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.
On Thursday, 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. The group made the case directly to the legislators and other political movers and shakers boarding a train for their annual pilgrimage to Washington, D.C., sponsored by the New Jersey Chamber of Commerce.
“This is going to drive some of these institutions out of business,” said Sister Patricia Codey, executive director of the Catholic Health Partnership, which represents faith-based providers – only one of which was included in OMNIA’s preferred tier. She and other industry executives fear their facilities will lose out as patients migrate to the Tier 1 hospitals that can offer greater savings. This loss of revenue could have an outsized impact on safety-net facilities with already-thin margins and a mandate to provide care to poor and uninsured patients, she said. “It’s a death of a thousand cuts.”
Horizon’s low-cost OMNIA plan appears to be a hit with some consumers, who are eager to reduce their healthcare expenses, and policy experts say the model is increasing in popularity nationwide. 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.
“So far, it’s been great,” said Tara Cambria, who handles the healthcare plans for 80 employees at Cambria Truck Center, in Edison. Employees are thrilled with the low co-pays and are saving on prescriptions too, she said. “We’ve been saying for years, ‘Give me a reduction, give me a reduction’,” she said of the company’s rising healthcare costs. “You have to find some way to save. What other options do we have?”
Some lawmakers have raised concerns, however, holding hearings on OMNIA and proposing a number of regulatory changes last year. Additional hearings are under consideration for early March and members of the Assembly and Senate have re-introduced eight bills intended to improve the design of similar insurance plans in the future. 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.
“We’re interested in making sure both patients and physicians have all the information they need to purchase this insurance and be able to use it effectively,” said Larry Downs, CEO of the Medical Society of New Jersey, which represents doctors throughout the state “We’re not opposed to physicians being in Tier 1 or Tier 2 as long as they understand how they are being assigned.”The New Jersey Hospital Association -- which represents facilities in both tiers -- has taken a similar stance. Even Sister Codey notes: “We are for tiered networks. We are for quality. And we are for cost effectiveness. The difference is that we’re asking for transparency.”
Codey’s brother, former governor and current Sen. Richard Codey, D-Essex, joined former governors Brendan Byrne and Jon S. Corzine in signing a. Published last week, the trio claims the new plan will “erode the bedrock” of the state’s healthcare system.
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, which borrows certain traits from earlier tiered plans it created -- although those models didn’t cause the same stir, officials note.
“We’ve been more transparent about the tiering criteria than any other insurer,” said Horizon spokesman Tom Wilson. “The current system is broken, medical costs continue to rise at rates that exceed inflation, and most of our critics focus their energy complaining instead of offering solutions that deliver lower cost and better quality. New Jerseyans deserve solutions that, like OMNIA, deliver high quality at an affordable price.”
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. In the short term, they say OMNIA has flummoxed customers and providers and, therefore, can’t result in the coordinated care it promised.
“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 even if OMNIA itself has had little impact yet -- the plan opened to state employees in December and individual buyers from the public in January, and Horizon is still compiling enrollment data -- 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.
“In the healthcare industry all things come down to money,” he said. “And a hospital’s reputation is a huge thing.”
Castro and others agree there is a serious need for lower-cost health insurance and OMNIA is a sign of the times. He says 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.”