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Friday, Mar 29, 2024

HEALTH—Health Net Is First to Cross the Border With New Plan

Health Net of California has launched a medical plan that seeks to bridge the gap between Mexican workers here and the families they leave behind. The program, called Salud con Health Net, allows a Mexican worker in the U.S. to enroll in an HMO and use doctors and medical facilities in Mexico or get coverage for immediate family members there. Woodland Hills-based Health Net is believed to be the first health care provider to offer a cross-border program, but the growth of the Latino population in the U.S., along with a dearth of Spanish-speaking physicians here and the ongoing efforts of NAFTA to create a seamless flow of goods and services, may mean more companies will follow. The big question is whether these programs can be designed at costs that will induce employers and workers to pick up the coverage. “The tough thing will be keeping the product priced low enough to make it affordable, because the uninsured tend to be very low income,” said Larry Levitt, vice president for the Kaiser Family Foundation, a health policy think tank. About 35 percent of Latinos in California have no health care coverage at all, largely because they tend to work for employers that don’t offer medical plans and cannot afford to buy coverage on their own. The Health Net program, rolled out in a preferred provider organization version in October and expanded several weeks ago to include an HMO plan, is about 30 percent to 40 percent lower than comparable HMOs, the company said. Although premiums vary by age and other factors, a Salud HMO including such services as pediatrics and maternity care for a subscriber under the age of 30 costs roughly $302 per year. A comparable HMO plan costs roughly $475 a year, company officials said. Health Net is able to provide the benefits at lower cost because of synergies it hopes to achieve with its providers, including Tenet HealthSystem in Southern California and Sistemas Medicos Nacionales, S.A. de C.V. in Mexico, and because health care costs are so much lower in Mexico than the U.S. Under the HMO plan, a worker in the U.S. can enroll in an HMO here or in Mexico, where Salud’s providers include about 145 physicians and eight hospitals in the border cities of Mexicali, Tecate and Tijuana. If the worker opts for family coverage, family members can utilize the plan in Mexico or in the U.S. Only about 1,000 subscribers have enrolled in Health Net Salud so far, but company officials say they expect those numbers to climb once the HMO is rolled out to brokers. Eventually, the company hopes to add service in other Mexican cities as well. “We know a lot of Latinos who want to receive care in Mexico will go to the nearest towns,” said Ana Andrade, associate vice president of Health Net. “There is also a significant number of immigrants who have relatives in those towns.” An estimated 1.4 million people cross the border into Tijuana every year for health-related reasons, said Dr. David Hayes-Bautista, professor of medicine at UCLA and director of the school’s Center for the Study of Latino Health and Culture. “A portion are insured here, but seek service there because they want to talk to somebody.” In California, there is one Latino physician for every 2,803 Latinos, compared to one non-Latino provider for every 335 non-Latino patients, Hayes-Bautista said. With so few physicians fluent in Spanish, many Latinos grappling with chronic illness prefer to receive care in Mexico where they are more comfortable asking questions and discussing their condition and treatment options. At the same time, many heads of households cross the border leaving their families behind in Mexico. Although statistical data is hard to come by, one study found that about 27 percent of the 2 million Mexicans who migrated during a recent five-year period were heads of households who came to the U.S. alone, according to Belinda I. Reyes, a research fellow at the Public Policy Institute of California. Salud is the first major initiative Health Net has launched after several years focusing on improving profits. In 2000, Health Net, the fourth largest HMO in California by membership, saw net income rise 15 percent to $163.6 million. It was the second consecutive year in the black for Health Net, which reported losses of $165.1 million in 1998 and $187.0 million in 1997. But improving profitability required the company to prune some of its operations, and as a result, HMO membership in California declined by 4 percent to 1.3 million during 2000. “It seems to me (the large players) and especially Health Net and Pacificare have had some pretty significant financial issues for which they’ve had to retrench, and that’s taken resources away from how you expand and remain competitive,” said John M. Edelston, president of HealthPro Associates Inc., a managed care consulting firm in Westlake Village. “Now that things seem to be turned around and they’re making a profit, either they need to grow and expand and look at ways to do that or they become targets for acquisition.” If Salud succeeds, it can go a long way toward increasing Health Net’s market share, Edelston said. But while there appears to be a ready market for cross-border health care, there are also a number of obstacles. The plan is aimed at small businesses, where a large majority of Latinos are employed, but these employers have traditionally eschewed health care programs because of the cost. Only about 60 percent of California employers offer health coverage, compared to 67 percent nationally, various studies show. Among small businesses, the rate is even lower. “Latinos are more likely than Anglos to be in low-wage jobs, to be working in small firms, to be working for more than one employer in agriculture and service industries,” said Richard Kronick, associate professor in the department of family and preventive medicine at UC San Diego. “All of these (employers) are much less likely to offer health insurance.” Even when employers do offer medical plans, non-naturalized Latino workers are less likely to buy coverage. Most of those who are uninsured have incomes below 200 percent of the poverty level, or $28,000 for a family of three. The cost of living in places like Los Angeles, along with the common practice of sending money homes, depletes most of those earnings and can make even discounted health care costs prohibitive.

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