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The final option that has been evaluated is to leave the West Suburban Health Group and bid insurance by ourselves. Although counter-intuitive to the pricing structure of most health care packages, (more members = greater buying power = lower overall price), insurance companies have been known to provide competitive pricing to single employers. So, we explored this option. In late August the Town's benefits consultant, Cook & Co., sent out RFPs to the four major insurers the Town currently uses - Blue Cross Blue Shield of Massachusetts, Harvard Pilgrim Health
Care, Tufts Health Plan and Fallon Community Health Plan. This bid was structured with plan designs essentially identical to those currently offered to employees, i.e. $5.00 co-payments.
The results are shown below. Current Rates are to the left in blue, RFP (response from provider) rates are to the right in pink. Dollars shown represent total (employer + employee) monthly costs.
Plan |
Current Rates (Ind.) |
Current Rates (Fam.) |
RFP Rates (Ind.) |
RFP Rates (Fam.) |
BCBS HMO Blue |
$651.00 |
$1,747.00 |
$651.15 |
$1,707.96 |
HPHC HMO |
$605.00 |
$1,577.00 |
$714.69 |
$1,858.19 |
HPHC PPO |
$1,206.00 |
$1,622.00 |
$1,193.17 |
$3,102.25 |
Tufts HMO |
$620.00 |
$2,680.00 |
$658.38 |
$1,716.14 |
Tufts POS |
$1,206.00 |
$2,680.00 |
$1,275.56 |
$2,834.57 |
Fallon Direct |
$496.00 |
$1,341.00 |
$557.88 |
$1,511.86 |
Fallon Select |
$535.00 |
$1,442.00 |
$641.24 |
$1,737.77 |
Fallon PPO |
N/A |
N/A |
$750.26 |
$2,033.19 |
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Unfortunately, only the BCBS HMO Blue option does not result in significant cost increase in individual or family plans or both. Because this option does not produce cost savings, it is no longer under consideration.
It should be noted that we have also explored the cost savings if the co-payments were increased to, say, $10 or $15. The estimated savings for each $5 increase in co-payments is 1% of the premium cost. So even this option does not result in overall cost savings to the Town or to employees.
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