Cost Plus health plans are catching on in Texas. Brokers in key geographic areas are advising their clients to consider this innovative approach to reigning in their health care costs. Some brokers are jumping on the cost plus bandwagon because they see the results and believe in them, while others do so as a matter of survival.
Carriers seem worried. Carrier representatives, on the verge of irrational behaviour in fighing the cost-plus approach, are worried that some of their biggest broker producers are begining to embrace the cost[plus method of health care finance, many with rare enthusiam.
Key Stop Loss Carriers are joining the cost-plus avalanch with several major A+ stop loss markets actively recommending the scheme to their clients.
Below is a partial copy of a Seminar Invitation a large brokerage firm in Texas has sent out to key accounts inviting them to learn about the cost plus approach to health care:
San Antonio Company Lowers Healthcare Cost by over 40%
As quoted in Forbes Magazine (5/11/09)
Forbes BusinessWire reported that Bill Miller Bar-B-Q, a San Antonio-based restaurant chain, terminated its PPO program in August, 2008, and restructured its group health insurance program by partnering with area medical providers. Under its new program, medical care providers are reimbursed on a cost-plus basis. This program starts at cost and adds a margin rather than relying on PPO networks and insurance companies who historically pay based on a phantom original bill which is then discounted. As of May, 2009, when this story was first reported, Bill Miller Bar-B-Q’s benefits consultant attested that the company would have spent as much as 40% or more for the same benefits had they remained on a traditional PPO program.