Humana offers new PPO for small businesses

The new PPO will increase fees for members seeking care outside the network and introduce a four-tiered drug benefit.

By Cheryl Jackson, amednews staff. May 7, 2001.

Aiming to offer more choice to customers while passing some of the costs on to plan members, Humana Inc. is rolling out a new PPO that penalizes members who use doctors and hospitals outside of the network.

The new product includes a four-tier prescription drug benefit. Over the past few years, insurers had moved to a three-tier plan to control rising drug costs.

PPO 2001 plans are designed for small businesses that want to provide choice to employers and their workers but still get a grip on escalating drug and other medical costs, Humana officials said.

The plans discourage members from seeking care outside the networks by raising deductibles, co-payments and other fees associated with out-of-network treatment.

"These are structured to encourage our members to seek care in the network and to take full advantage of those discounts, more so than our previous versions," Humana spokesman Mark Mathis said.

"What small employers have told us is that they're having a very difficult time affording the rising cost of health insurance. By structuring it this way we can take advantage of these discounts and hopefully hold down the premium costs," he said. "At the same time we recognize people sometimes have a need to see doctors and providers outside of their networks."

Already offered in Wisconsin, Texas and Tennessee and scheduled for launch in Michigan and Nevada this month, PPO 2001 will be available in 24 states by the end of the year.

The four-tier drug benefit eliminates the need for prior authorization of a prescription in about 99% of the cases, Humana officials say.

Patients can opt to pay a lower co-payment for low-cost drugs -- including some brand name drugs -- and higher costs for more expensive products, which will include some generic drugs.