Cross Border Health Care Plans

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Abstract

California is currently experiencing rapid growth in the number of insurers and employers offering cross-border health plans to Mexican workers and immigrants, particularly in San Diego. Similar to traditional health insurance, a U.S. employer offers the plan to employees, typically as one of several choices. Employees receive information on the network of physicians and medical centers available in border areas. When they need care, employees and their family see a provider in Mexico.

Purpose of health policy or idea

Cross-border health plans meet three objectives:  (1) they satisfy Mexican workers' demands for culturally-appropriate health care; (2) they lower employee turnover rates; and (3) they lower insurers' and employers' health care costs. Insurers, employers, and workers all benefit from lower health insurance premiums that are a direct result of cheaper health care services available in Mexico.  Cross-border plans also make it possible for immigrant workers' families to obtain health care services in their home country.

Type of incentives

Cross-border health plans have financial and non-financial incentives. Financially, they have the effect of lowering costs associated with premiums, reimbursement for health care services, and employee turnover.  Non-financial incentives include higher employee satisfaction rates and productivity.

Groups affected

Payers (insurers), the private sector (employers), government, consumers/patients (Mexican immigrants and their families)

Degree of Innovation	traditional		innovative
Degree of Controversy	consensual		highly controversial
Structural or Systemic Impact	marginal		fundamental
Public Visibility	very low		very high
Transferability	strongly system-dependent		system-neutral

Political and economic background

There was a change in government direction in 1998 , when the state of California first passed legislation allowing HMOs to offer cross-border health care plans.  Recently, increased Mexican immigration to the United States and rising health care costs in the U.S. have provided insurers and employers with additional incentives to provide and expand cross-border health plans.

Purpose and process analysis

Current Process Stages

	Idea	Pilot	Policy Paper	Legislation	Implementation	Evaluation	Change
Implemented in this survey?

Origins of health policy idea

Cross-border plans have been available for decades, primarily through agricultural associations like the Western Growers Association and United Agribusiness League. It wasn't until California passed legislation in 1998 and 1999 legalizing and regulating the cross-border HMOs that the plans became more commercially available and popular among employers.  Three companies now sell such plans: Blue Shield of California, Health Net of California and SIMNSA, a Mexico-based company. The Blue Cross and Health Net plans are available to U.S. or Mexican citizens who want to obtain care in Mexico, while SIMNSA sells only to Mexican citizens. Companies from the Hotel del Coronado to National Steel and Shipbuilding Co. offer employees the plans.  Cross-border health plan availability is concentrated in San Diego.

Initiators of idea/main actors

• Government: The California state government has been supportive of cross-border plans. In 1989, the California legislature passed laws allowing for their development. Today, regulators at the California state Department of Managed Care say they have received very few complaints from consumers about cross-border health plans, or the quality of health care provided in Mexican border towns.

• Payers: Insurers are very supportive of cross border plans - they are the driving force behind them.

• Patients, Consumers: Mexican immigrants have embraced cross-border plans, and have strongly influenced these plans' development by insurers and employers

• Private Sector or Industry: Employers are also very supportive of cross border plans, and have been looking for ways to expand the number and types of services offered to immigrant workers.

Approach of idea

The approach of the idea is described as:
renewed: Cross-border plans have been in existence for a long time. Employers and insurers have only recently begun to expand them.

Stakeholder positions

The prevalence of cross-border services is unique to San Diego, but health plans say that based on the popularity there, they are considering expanding their services. SIMNSA would like to offer similar services in Texas or Arizona. Blue Shield of California's Access Baja plan has more than doubled its membership and says it would like to expand services to provide care for members in other parts of the state and services in other parts of Mexico. And Health Net of California said that based on its success, it plans to expand its services, such as selling plans directly to individuals. "I think we will see down the line a common set of standards that will apply to California and Mexico and make everyone feel more comfortable," said Ana Andrade, vice president of Latino programs Health Net of California. "We tend to see the border as a barrier. The border in this case is a bridge to care."

Actors and positions

Government
California state legislature	very supportive		strongly opposed
CA Department of Managed Care	very supportive		strongly opposed
Payers
Blue Shield of California	very supportive		strongly opposed
Health Net of California	very supportive		strongly opposed
SIMNSA	very supportive		strongly opposed
Patients, Consumers
Mexican immigrants	very supportive		strongly opposed
Private Sector or Industry
Hotel de Coronado (San Diego)	very supportive		strongly opposed
BAE Systems Ship Repair	very supportive		strongly opposed
National Steel and Shipbuilding Co.	very supportive		strongly opposed

Influences in policy making and legislation

Legislation permitting cross-border plans was passed in 1998 - it has not been modified or changed since that time.

Actors and influence

Government
California state legislature	very strong		none
CA Department of Managed Care	very strong		none
Payers
Blue Shield of California	very strong		none
Health Net of California	very strong		none
SIMNSA	very strong		none
Patients, Consumers
Mexican immigrants	very strong		none
Private Sector or Industry
Hotel de Coronado (San Diego)	very strong		none
BAE Systems Ship Repair	very strong		none
National Steel and Shipbuilding Co.	very strong		none

Positions and Influences at a glance

Adoption and implementation

To date, there has been no opposition to cross-border health plans.  Expansion of these plans will depend on insurers' and employers' continued desire to meet the health care demands of Mexican workers.  It will also depend on the price of health care services in the U.S. versus Mexico.

Monitoring and evaluation

California law does not hold Mexican health care providers to the same standards as California providers. The plans require that physicians be licensed in Mexico and meet any specialty board requirements. The companies regularly audit the services, and patients can make complaints through California regulators.   The California Department of Managed Health Care said it receives few complaints about the plans.  

"What I've noticed since 1992 is the tremendous improvement in the capability and modern aspect of the equipment and facilities in Tijuana," said Tom Fawcett, director of human relations for National Steel and Shipbuilding Co., which provides a cross-border option for its employees. "It's comparable to what you'd find facility-wise here."

Some health plans said that by requiring a high standard of care from their providers, they've raised the standard of acceptable care in Mexico. Additionally, the cross-border plans are providing coverage for many Mexican citizens who did not have coverage, namely Mexicans who work in the U.S.

Review mechanisms

Final evaluation (internal), Final evaluation (external)

Dimensions of evaluation

Process

Results of evaluation

According to employers, insurers, and the California Department of Managed Care, there have been few complaints about cross-border health plans.  A formal evaluation of cross-border health plans has yet to be conducted, however.

Expected outcome

Cross-border health plans have successfully lowered health care premiums for employers and workers.  They have also lowered reimbursement costs for insurers.   Acess has been improved, and the quality of care has been improved in Mexican border towns as well.

Impact of this policy

Quality of Health Care Services	marginal		fundamental
Level of Equity	system less equitable		system more equitable
Cost Efficiency	very low		very high

References

Sources of Information

· California Health Line: "More California Employers Offering Cross-Border Health Plans." October 18, 2005.  At www.californiahealthline.org.

· The San Diego Union Tribune: "Cross-Border Health Insurance is a Hit with Insurers and Workers." October 16, 2005.

Author/s and/or contributors to this survey

Anke Therese Schulz (UCSF) and Carol Medlin (Institute for Global Health, UC Berkeley and UCSF)

Suggested citation for this online article

Anke Therese Schulz (UCSF) and Carol Medlin (Institute for Global Health, UC Berkeley and UCSF). "Cross Border Health Care Plans". Health Policy Monitor, April 6, 2007. Available at http://www.hpm.org/survey/us/d7/4