intelligence that links performance monitoring to forecasting and prediction and that this approach be endorsed at the highest levels of executive management."

BC of Idaho's Chamber Blue and Essential Blue for Chambers are fully insured products, not part of a MEWA or what many states call an association health plan. "Under Idaho insurance code, we are able to create a separate pool of employer groups for this special product, with the stipulations of Chamber membership and lack of insurance for more than two years, and offer the special premium rates we have achieved," says Flachbart.