Opposition to OMNIA Tiered Health Insurance Continues to Grow

Source: NJ Spotlight
Opposition to the new OMNIA tiered health-insurance plan started soon after Horizon BlueCross BlueShield announced the low-cost product in September. The rollout sparked protests in Trenton, controversial billboards in North Jersey, and a flurry of legal actions. It prompted a written appeal from a trio of former New Jersey governors and a growing number of published letters and editorials. Even a group of nurses from a trio of north Jersey hospitals gathered at Newark Penn Station to reiterate their concerns that the insurance plan will harm many of the state’s smaller, community, or safety-net hospitals as consumers migrate elsewhere to save money.
Tiered plans like OMNIA are designed to create savings for customers by negotiating lower rates with healthcare providers and by keeping patients healthier. Patients who visit doctors and hospitals in OMNIA’s Tier 1 will save even more on out-of-pocket costs.
Some lawmakers have raised concerns, however, holding hearings on OMNIA and proposing a number of regulatory changes last year. Several measures seek to establish new standards for tiered plans and increase the transparency around the development of these plans, something critics say was sorely lacking with OMNIA’s rollout.
Horizon officials have downplayed the significance of the governor’s letter and the ongoing barrage of lawsuits from Tier 2 hospitals. Last month the insurance giant blasted the hospitals’ advertising campaign in a legal brief of its own. The company also defends the plan’s creation, which borrows certain traits from earlier tiered plans it created — although those models didn’t cause the same stir, officials note.
But some Tier 2 hospital executives insist that — regardless of consumer demand — this model has opened a new floodgate and that Horizon, the state’s largest insurance company, with 3.8 million customers, is using its tremendous power to muscle them out of the market. “We haven’t seen a demonstrable change in business yet,” said Michael Maron, CEO of Holy Name Medical Center, which has led the fight against OMNIA. “But it’s created a lot of chaos and confusion for patients and providers.”
Ray Castro, a healthcare expert with liberal think tank New Jersey Policy Perspective, said that the trend toward tiered products could change the landscape. Factor in other changes prompted by the Affordable Care Act and the ongoing consolidation among hospital systems, he said, and small community hospitals have reason to be concerned.
While Castro and others agree there is a serious need for lower-cost health insurance, the state should do more to ensure the details of these new products are clear to both patients and providers and that they provide adequate access to care. Doctors and hospitals need to know how these plans are created and what their participation involves.
“There are going to be winners and losers, that’s the whole point,” he said, noting that the competition created is essential to curbing costs. “But we need clearer standards.”

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