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Miami Insurance Experiment Wins Provider Concessions

Miami-Dade County, one of the most expensive healthcare markets in the country, has teamed up with Blue Cross Blue Shield of Florida in an effort to lower the number of Miami's uninsured, who include an estimated 600,000 people. The Florida Blues is offering a new health plan, Miami-Dade Blue, that will use discounts accepted by many local healthcare providers to cut insurance rates.

The rates will be as low as $100 a month for a healthy 35-year-old man. Of course, they will cost older and sicker people more, and the Blues will still reject applicants who are seriously ill. However, small businesses are guaranteed coverage if 70 percent of their employees participate and the companies pay at least half of the premiums.

The deductible is an affordable $250, after which the Blues will pay 90 percent of in-network hospital costs and 100 percent of in-network lab costs. Office visits will cost $50. The plan covers generic drugs with a $10 copay, and brand drugs will be available at the Blue's negotiated cost. The annual out of pocket limit for an individual will be $2,500, with a $5 million lifetime ceiling on insurance payments.

Naturally, the provider network is limited. About 1,500 primary-care doctors have agreed to accept the low fees, and 20 community clinics are also in the network. Among the seven participating hospitals are three in the Jackson Health System; Tenet's Palmetto General, Hialeah and Coral Gables facilities; and the Baptist system's Homestead Hospital. The county helped shape the health plan's benefits and selected Blue Cross Blue Shield in a bidding process, but taxpayers will not subsidize the plan.

In January, Florida launched a program offering low-cost insurance plans to the state's 3.8 million uninsured people. The average cost of those plans is $155 a month, but the deductibles are high. For example, the Blues' catastrophic policy carries a $3,000 family deductible. Perhaps because of that, there have been few takers. Miami-Dade Blue might be more successful, if only because of its lower out of pocket costs.

Massachusetts has also offered relatively cheap insurance to many of its uninsured, who are required to buy coverage under the state's 2006 reform law. As of last fall, 41 percent of the 439,000 newly insured people in Massachusetts had bought health plans subsidized by the state. But while this approach has helped lower the uninsured rate to 3 percent, it is endangered by soaring costs and inadequate access to primary care.

Neither Miami-Dade County nor Florida has proposed public subsidies for insurance or an individual mandate. Moreover, the uninsured rate is far higher in Florida than it was in Massachusetts before the latter state put its reforms into effect.

Policymakers in Washington are evaluating the Massachusetts experience as they continue to pilot a course toward national reform. But they should also take a close look at what happens in Miami during the next several months. While government subsidies will certainly be required to reach universal coverage, the willingness of providers to bend on price might spell the difference between success and failure.

On an unrelated matter, readers who are interested in the latest and greatest healthcare blogs should visit the "Health Wonk Review," which this week is hosted by Boston Health News.

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