Three Share Works in Tennessee

The state that flirted with bankruptcy under TennCare is now proving that limited benefits insurance can work. The cost $150 per month – split evenly among the individual, the employer and the state. Beneficiaries get up to 12 primary care visits, limited hospital stays, generic-only prescriptions and a maximum overall benefit of $25,000. The new program, called CoverTN, is challenging three conventional assumptions:

  • That catastrophic insurance is socially more important than noncatastrophic coverage.
  • That people can manage small medical expenses better than large ones.
  • That limited benefit insurance has little social value.

"What we're finding is that even in health care, when people know that there are limits, they work to manage their costs."

  • Of 15,000 enrollees, only four exceeded the $25,000 spending limit and only three (2/100ths of 1%!) exceeded the hospital inpatient limits.
  • Although 4% exceeded their quarterly pharmacy limits, they can cut their personal, out-of-pocket costs in half by paying for drugs at CoverTN prices.

Full story is here.

Comments (3)

Trackback URL | Comments RSS Feed

  1. Joe S, says:

    These are very interesting results. Everyone just assumes that catastrophic care is expensive because patients rarely have any control over decision-making.

    When they are managing their own money,expenses rarely exceed $25,000. I assume no statistical test was done, but these results have to be statistically significant.

  2. Bart Ingles says:

    It sounds as though catastrophic coverage is overpriced. Whether it is worth owning depends in part on whether one has assets worth protecting.

  3. […] benefit plans and cost-sharing incentives – as explained in a Wall Street Journal oped and at this blog. « Previous […]