Testimony on Senate Bill 1430: Authorizing a New Health Insurance Option

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Stacey Pogue /(512) 320-0222 x 117

May 9, 2011

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Senate Bill 1430 authorizes a new type of fully insured health benefit plan, an exclusive provider organization (EPO), that combines features from preferred provider organization (PPO) plans and health maintenance organizations (HMOs). EPOs have the potential to lower premiums, which can increase access to coverage for small employers and families. However, lower EPO premiums come with tradeoffs for consumers—less access to out-of-network care than a PPO and higher and less predictable out-of-pocket costs (deductibles and coinsurance) than an HMO.

As filed, CPPP was concerned that SB 1430 lacked needed consumer protections. But CPPP is satisfied with the language of the committee substitute, which ensures access to out-of-network care when a service is not available in-network, improves disclosure, and extends relevant balance billing protections that exist today for HMOs.