Telling Retirees They Must Switch to HMOs (Negative Message)

Your company has traditionally provided health insurance not only to employees but also to retirees who have worked for the company for at least 20 years at the time of retirement.

Seven years ago, your company cut costs by switching current employees from open-ended health insurance to health maintenance organizations (HMOs). At that time, the company kept open-ended insurance for retirees because research indicated that retirees wanted to keep their current doctors, which they might not be able to do with HMOs. But the high cost of the open-ended insurance program gives the company no choice: to continue to insure retirees, your company must hold down costs, and HMOs offer the best way of doing that.

Under the open-ended plan, the retiree pays 20% of all costs (up to a yearly ceiling of $10,000 and a lifetime ceiling of $100,000) and the company pays 80%. In an HMO, more costs will be covered for the patient. Routine doctors' visits, for example, charge only a $10 co-payment. Most tests, such as mammograms, X-rays, and blood work, are covered 100%. Hospitalization is covered completely, and there's much less paperwork. By presenting their insurance card when filling a prescription, patients pay only the co-payment, rather than having to pay the entire amount and then filing for a partial reimbursement later.

The bad news for retirees is that they have to go to a physician listed with the HMO. If their current physician is not on the list, retirees will have to switch doctors to retain benefits. Furthermore, the primary care physician must refer the patient to any other health care providers. That is, someone who wants to see a specialist or go to the emergency room must call the primary care physician first. Primary care physicians always approve such referrals whenever they seem medically advisable, but the requirement does limit the patient's freedom. Further, since HMO physicians are paid a flat fee, some people fear that they will be reluctant to prescribe expensive treatments (which might cost more than the fee), even when those treatments are essential.

Your company offers a choice of HMOs. Informational meetings will be held next month for retirees (and anyone else who wishes to attend) to explain the various options.

As Vice President for Human Resources, you must write a form letter to all retirees, explaining the change and telling them how to indicate which HMO they prefer. Enclosed with each letter will be a postcard listing the plan options. Retirees must return the postcard within two months, indicating which plan they have chosen. Anyone who does not return a postcard will be assigned to an HMO by the company.

You should make up a name and address for a sample recipient. You can either make up a return address for your organization or provide an actual address.

Hints:

It is up to you to decide what organization you work for. Ideally you should pick an organization you know something about. When writing your letter, consider the following questions about your audience: About how many retirees do you have? What percentage are under 80, in reasonably good health? What percentage are 80 and over, sometimes with more serious health problems? How well educated are your retirees? How easy will it be for them to understand the HMO options? What times would be convenient for the retirees to come to meetings?

Make sure your information is presented clearly and organized in a reader-friendly way.

When possible, use reader benefits and positive emphasis without being misleading about negatives.