IBM plan stresses preventive health care Essay

Increasing employer efforts to moderate the cost of providing
health care for employees was reflected in International Business
Machines Corp.’s (IBM) adoption of a new plan stressing preventive
medicine and less costly alternatives to traditional care. A company
spokesman said that IBM spends about $500 million a year for health care
for its 220,000 domestic employees and that the new approach was
expected to reduce the annual rate of cost increase to 10 percent, from
15.



Provisions of the new plan include:

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* A $200 a year personal health account to help employees pay for
prenatal tests, immunizations, infant care, eye glasses, and other
services not covered by the health insurance. Costs are reimbused at 80
percent, meaning that the costs must total $250 in a year before the
employee receives the full $200.



* Cost controls requiring employees to now pay 40 percent of the
first day’s charge for use of a hospital room and 20 percent of the
cost of elective surgery performed without a second opinion. Also, the
$150 annual deductible, which previously applied to all employees, was
raised to 0.3 percent of annual salary for those earning more than
$50,000 a year.



In other changes, health insurance was extended to provide full
coverage of up to 50 home care visits by licensed professionals and
reimbursement for birthing center services. Dental care rates will now
vary according to the cost of living in the region where the employee
resides, lifetime coverage was raised to $7,500 per person, from $5,000,
and the maximum benefits for orthodontics was raised to $1,100, from
$900.

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