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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...