Universal health insurance did nothing to control claim costs or thereby premiums. The only thing that controls premiums is to contains costs!! Over the past five years the insurance carriers have made many changes to control claim costs:
- Deductible plans: the employee pays anywhere from $500 to $3000 for year for non-routine office prodecures, CAT-PET-MRI scans, Day Surgeries and Hospitalizations….
- Tiered hospitals: cost of procedure can vary widely depending on the hospital. We have seen plans where the cost can be $250 (Saint Vincent’s/Medical City) on one hospital and $2,000 (UMass) at another.
Once employees start paying out of their pockets, they begin to shop out procedures covered by their health insurance carrier, just like any other product that they buy. Not only do they lower their costs, but they lower the claims cost for their insurance company.
A by product of this is you have seen the rapid rise of facilities that provide low testing costs (Quest) and MRI’s (Shields), while high cost facilities are starting to notice a decline in their business. It does not surprise me to many changes at UMASS over the past year including the sale of Wing to Bay State today.