Omina Tiered Health Insurance Plans Should Mean Savings

Source: NJ Spotlight
The tiered coverage just introduced by the state’s biggest insurer has raised an outcry of concerns and questions — from hospitals, healthcare providers, and even potential patients. Ironically, the OMNIA Health Alliance from Horizon Blue Cross Blue Shield of New Jersey is being posited as an answer to the most important question of all: How much can insurance costs be cut in New Jersey?
The simple answer: a lot…The secret to the savings offered by the tiered plans is that people pay less if they receive healthcare from a select group of doctors and hospitals.
The fact that tiered plans offer significant savings has been so far lost in the debate over OMNIA. Most of the focus has been on complaints by hospitals left out of Horizon’s Tier 1.
The OMNIA Health Alliance is a partnership between Horizon and six hospital systems, thousands of doctors affiliated with those hospitals, and Summit Medical Group, the state’s largest doctor-owned medical practice. Horizon hasn’t announced the details of the OMNIA plans that it will offer to those who are insured through private-sector employers or the federally operated insurance marketplace. (New Jersey public employees could opt for tiered coverage starting yesterday.)
These providers have agreed to shift some of their payments away from the volume of services they deliver and toward the “value” they deliver, as determined by various performance measurements. They also have agreed to be paid less per patient in return for a promise of receiving more Horizon referrals…Horizon’s Tier 1 includes other hospitals…in order to cover more of the state geographically.

Legislators and local politicians have questioned the transparency of the process used to set up the tiered plans. In response, Horizon officials have said that they will go further on Monday to detail how they designed the plans than any New Jersey insurer ever has.

According to Desmond Slattery, an insurance broker and the legislative committee chairman for the New Jersey Association of Health Underwriters, “Jersey’s got the highest health insurance premiums in the country, so every year we’re trying to come up with new initiatives for our broker clients and this will certainly be in the mix.
New Jersey Policy Perspective senior policy analyst Raymond J. Castro also focused on the potential benefit of the tiered health plans to lower costs. “It has a lot of very positive potential and it deals with the three big issues of healthcare — affordability, access, and quality,” Castro said. Affordability is addressed through lower premiums; access is maintained by allowing patients to continue to go to Tier 2 hospitals and specialists; and quality is pursued through the use of value-based payments.
“I think there’s a lot more that the state can do,” Castro said. “This is a step in the right direction.”

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