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Tiered and limited network health plans options

February 15, 2011

The Boston Globe ran a front page article last week  explaining some new health plans that are being implemented as a means to control health costs. These plans are known as tiered or limited network plans that require a deductible if an employee wishes to be treated at these designated high cost facilities. The purpose of the plans is to drive employees to the lower cost facilities; however, employees can choose the higher cost facilities should they agree to pay the deductible associated with these providers or hospitals.

Typically, the deductibles for these plans can range from $500 to $2,000 per visit. These plans are different from the high deductible plans that have been available for a number of years. The high deductible plans affect all covered employees which impose an upfront deductible before benefits are payable. They reduce overall plan costs with reduced premiums when compared to typical low co-pay plans; however, they do not provide the consumer with a choice of reducing their out-of-pocket cost by choosing a lower cost provider.

With the implementation of National Healthcare Reform, there is increased pressure on the insurance companies to help reduce the costs. These tiered and limited network plans are designed to put the employers and employees in the game with the insurance companies – to help lower costs. We will most likely see an increased participation in these types of plans in the coming years as a means to help control costs.

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