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Meet the Consumer-Directed HMO

It took a while for a managed care company to combine a consumer-directed plan with a traditional HMO. Health Net of California, taking advantage of the strengths of California's managed care market, is launching a hybrid product called OptimizerHMO that "provides tools to help [members] make better health care decisions and incentives for demonstrating healthy behaviors," says Stephen Lynch, president of Health Net.

The hybrid includes a health reimbursement account (HRA) that employees can use to cover out-of-pocket medical expenses using a special debit card. Under the plan, employers deposit $500, $750, or $1,000 into the HRA earmarked for each participating employee. Employees can track their HRA balances and out-of-pocket expenses online. Sound familiar?

In addition, the product rewards healthy behavior by depositing $100 into a member's HRA if he completes a health risk questionnaire. Filling out the questionnaire provides access to information about health improvement and health topics of interest to the member. Another $100 is deposited if the member contacts a health coach within six months of a hospitalization.

Other tools include a treatment cost estimator, a medical group and hospital quality comparison report, and an encyclopedia of health information. At enrollment, members must choose a primary care physician to serve as a gatekeeper, as with a traditional HMO.

The product was rolled out in June and is open to employers with 51 or more employees. Health Net says the hybrid plan is priced at about 18 percent to 20 percent lower than the its traditional HMO products.

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