In California, like in many states, there is a blurring line between what defines an HMO compared to other forms of health insurance. Almost all insurance carriers now offer “a broad array of products, some of which do not conform to traditional product designs.”
While HMO enrollment has declined in other states recently, HMO enrollment has been steady in California. Over 60% of commercial enrollees have either an HMO or POS plan.
California has 2 health insurance regulatory bodies: the Department of Managed Heath Care (DMHC) and the California Deparment of Insurance (CDI). DMHC is responsible for regulating all HMO plans and some PPO plans, while CDI regulates other PPO plans.
Consumer Directed Health Plans are gaining ground. Most large employer offer CDHPs as one choice among many health insurance options. On the other hand, many small businesses are replacing traditional health insurance products with CDHPs as the employees only option.
Anthem, Aetna and Cigna have introduced 3 tiers of network physicians. There is a high-performance tier (based on physician cost and quality), a second in-network tier, and an out-of-network tier.
Some employers have cut cost by giving employees a narrow network plan, which gives them access only to a narrow set of physicians out of the carrier’s entire network. For instance, when Scripps Health System in San Diego started paying doctors via fee-for-service, many plays excluded Scripps doctors from many benefit packages. Other plans are attempting to remove the UCSD Medical Center physicians.