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Each time a new plan is written, both a new deductible and new pre-ex exclusion begins. Let�s take an example: Jane bought a 6 month STM plan, which became effective on January 1st, and which had a $1,000 deductible. In March, she injured her knee. She sought and received treatment, and submitted the claim. The total amount of the claim, $875, was applied to her deductible. So far, so good. Then, in May, she developed a kidney stone. Again, she sought and received treatment, this time to the tune of $3,500. Of course, the first $125 went to satisfy the deductible. That left a balance of $3,375, which was covered at 80%: the policy paid $2,700, and she paid the rest. Again, no problem. In June, her policy expired, but she still needed coverage. By that time, both her knee and her kidneys seemed fine. She bought another 6 month STM, and hoped that she�d soon find a job with group benefits. But here�s the thing: she may have believed that she was simply renewing the (previous) STM plan bu

Short Term Medical plans are wonderful tools, if used correctly and judiciously. For example, if you�re between jobs, and need coverage for a short and definable period of time, they�re an inexpensive alternative to COBRA. Or, you�ve started that new job, but there�s a 90 day waiting period until your new group coverage starts. Well, and STM plan will nicely fill that gap, offering protection until the group plan kicks in. Maybe you�ve recently graduated from college or tech school, and need temporary coverage during your job search. Again, if you�re pretty confident that this will be a short time, say 3 or 4 months, then STM may be just what the doctor ordered [ ed: couldn�t resist the pun, could you? ]. But there are some pretty significant downsides to these plans, as well. Recently, I had occasion to exchange emails with a nice lady in a nearby town. Her daughter is taking some time off from school (college), and is unsure about how to go about getting coverage. Her daughter�s too

�Beating government to the punch in thinning the ranks of the uninsured, a coalition of 60 large companies plans to offer voluntary health benefits to workers ineligible for employer-based coverage.� One of our industry journals, in a recent article (click here to read the whole thing), explores how a group of large employers is addressing one of the key demographics of the uninsured: workers who are ineligible for �regular group� coverage because they�re part-time, or seasonal, or even temporary (think Christmas in retail). This group also includes 1099 (contract) workers, as well. It�s estimated that there are some 3 million folks who would fall into this category, representing a pretty decent chunk of the uninsured. What�s most interesting about this plan is that the product has actually been designed to appeal to folks in this group. Instead of the typical insurance company method of just throwing in benefit after benefit, driving up the cost, and then heavily underwriting the fin

What started out as a good idea to hold down costs quickly became a nightmare for almost everyone. About 15 years ago the health care industry was introduced to a concept called Managed Care. What began as Managed Care quickly deteriorated into Mangled Care. In the �good old days� life was simple. You had basic coverage that paid $30 per day for room & board and a $400 surgical schedule. Maternity was included in almost every policy, mom was allowed to sleep through the process, she stayed in the hospital 4 days and the entire stay was less than $200. Not long after that carriers started introducing something new called �major medical�. If your basic benefits expired (after about 120 days of benefit) you could pay a $100 deductible (an enormous sum in those days) and have the rest of your medical bills paid up to the unheard of maximum of $50,000. Since no one had bills that high the $50,000 limit was considered frivolous and many opted for the more reasonable $10,000 limit. Well �

Yesterday, I promised to elucidate [ ed-Oooh! A $10 word! ] how group conversion plans work. As you may have guessed, there�s not a lot of �there, there� so this will be a brief post. In Ohio, carriers in the group market must make available a conversion plan for those who lose their jobs and are not eligible to continue their coverage under either COBRA or state continuation rules. The idea is that someone with a serious pre-existing condition may find it difficult or impossible to obtain (adequate) coverage in the individual market. As you may recall, HIPAA is rather a one-way street; that is, group plans must (generally) recognize coverage from individual plans, but the reverse is not true. Individual plans can limit or exclude coverage for pre-ex, or even decline to insure one who is seriously ill. The conversion rule requires that the carrier offer some plan, one that doesn�t exclude pre-ex. But these plans are notoriously bad deals for those who can qualify for a regular policy.

Okay, the group really didn�t go bad, but I liked the catchy headline. You may recall that I previously posted about a group that had particularly poor �participation� (�An interesting challenge�, posted 2/9/05). Because there were 13 employees, but only 5 elected coverage, it was difficult to find another carrier for the group. In the event, the employer has decided to do away with the group altogether, and to have each employee apply for individual coverage. We found a carrier that would put all these policies onto one, convenient list bill, and the employer will take care of the appropriate payroll deductions. Sounds simple, right? Would that it were so. As you�ve no doubt already guessed, we�ve had a few setbacks. Specifically, two employees (as well as a spouse) have been declined due to health issues. I�m awaiting word on the other three. Okay, so now what? How will the two employees who have been declined obtain coverage? Since there�s no COBRA issue here, then it falls to state

One last thing: In Part 2, I mentioned that there is no provision for claims to be covered after the last day of the 18th month. Here�s why that�s important: Several years ago, I had a (life) client who was on COBRA. Now, this was the proverbial guy who had never been sick a day in his life. I had spoken with him several times about coming off COBRA early, and going onto an individual plan. His stock response was �okay, okay, I�ll get to it pretty soon.� One day, about a week before the end of the 18th month, he suffered a MAJOR heart attack. His wife called, and told me the doc�s wouldn�t even operate because, and I quote, �his heart is mush.� He was in ICU, in pretty bad shape. His COBRA was thru Humana, so I called them to see how they would handle the claim after the end of the month. They replied (correctly, as I soon learned) that they wouldn�t; coverage would end at midnight on that last day. But he�d still be in ICU, racking up a hefty-sized claim. Fortunately, I knew that he w

There�s a lot of confusion about how long COBRA Continuation lasts. Generally, you can stay on COBRA until: - 18 months from date previous coverage ends, OR - 29 months if you become disabled during the first 60 days of your COBRA Continuation, OR - 36 months of you were covered under a spouse�s or parent�s plan, and the spouse or parent becomes eligible for Medicare, dies, or becomes divorced or legally separated, OR - If/when your previous employer goes out of business or drops the group plan altogether. Remember, though, that COBRA is very complicated, and that these are general guidelines only. When one elects COBRA one pays the full premium for the coverage. Since most employees only pay part of the premium while employed, it can come as quite a �sticker shock� to see the true cost of the coverage. And the employer can (and will) add a 2% �handling� or administrative fee on top of that. And the employer can charge 150% during the 11 month disability extension. Ouch! There�s one m

For some time, I�ve been trying to determine whether or not to post on the Terri Schiavo case. For those who may not be aware, Terri is a woman who has been in a (for lack of a better term) vegetative state for many years, on a feeding tube but not life support. Her husband, citing her wish not to be kept alive by articial means, has sought to have the feeding tube removed. Her parents have sought to prevent this. There is a great deal of controversy in this case. At first blush, this appears to be a �right-to-die� versus �pro-life� debate, and I have endeavored to keep overtly political issues from this blog. Due to various lawsuits, the cost of the care is apparently not an issue, and there don�t seem to be any obvious connections to insurance. So why am I posting about it? If you�ll recall, I mentioned previously that I keep a little sticker close at hand. It says: May the action that I am about to undertake be worthy of You.� Generally, this has to do with how I treat my prospects

The Consolidated Omnibus Budget Reconciliation Act of 1986, aka COBRA, was a landmark piece of legislation. One of the primary benefits of this law is that it provides for a continuation of group health coverage that otherwise might be terminated. In English, this means that, if you lose your job, you don�t necessarily lose your insurance. This is important because, if there�s an ongoing medical condition, the coverage stays in force (at least for a while). Since COBRA is law , and not insuranc e , I tend not to answer a lot of questions about it. Why? Simple, really: I am not a lawyer, and I don�t play one on TV. That means that if I advise a client � especially one of my groups � on a COBRA issue, and I�m wrong (which, believe it or not, does happen)(rarely), then I could be in big trouble. OTOH, there are times when it�s appropriate to help folks who call me determine what to do in a given circumstance. Please keep in mind that I�ll be dealing in generalities here, but hopefully in

My better half, our brother-in-law, and a dear family friend all work at a local Fortune 100 company (which shall remain nameless, unless you happen to catch �Law and Order�). Like many large employers, this one offers the option of purchasing a Long Term Care insurance plan thru the magic and convenience of payroll deduction. All three have asked me to take a look at the plan(s), and render my professional, independent, expert opinion. Such as it is. These types of plans fall into two general categories. The first requires that, in order to keep the coverage, one must remain with the employer that offered the plan in the first place. The second type lacks this requirement; the plan is �portable,� meaning that you own it regardless of where you may work. If you leave the original employer, you�ll give up the payroll deduction benefit, and have to pay the premiums directly to the carrier. But the coverage stays the same, no benefits are lost, and the premium doesn�t increase due to this

" Health care is confusing, intimidating, frustrating for everyone, and of course, it's getting more and more expensive. " No kidding. But this article focuses on an area that, until recently, hasn�t had a lot of media play: personal health care advocates. These folks will help you make sense of the bill you just got from the hospital, or help you determine whether you need a referral for that knee surgery. And the service costs just $400 a year for a family. I looked through their website , and they seem to offer a great array of these types of benefits. Basically, they become your personal HR department. I have mixed feeling about this. On the one hand, as a professional agent, I expect that my clients will call me when they have questions on their bills, or an issue about coverage. So on that level, I resent that they�re paying someone else to do my job. On the other hand, clients who use this service cease being my service problem, and I can devote more time to sales

As I mentioned the other day to 'she who must be obeyed,� I understand that Dayton just isn�t a large enough market to support two daily newspapers. Nonetheless, surely the Dayton Daily News could afford to hire a reporter (or three) who would at least make an effort to explore more than one side of a given issue. Today�s rant is in response to this (literally) incredible headline: Study: Uninsured pay more for hospital care The article, about a recent study done by the Service Employees International Union, begins by noting that a �patient without insurance coverage typically is charged more than twice as much for hospital expenses as an insured patient�� No kidding! In a related development, it was revealed that people with coupons paid less for a Taco Salad than those without. Please don�t assume that I am heartless or uncompassionate about the plight of (many of) the uninsured. But nowhere in the article will you find the terms �insurance network� or �negotiated rate.� Because

Over at California Medicine Man , several of us folks are having a mini-debate about how helpful it is for patients to research their medical conditions and treatment. I�ve long been a proponent of consumer-driven health care, which has come to mean different things to different people. In my neck of the woods, CDHC means coupling high deductible health plans with tax-advantaged savings accounts, thereby empowering the insured/patient with the financial ability to make informed health care decisions. Implicit in this concept is the idea that, once empowered, the insured/patient will want to make the most cost-efficient decision, and will seek out as much information as possible in order to do so. From where will this information come? Well, a variety of sources. First and foremost, the patient should be willing and able to ask the provider whether or not a given course of treatment is necessary, or whether there are more cost-effective measures that can be taken. Another resource would

Years ago, I used to love to watch �Family Feud.� Mostly, I wondered how many of the female contestants Richard Dawson would kiss. I suspect that, in today�s PC word, he wouldn�t even take the chance. Which brings me to a phone call I received last week. One of our carriers, with whom I�ve done business for almost 20 years, called to see why I wasn�t writing very much with them lately, and if there were things they could either do, or stop doing, which might entice me to place more of my business with them. I�m always happy to talk with carriers about these issues. For one thing, it gives me an opportunity to vent to someone at the home office. For another, I�ve become concerned lately because I�ve been putting so much business with one carrier (not the one which called), and I really value my independence. So, if I can spread a little more of the business around, I�d be happier. In any case, we discussed some of the issues which cause an agent to use Carrier A over Carrier B. Price i

In the classic Sherlock Holmes case, the great detective was able to solve the mystery by the absence of a certain behavior. In essence, he could deduce the solution because something didn�t happen. In real life, we don�t always have that luxury. Case in point is this story from the Dayton Daily News : �More than one-third of Montgomery County's employees in the Anthem health-insurance network switched their coverage to UnitedHealthcare last month� Another employer with significant migration from Anthem to United was Children's Medical Center. About 200 employees there shifted during last year's normal open enrollment.� While these may seem to be pretty substantial defections, the numbers themselves are pretty meaningless. Why? Well, two reasons. First, it�s a pretty poorly-kept secret that between them, Anthem and United pretty much �own� the Dayton market. There�s a joke among most of the agent/broker community that there exists a secret tunnel between the two 800# goril

In Part I, we discussed the first three major areas of HB and SB 5. In this post, we�ll explore the other two areas under consideration. To refresh your memory, these would be: - Health care providers would be required to provide consumers advanced notice of health care services costs - Proposes an analysis of a high-risk pool as a health insurance option for uninsured Ohioans, and further analysis of how to increase participation in small employer purchasing alliances. The first item is interesting. According to my friend Bob in Hotlanta, this is being proposed in Georgia, as well: SB83 would �require hospitals and medical facilities to provide estimates of charges to patients.� I�m kinda ambivalent about this. On the one hand, when I walk into McDonald�s, there�s a sign that tells me how much that Big Mac is going to cost. So how come I can�t walk into my doc�s office and get the same thing? Well, for one thing, everyone pays the same amount for a Big Mac; i.e. there�s no �Burger N

House and Senate Bills 5 may blow some much-needed fresh air into the Ohio small group market. Among the proposed changes: - New �Flexible Health Benefit Plans� would be created for small business employers - Availability of health savings accounts (HSA) would be increased by encouraging more HMO participation - Would allow HSA products to be reinsured through a state operated reinsurance program - Health care providers would be required to provide consumers advanced notice of health care services costs - Proposes an analysis of a high-risk pool as a health insurance option for uninsured Ohioans, and further analysis of how to increase participation in small employer purchasing alliances. This post will examine the first three items on that list. I�ll cover the other two in a separate post. I do see the overall plan as a welcome change from �business as usual.� The first two items merge well with the drive toward more consumer driven health care. The Flex Health plans envision a major