HealthMarket Buys Power To Write Coverage

Today, HealthMarket has about 15,000 defined-contribution plan members and is adding 3,000 per month. Resnick finds that most of the businesses coming to HealthMarket are using its program to replace existing health insurance plans.

HealthMarket, like other defined-contribution health companies, offers a combination of catastrophic health insurance and employer-funded personal care accounts.

Critics worry that the system will punish employees with medical problems and discourage employees from seeking preventive care.

Supporters say the system will give all employees an incentive to be careful health care consumers and allow sick employees the freedom to seek the best possible care, without having to plead for referrals or make their case to medical utilization review services.

Although traditional managed care companies are known for "managing care," they also help plan members by negotiating prices with the doctors, hospitals and clinics in their networks.

HealthMarket does not use financial incentives or penalties to steer members toward certain providers, but it does offer members discounted network rates negotiated by Private Healthcare Systems, Waltham, Mass., a major network management consortium, Resnick says.

A small health insurer, or a large health insurer with a small presence in a particular market, often has a hard time reminding its providers that they belong to its provider network. But using the PHCS network solves that problem, because the PHCS is so well known, Resnick says.

Another distinguishing feature is the approach HealthMarket uses to run its personal care accounts. For now, the federal tax laws governing employee-controlled care accounts are complicated and unsettled.

To get around those problems, HealthMarket plans keep ownership of the HealthMarket plan personal care accounts, Resnick says.

An employer might contribute $1,000 per account per year, and an employee with no bills can roll the full $1,000 over to the next plan year. But the plan is the true owner of the cash, and employers who leave cannot take the cash with them, Resnick says.