A hospital chain in Massachusetts is trying something different. They have created a health insurance policy that costs less than what many other insurers are charging for premiums. The “catch” is that the insurance is only usable for care and treatment that was given in one of their hospitals. Could this be the future of health insurance?
Right now, hospitals and insurance companies are completely different entitles. They work closely together, but they are legally and financially separate from each other. You apply for health insurance through an insurance company. If the insurer approves your application, then you can use that health insurance coverage for the care you receive.
Typically, your only restrictions are whether or not the plan covers certain types of health care, and whether or not the doctor or hospital is included as a part of your insurer’s “network”. An HMO plan will not pay for any treatment by any doctor that is out of network. A PPO plan, on the other hand, might. There are a lot of variables to take into account, depending on the type of health insurance you were able to purchase.
In Massachusetts, a hospital chain called Steward has decided to start selling health insurance. The health insurance plan is called “Steward Community Choice”, and it is technically administered through Tenet Health Plans.
It works very differently than other health insurance plans. Basically, those who purchase the “Steward Community Choice” health insurance policy are buying it from the Steward hospital system. The plan has what might be considered to be a very large restriction. It can only be used on health care that is given at one of the Steward hospital chain’s locations. Care or treatment that is given anywhere else will not be covered, no matter what.
This plan is something that small businesses may find attractive, because it offers them premiums that are 20% to 30% lower than what the other insurance companies in Massachusetts are charging. The idea is that small business owners, who are struggling to be able to afford to pay for employer sponsored health insurance, might have an easier time paying for the Steward Community Choice plan.
The state of Massachusetts is a few steps ahead of where most other states in America are at, in terms of health care. They began health care reform earlier than many other states. In 2014, the insurance exchanges are expected to be up and running. Ideally, all Americans are supposed to be able to find affordable health insurance at that time.
Massachusetts is currently trying to figure out how the state will be able to pay for all that insurance coverage. It is a problem that all states will be facing soon. The Steward Community Choice plan is an attempt to make things work. It is unknown whether or not Americans will like the idea of accepting the incredibly restrictive limits of this type of health insurance, in exchange for a lower premium.
Image by Liz West on Flickr