HEALTH BENEFITS REPORT
One of the reasons our health insurance premiums keep rising
As of this writing , preliminary rate increases for the State health benefits have been introduced and were presented at between 5 percent and 8 percent for actives . While we are working with the Department of Treasury and the Division of Pensions and Benefits to refine the rates as currently constituted , we thought this might be a good time to advise you of one of the cost drivers for the rate increases .
Several years ago , the State Health Benefits Commission abolished the old traditional plan and marked it unsustainable . Currently , these plans are very expensive , to the point of being prohibitive for the employer and our members . With very few exceptions , traditional plans are owned only by longtime retirees . At the time the traditional plans were removed , they were replaced by PPO ( Preferred Provider Organization ) plans that encouraged the use of a network , which was incentivized by a low copay but also had an out-of-network benefit .
These plans were less expensive to the premium payor and provide an excellent standard of care with a safety net that would allow members to use any provider with reimbursement at a percentage of a usual and customary rate .
The third-party administrators ( in the SHBP , Horizon and Aetna ) negotiated lower rates with network doctors , usually about 90 percent of Centers for Medicare & Medicaid Services ( CMS ), which is the rate that Medicare pays and the index on which most medical payments are based . The out-of-network payment schedules have been based in law and are currently 90 percent of FAIR Health , which is an index that shows what a procedure or service costs in a geographic region ( except for hospitals , as the legislature found it appropriate to allow out-of-network doctors at in-network hospitals to essentially charge as much as they want ).
The problem with FAIR Health is that it is and has been manipulated by by practitioners reporting inflated charges for procedures and artificially inflating the payment index . This , in turn , has encouraged doctors to migrate out of the network in order to charge a much higher rate for their services . Practitioners have recreated the “ traditional ” plans , which have had a direct impact on premiums and , in turn , your chapter 78 contributions .
What is the solution ? First , we as consumers must utilize the network whenever necessary . Second , we must create an index for payment to providers outside of the network that is equitable , provides decent compensation for their skills and ultimately is not influenced by attempts at manipulation by unscrupulous providers . Last , we need to control the amounts that providers at in-network hospitals can charge . Currently , hospital chains ( and I intentionally use that word instead of networks ) are employing doctors through separately owned companies so that they can charge out-of-network payments .
The choice is in the hands of each individual member : Would you like to put your money in the hands of the providers or in your pockets ? d
16 NEW JERSEY COPS ■ AUGUST 2018