A group of Minneapolis business organizations intends to form a healthcare plan that includes some 1,400 small to medium-sized companies and covers as many as 200,000 lives.
The Employers Association, the Minnesota Chamber of Commerce and the Business Health Care Action Group last week said their effort to join forces will allow them to pool their resources and increase their purchasing power.
"This plan could cover a couple hundred thousand lives," said Thomas Ebert, president and chief executive officer of the Employers Association. "It'll be wide open for healthcare providers who want to bid on us."
The initiative was prompted, in part, by Prudential Insurance Co.'s recent decision to pull out of the managed-care market in Minnesota.
The Employers Association has a contract with Prudential through the end of 1995. Both sides have agreed to cancel that contract once the new healthcare plan is in operation.
About 13,000 people were enrolled in the Prudential plan, but the company's executives said it didn't have enough members to compete in the managed-care-intensive Twin Cities market.
The group will seek bids from healthcare providers next month, have the bids selected by December and offer the insurance product next spring, Mr. Ebert said.
The plan's members will include small businesses with as many as 500 employees. The Employers Association and the chamber of commerce hope a larger purchasing pool will allow the two organizations a number of health plan options.
Among the expected bidders is Allina Health System, which was created through a $2 billion merger of two of Minnesota's largest providers (Aug. 8, p. 56).
The new plan also could compete with eight plans offered by Blue Cross and Blue Shield of Minnesota, which released data earlier this month showing more than 1,500 small businesses have enrolled in their plans.
The emphasis on small-business insurance is also due to the state's MinnesotaCare health reform legislation. It says that coverage for small groups can't be dropped and rates can't be raised because of an increase in claims filed.