More plans will exclude hospital benefits, compete on exchanges

But some insurers see such drastic limits to coverage as a threat to brand, reputation

Adding to the competition among insurers who sell their plans on health insurance exchanges is a new type of policy that excludes all hospital benefits.

Health plans provided through large, self-insured employers aren't required to include expensive hospital benefits under the Affordable Care Act. Those plans also often have no deductibles for doctor visits and prescriptions, very inexpensive co-payments and emergency room visits that cost between $250 to $400, reported Kaiser Health News.

"This is a stepping-stone to bring in employers who have never [offered] coverage," Bruce Flunker, president of Wisconsin-based benefits firm EBSO, told KHN.

Employers' interest in the hospital-excluded plans is "picking up," Kevin Schlotman, director of benefits at Benovation, an Ohio firm that designs and administers health coverage, told KHN. "These are organizations that are facing a significant increase in expenses. They're trying to do their best."

Since about 90 percent of S&P 500 companies said they will shift from employer-based coverage to plans sold on the federal marketplace by 2020, these hospital-excluded plans could increase during the next several years.

But not all industry experts believe these plans are good for business. High-quality plans are good for recruitment and retention, Gretchen Young, a senior vice president at the ERISA Industry Committee, which represents very large employers, told KHN.  "You're not going to get very far with employees if you don't cover hospitalization."

And don't expect big insurers to jump onto the trend of excluding hospital benefits, the article notes. Blue Cross Blue Shield of Louisiana, for example, said excluding hospital coverage would be bad for its reputation. 

To learn more:
- read the Kaiser Health News article

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