Friday, February 29, 2008

the case against universal health care

Brian Schwartz of the Hawaii Reporter makes a great point about universal health care at http://www.hawaiireporter.com/story.aspx?4904d58c-6296-45df-83ea-73b0b3f13f98 .

We echo the point that adapting the concept of universal health care is not a panacea for our problems. We will likely need to be reminded that covering the cost of our care and ensuring the quality of coverage available are much bigger problem issues than availability of coverage. Unfortunately these are the weaknesses of the universal coverage model.

state laws limit acces to affordable short term insurance

Many people are surprised to learn that some states have laws that restrict citizens access to affordable short term medical insurance. Ten states have laws that restrict the use of short term medical insurance and four states (New York, New Jersey, and Vermont) do not allow short term medical insurance at all.

California, Colorado, Connecticut, Idaho, Maine, Maryland, Michigan, Minnesota, New Hampshire, and North Dakota all have laws that require a person to go without coverage for a period of time ranging from one day to six months before they are eligible for a subsequent policy. The intent was to push people into more expensive renewable coverage, but this option is neither appropriate nor available to everyone.

See more detail on the restrictions at http://short-term-medical-insurance.com/press%20releases/how-long-can-I-use-short-term-medical-insurance.htm

We support the right of all people, regardless of their state of residence, to have the freedom to choose the insurance they think best suits their individual needs.

Thursday, February 28, 2008

Short term medical insurance enrollment trends

Peak months for short term medical insurance enrollments are May, September and December. May and September enrollments are attributable to college students and December is attributable to changes in employer-sponsored group insurance plans that usually run on a calendar year basis.

The next busiest time for enrollments, especially online, is Thanksgiving. The reason is not clear. Some industry people speculate that this is an opportunity for some families get to deal with lack of health insurance issues for their college-age or young adult children. An article titled "Thanksgiving Health Insurance Ritual for College Students" describes this phenomenon.

Most enrollments take place in the first and last week of each month.

Monday, February 25, 2008

health insurance for young adults

Young adults often have little relevant consumer education at the time they need to buy their first health insurance policy. A new series of articles for young adults will be published here this month that addresses the young adult market. The first article published at
http://www.short-term-medical-insurance.com/press%20releases/Primer-on-health-insurance-shopping.htm covers four key points when shopping for health insurance. The articles are written in a jargon-free "down to earth" tone specifically geared for this age group of consumers. The articles take the unique approach of including what the reader needs to know rather than what they want to hear, as is so common in many popular financial media publications.

Friday, February 22, 2008

short term life and dental insurance

When changing from a group health plan to individual short term medical insurance, many people consider providing temporary replacements for their group life insurance and group medical plans. The problem is that while medical insurance provides significant immediate value, the value of dental and life insurance plans accrue over time. In other words, if we were to calculate the real benefits of a life insurance or dental coverage, it would be more 12 months after the policy started that it is today. A significant part of the price of the insurance reflects the benefits that will accrue in future years rather than immediately. This is sharply different than short term medical insurance. For this and other business reasons, there is no insurance product called “short term life insurance” or “short term dental insurance”. Of course you could use regular dental insurance and life insurance, but if the intent s to use them of only a short time then the consumer is effectively overpaying for the coverage that they need.

A better approach is to consider the use of supplemental life and dental insurance that can overlap the period without group coverage and continue in force to provide additional benefits even after new group insurance is in place. These policies are made to overlap and pay benefits in addition to any other insurance.

Fortunately it is easy now to get immediate supplemental life and dental insurance online. A company called Guarantee Trust Life Insurance issues up to $250,000 term life insurance coverage to most people with an online application and no medical exam. A new group of innovative individual dental plans for 2008 like Secure DeltalOne from Health Plan Administrators Inc. offer more coverage options and more reasonable prices than dental plans of the past. The best part is that these insurance plans, even in combination, are only a fraction of the price of the short term medical insurance so they won’t break the insurance budget. In the end, this approach provides the best value in immediate protection as well as making a wider range of coverage options available for the future.

Thursday, February 21, 2008

Less coverage is the answer

When politicians like Senator Obama talk about providing top quality health coverage to everyone, little is said about the cost. Obama’s plan may be the most costly idea of all the proposals. His specific plan is to offer the same health benefits that members of Congress have now to everyone in the U.S. on a universal basis! A consensus of economic opinion is that would cost about 40% of our GNP or, in other words, 40 cents out of every dollar we see would be allocated to provide this type of universal health care. Let’s assume for the sake of discussion that this estimate is much to high and that we could really get the job done for 33% of GNP. The next logical step is to ask how many families or businesses are willing to spend a third of their gross income on health care? That means that average healthcare costs for a household with $60,000 total income would be $1,500 per month. We would see very few takers for this plan and, ultimately, is why these politically ideal plans will not be successful.

So what is the answer? Simply provide less health coverage. Even if we cannot provide the absolute highest level of health care to everyone in our nation, we certainly can provide solid fundamental care across the board at a fraction of the cost.

It is no coincidence that low cost limited benefit insurance plans are gaining in popularity. Secure Lite Short Term Medical, for example, provides coverage with any doctor or hospital but adds the words “up to $xxx” for each type of covered medical treatment. The coverage lasts up to 12 months. By simply limiting the coverage to a to a reasonable length of time and dollar amount that covers most but not all of the possible bills, we can provide health insurance coverage to most people at a reasonable cost. It is not rocket science but is an answer that works for most people most of the time. Sure, this is not a perfect solution in an ideal world, but it works well here and now and this option is available immediately while we continue to debate other political options!

Wednesday, February 20, 2008

Pricing health insurance to reward healthy behaviors

A well-written post by Eric H. Schultz, president and CEO of Fallon Community Health Plan in Boston at http://www.wbur.org/weblogs/commonhealth/?p=376 asks the question "Can — and should — health insurance be a positive agent for driving healthier living and producing better outcomes?". This wotic of often considerer on this Blog, since our health plans at http://www.short-term-medical-insurance.com/ have been financially rewarding healthier applicants for decades. Short term medical insurance (STM) is not even available to those with serious ongoing medical conditions. The intent is not to make social change but rather to effectively manage costs both to the insurer and ultimaely to the consumer. We know that that there is an acceptable way to use tiered pricing of health plans (as with STM policies) and unacceptable ways that have failed at other health plans (see a recent example in an earlier post this month). Yet despite the pricing differences th have existed for decades, there is no indication that tiered pricing in the individual insurance market has any social effects. This is likely due to the low market share of this coverage and the fact that the majority of people are covered by group health plans. While we admire the intent, we are yet unconvinced that tiered pricing in group health plans will ever be widely accepted on a legal or social basis.

Tuesday, February 19, 2008

Canadian Values Won't Work Here

This week public television aired an interview with President and Chief Executive Officer of Standard Life Assurance Company of Canada Joseph Iannicelli. His company is a major provider of financial services and employee benefits to Canadians. Mr. Iannicelli argued the point that leaders are born, not made. He admitted that courses and training in leadership can have some effect but that the leadership genes are either there or they are not. I personally found the idea repulsive from a values-based perspective.

Fortunately for us, almost all American business leaders would strongly disagree with Mr. Iannicelli. In fact our business and economic model is based on the premise of developing leadership within the ordinary gene pool of that group we call our employees. We believe in individual ingenuity and the power of each individual to aspire to the greatest potential to which they may be able to achieve. When we work our way to the front of the line, no one tells us “sorry that’s all there is; this is the end of the line”.

It struck me that this interview was an example of why the fundamental Canadian systems of business management of business management do not work here in the United States and why their health care system would be equally objectionable. It is not our point to get into a discussion of sociology, but it seems obvious that anyone who wants to avoid a Hillary Clinton style disaster in a proposal to reform our health care system must pay attention to the fundamental differences in beliefs between Americans and those people around the world who have adapted to a universal health care system. I just can’t see us accepting it, and I hope we never do. It would be a great defeat for the American free spirit.

Whether managing a business or managing a national health care system, one method that will not work is to say “you just don’t have what it takes”. I am proud that our health insurance plans allow a patient to pursue the best course of treatment with any provider anywhere in the country without a limit on cost or the probable outcome based on my genetic makeup.

In short, I am glad that neither my career nor my heath care are managed based on factors outside my personal control.

Monday, February 18, 2008

The Value of a Certificate if Creditable Coverage (Part 2)

If the value of a short term medical insurance lies primarily in the certificate of creditable coverage that is included as a legal requirement as part of all STM policies, then doesn't it make sense to buy the least expensive highest deductible minimal benefit STM that we can find. Probably not; but the explanation for this type of thinking lies more in the psychological realm than in mathematics.

In the example used in part one it was easy to calculate a tangible value of the STM policy into tens thousands of dollars. But this example is not common of the way insurance usually works. The primary benefit of insurance is for the intangible or unexpected costs. When we compare a tangible known cost (like the knee surgery in the example) with an intangible unpredictable medical cost, the latter fades in comparison.

Our mind naturally values the tangible cost much more than the intangible. Yet the intangible risks remain the same as before. In other words the value of insurance is based on a factor completely unrelated to the assumed knee problem. Remember that the STM policy is not paying for the knee procedure and its cost is based only on the possibility of unexpected and unpredictable expenses.

The human brain automatically enlarges the value of the tangible and diminishes the value of the intangible. Some neurologists link this behavior with a pre-historic survival wiring built into our brain. In a life or death situation, it makes no sense to weigh the cost of an intangible future event if we don't live past today to see the benefit of our "wise" decision based on logic and probability. If we relied solely on logic, the decision of the best STM should be made independently of the knee issue. Obviously the insurance has value other than the value of the Certificate. Yet scores of examples show us those individuals facing the need to obtain a Certificate of Continued Coverage shop for only the least expensive short term medical insurance. Not logical, but perfectly normal considering the neurological makeup of our human brain.

The Value of a Certificate if Creditable Coverage (Part 1)

Often the most valuable feature of short term medical insurance is the Certificate of Creditable Coverage that is automatically issued by law at the termination of every STM policy. Under federal law, every employer provided policy must cover the pre-existing conditions of a new enrollee who has proof of continuous coverage in the form of a Certificate of Creditable Coverage. This simple piece of paper can be worth thousands of dollars and could easily mean the difference between financial survival and financial ruin for many people.

Take the fairly common example of a healthy active middle-aged weekend warrior type of guy who needs orthopedic knee surgery. His old sports injuries are causing increasing pain and he hopes to schedule an arthroscopic procedure as soon as possible. He suddenly changes employment for any reason; or perhaps his spouse who carries medical insurance for the couple changes her employment. In either case, any new group health insurance plan has a waiting period before benefits can begin so there is risk that the proposed surgery will not be covered. Going ahead with the treatment could be disastrous; the cost for even a simple knee procedure is likely over $20,000. If there is a gap in employment between jobs, the waiting period without coverage will be longer. If the gap in coverage is longer than 62 days then we are just out of luck - there is no benefit provided by either the old or new health insurance company for the pre-existing condition. The new waiting period where treatment could not be covered could range from six months to several years.

But the solution is easy - if he carries short term medical insurance, his knee surgery can be covered from the first day of his new group coverage. In fact, the trend is to schedule this surgery on a Thursday or Friday and be back in work by the following Monday.

In other words, the simple solution of taking an STM policy at a cost of a few hundred dollars gives this fellow in our example a financial benefit of tens of thousands of dollars. In this example, it is easy to place the tangible value of the policy almost exclusively on the Certificate of Creditable Coverage.

Saturday, February 16, 2008

lowest price short term medical insurance

An insurance company would not be expected to have the lowest priced policy in one type of medical insurance and also have a reputation for the highest quality most comprehensive coverage in another medical in another type of medical insurance. Lowest price and highest quality normally do not go together in combination for any type of product. But that is what a growing number of online shoppers are finding at Celtic Insurance (www.celticenrollment.com). Celtic Insurance has long been considered the highest quality coverage for long term individual and family coverage, especially for high deductible plans like Health Savings Accounts (HSA). But now the company is growing in popularity due primarily to price. The short term coverage does not have the same reputation for best quality of coverage but for short term medical coverage price is more often a buyer’s primary consideration.

Rates for a specific type of coverage are based on three factors: age, sex, and location. Of course rates are also affected by the coverage selected including policy deductible and level of co-payment. There is no assurance that rates for short term medical insurance are set in the same pattern as long term renewable coverage. As a result, it is possible that Celtic could be the lowest priced coverage for one person and not another.

Thursday, February 14, 2008

Secure STM administrator cited for excellent customer service

One of the nation’s best short term medical insurance administrators SASid was cited in a new book called “Results That Last”. The book shows business managers how to build excellence into their organization, specifically focusing on how a manager can ensure that a business provides consistently great customer service experience for its clients. A letter from one satisfied insurance client is reproduced in the book. It is interesting to not that the praise is expressed not for any heroic effort by SASid, but rather because the company consistently provided meaningful responses whenever he called SASid with a question about his policy!

SASid administers several of the nation’s most popular short term medical insurance policies like Secure STM and Secure 12x3 STM at http://www.short-term-medical-insurance.com/.

Wednesday, February 13, 2008

Cuomo misques on medical consumer protection

Today the New York attorney general Andrew Cuomo announced plans to sue UnitedHealth Group Inc. as part of an investigation into the way the health-insurance industry sets payment rates for hospitals and doctors outside of their networks. Sixteen of the nation’s largest health insurers, including Aetna Inc., Cigna Corp. and Wellpoint Inc.'s Empire Blue Cross Blue Shield unit.

Mr. Cuomo said that he believes that the reduced payments for out-of-network doctors and hospitals are part of an “industry-wide scheme perpetrated by some of the nation's largest health insurance companies to defraud consumers”.

Consumer advocates traditionally take the opposite stance and consider preferred provider networks to be a positive force promoting medical prices in an otherwise unregulated medical pricing system. Members of the health insurance industry responded by saying that Mr. Cuomo misunderstands how doctors and hospitals charge out-of-network providers and believe that the suit is largely a publicity stunt by the attorney general. Without the medical cost database maintained by Medicare and insurance industry PPO organizations, consumers would have no idea of the conventional price of a specific medical service.

The insurance industry’s position is backed by the fact that even the lowest out-of-network provided are higher than the amounts paid by the government Medicare system – the largest health care payer. By comparison, the insurance PPO payments are generous to providers and consumers.

Fortunately the short term medical insurance industry sidesteps the PPO issue entirely. Payments are the same regardless of a provider’s network affiliation. All of the plans at http://www.short-term-medical-insurance.com/ provide coverage at the usual and customary rate for each geographical market area in the United States.

Regardless of whether using a short term medical insurance or a regular medical insurance policy, patients should always ask whether their medical provider will accept their insurance as full payment after the patient pays the cash deductible. When this issue is addressed in advance of treatment, all risks are avoided.

If Mr. Cuomo really wants to help protect consumers, it would be far more effective to endorse a simple law requiring medical service providers to accept the reasonable and customary charge for a service as determined by private PPO systems. This provision has already been part of the Medicare system for years. Experience proves that this simple provision does not adversely affect the care or finances of patients.

Improve policyholder satisfaction with better communication

When a short term medical insurance customer is unhappy, it is usually due to a lack of coordination and poor communication between the policyholder and a service provider within the insurance company or in the health care field. Improving customer satisfaction is really about reducing anxiety. After all, no one will ever be thrilled with the prospect of receiving and paying for their heatth care. But we must focus on reducing unnecessary policyholder anxiety and avoid larger problems through clear communications.

When a claim is not processed, for example, the most likely cause is that no one submitted the clam to the insurer. The policyholder assumed that that the doctor's office submitted the bill; the doctor's office holds that it is the patient's responsibility. No one gets paid and both are frustrated. This scenario describes about four out of every five claims problems.

Another common issue is when a policyholder wants to know in advance if a proposed medical service will be covered under the policy: the insurance company says they will not comment on a theoretical claim until they can review the facts and medical records. The doctor says they do not know if the claim is covered but they will submit it and find out (passing blame on the insurer and the financial risk to the insured). Both parties prefer to "hope" tht the treatment will be covered rather than take responsibility for making the determination on their own. No one takes the time to say "Based on your description of the situation, this procedure is a treatment for a pre-existing medical condition that is not covered by your policy. We need to discuss alternate methods of paying for the treatment proposed".

OnlineAdviser service at MedSave.com provides this type of bridging that can help connect the missing communications between service providers. As a provider of advice only, the focus of this service is on clear communications that can help reduce problems for policyholders and medical providers over the long term. This service has addressed an estimated 50,000 consumer questions about short term medical insurance worldwide over a period of more than a decade. As a result, MedSave.com has become one of the most trusted sources of short term medical insurance in the U.S. and the enrollment support endorsed by http://www.short-term-medical-insurance.com/.

Tuesday, February 12, 2008

lesson learned from a failed wellness program

Insurance companies consider obvious health indicator factors like smoking, obesity, and cholesterol when setting health insurance premiums. There is little question that these factors are closely linked with long term health costs so this is a sound actuarial practice when utilized in the right context balancing individual privacy and behavioral management skills. Estimated costs for these risk factors are built into our individual health insurance premiums whether we know it or not. Federal law now allows employers to build behavioral health factors into group health plans as part of a wellness program.

When one company tried to incorporate these cost factors to an employee wellness program, they went about it the wrong way. A news article describes the story of one employer, a heath care company, that proposed charging higher premiums for those with higher behavior risk factors. Employees strongly objected and the plan was dropped. Instead the employer now offers discounts for those who meet behavioral health goals like quitting smoking or lowering cholesterol.It is interesting that the net financial result is the same, yet one approach is palatable and the other clearly is not. Consider this example as a lesson for employee benefits planners.

By charging the same price for all similar state/age/sex applicants regardless of behavioral health factors, short term medical insurance premiums actually favor those with health risks. Yet the system is simple and draws little objection, partly because the premium rates are so low that cost pressures are not as significant as in other health plans.

Monday, February 11, 2008

health care planning for early retirees

What is the best approach to health care planning for early retirees?

A Cigna executive published a white paper at http://cigna.tekgroup.com/images/56/The%20New%20Health%20Care%20Gap.pdf that basically says that planning for health care for a surge of baby boomer early retirees is a serious matter and that employers and the insurance industry have not yet responded.

It seems that good health care planning under the ideal circumstance could cost a client $10,000 to $20,000 a year less than poor planning in an unfortunate circumstance, so this could be a "make or break" issue for cleints considering early retirement.

Under the best case, an applicant within three years of Medicare eligibility could use a 12 month x 3 year renewable short term medical insurance. This would give the most liberal coverage at the lowest price if pre-existing medical conditions are not an issue. Unfortunately this type of extended coverage is only available in about half of the states. The list is included in the review article at http://medsave.com/articles/Review-of-Secure-12x3-STM.htm. This coverage would typically be priced well under $1000 per month for a typical couple at age 62-64.

At the worst case, in some states with highly regulated individual insurance like New Jersey the same coverage could cost several times more, perhaps more than $3,000 per month.