In the California small group health insurance market Health Net’s HMO plans are always well priced. Effective August 1, 2009 for groups located in Los Angeles their Elect Open Access HMO plan will be 5 percent less expensive than the Health Net Standard Option HMO.

The Standard and the Elect Open Access (EOA) plans have exactly the same benefits in terms of doctor office visit charges, hospitalization charges and prescription medicine benefits. In fact, the EOA plans have the additional benefit of allowing members to self-refer to any Health Net PPO provider for a consultation. The member pays $15 more than the primary care doctor office visit when seeing a PPO provider, but the member has the freedom to access this care.

So, the obvious question is how can the plan that allows access to PPO doctors for consultations cost less than the standard HMO? More benefits (almost)always means higher cost. There are two reasons the EOA plan costs less than the Standard HMO in Los Angeles:

1) Health Net filed the plan as a “POS” or Point-Of-Service plan which allows some cost sharing with the medical groups. This results in lower payments or “capitation” to the medical groups. The medical groups share in money from a reserve fund set aside to cover the out-of-network PPO services. If few people see PPO doctors for consultations part of the left over money goes back to the medical group and to Health Net. The members also benefit because they’ve paid a lower premium.

2) UCLA Medical Center does not participate in the Elect Open Access plan. UCLA Medical Center is a high-cost facility and apparently refused to accept the lower reimbursement rates.

So, if your Los Angeles based small business (2 – 50 employees) doesn’t need to use UCLA Medical Center and you want a rich benefit HMO, Health Net’s Elect Open Access HMO may be a very good choice. Click here to get a California Small Group Health Insurance Quote.