New York City hopes to attract small businesses with public-private health insur
New York City hopes to attract small businesses with public-private health insurance partnership
Plan offers low premiums, restricted network in some of the city’s poorest neighborhoods
Market research and policy direction from the mayor’s office are sending New York City officials to the private sector to help the city’s growing uninsured population.
A partnership between the city’s Health and Hospitals Corporation, two of the city’s five provider networks, and insurer Group Health Incorporated is offering a low-cost preferred provider product to employers in the city’s poorest neighborhoods. The plan is limited to employers with two to 50 employees and is targeted to employers who currently do not offer insurance.
Taking their cues from extensive market research and mistakes made in similar efforts throughout the nation, New York City officials designed their product to resemble a conventional employer health insurance plan as much as possible. The Small Business Insurance Program is available to all businesses, regardless of whether they currently offer insurance, and is marketed through brokers. No direct government or private sector subsidy is used to keep the rates modest. Officials specifically rejected targeting strategies such as requiring businesses to prove financial need to qualify for coverage.
"They don’t want to feel this is a handout. They’re very proud," says Rosa Gil, DSW, chair of the New York City Health and Hospitals Corporation (HHC) Board.
After about a month of marketing, the product has signed up seven employer groups with a total of something less than 100 covered lives. The target enrollment for two years out is 3,000 covered lives. City officials estimate that there are 26,000 small businesses eligible for the project in the zip codes served by the three hospital networks, about half of which currently do not offer health insurance to their employees.
Monthly premium rates range from $99.80 for an individual employee to $235.22 for an employee, spouse, and children. HHC market research in 1997 showed that the average premium for an employee in a small businesses was $255, surpassing the typical HMO individual premium of $150 to $200.
City officials hope the plan’s severely restricted provider panel—three public hospitals in two networks and their affiliated physicians and clinics—will be attractive only to employers who do not currently offer insurance. While the plan is structured as a preferred provider organization, it resembles a health maintenance organization in that coverage benefits outside the network are limited to emergency care and services not available in-house.
The plan does not have a gatekeeper, but does assign each member a care manager. One of the primary goals of the care manager will be to reduce inappropriate emergency department use among plan members.
The provider networks in the plan are located in some of New York City’s poorest neighborhoods: north Brooklyn, East Harlem, and the South Bronx. The hospitals, clinics, and physicians in these networks have agreed to accept modest reimbursements as a way to offset their charity burden. Uncompensated care at the three hospitals ranges from 7.5% to 10% of discharges and from 19.1% to 27.5% of outpatient visits.
City officials are kicking off the project at a time when New York City is dealing with an eight-year run of declining private sector health coverage and instability in the city’s Medicaid market. (See story, State Health Watch, November 1998, p. 1.) On the agenda for New York City is sponsorship of a private-sector purchasing alliance that will attempt to increase provider choice among those with employer-based coverage, Ms. Gil says.
Contact Ms. Gil at (212) 788-2888.
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