The Free Press, Mankato, MN

Local News

October 24, 2013

State workers to see cheaper rates for Mayo

Preferred One puts Mayo in cheaper tier, while Mankato Clinic gets put in costlier tier

MANKATO — It's sort of a tale of two outcomes, with one player quite happy with how things turned out, and the other, well, not so much.

With roughly 7,000 state employees in the Mankato area, they're a big target when it comes to health insurance. State employees have three insurance providers to choose from, and each provider offers a variety of plan options.

One of those providers is a company called Preferred One. And their pricing this year worked out beautifully for Mayo Clinic Health System in Mankato, and not so beautifully for the Mankato Clinic.

After the annual negotiation process, Mayo found itself bumped from a cost level of tier 4 down to a much more inexpensive tier 2. Mankato Clinic, meanwhile, found itself bumped up to tier 3 from tier 2, even though its prices went down.

Mayo says the arrangement will mean lower deductibles and copays for employees in the State Employee Group Insurance Program at Mayo Clinic Health System in Mankato facilities.

Dr. Stephen Campbell of Mayo Clinic Health System said that for many years they'd been on the costlier end of the spectrum, and therefore, have had difficulties capturing state employees.

Now that they're the only service provider in the low tier for employees choosing Preferred One, they're hoping more people choose MCHS for their primary care.

It's a complicated system, though. In fact, while MCHS is in tier 2 for Preferred One, they're in tier 4 for Blue Cross and Blue Shield. It all comes down to what kind of prices can be negotiated with an insurance company.

Take the Mankato Clinic, for example. When negotiating with Preferred One, they were given an idea of where they needed to be, cost-wise, to come in at tier 2, but it was extremely difficult for them to cut any more.

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