Making the Switch--HMO to PPO

Paige · April 2004

Our insurance renewal is set for 5/1/04 and we were handed a 22% increase. I was told that our medical loss ratio was 109% (target is 86%) and our claims have exceeded our premiums for at least the past 2 years.

We are looking at high-deductible PPO plans and instituting an HRA to go along with it. Employer will pay half of the deductible and it will be on the front end (first half of the deductible).

Does anyone have experience making a similar switch? How was it received? How did it turn out in the end? Any advice or feedback from experience would be greatly appreciated.

Thanks!

hrbanker · April 2004

Before switching companies, have you tried negotiating a lower rate? Every year our health insurance provider gives us a HIGH increase and I tell them what the company can afford. They are always willing to work with me. We have gone from a high of 25-30% 'first round' to 9-14% final increase.

cebudragonlady · April 2004

The only reservation that I have with PPOs is that , from my prior experience, the premiums Employees had to pay were outta sight , way more than the HMOs were charging ! Is that still true ?

Chari

hrbanker · April 2004

I've found that the HMO & PPO rates are very close. Differences: the HMO is more limited in where service is provided and some of our employees would have to travel 30 minutes to a network doctor. The PPO allows us to go to anyone in their nationwide network, as well as to go out of network (and pay deductibles and co-pays).

Paige · April 2004

In our case, if we stay with our current HMO plan, which does happen to be a pretty rich plan, our rates increase 22%. However, if we go with this high-deductible PPO plan, our rates will DECREASE from where we are right now by 9%.

Maybe PPOs with lower deductibles are more comparable to HMOs, but in this case, the rates are quite different.

Making the Switch--HMO to PPO

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