To say there is a healthcare crisis is indeed an understatement!
We can't turn on a radio, a television, or pick up a newspaper without hearing, seeing, or reading about the nearly fifty million uninsured people in America! We don't have to go through all the statistics here. After all, you probably already know them.
What's amazing is that, of the FIFTY MILLION uninsured people, approximately HALF of them ACTUALLY HAVE JOBS!
It is no secret that the COST of health insurance is in an inflationary spiral! Trying to maintain employee benefits is creating a serious dilemma for companies across the country. The actual EFFORT to CONTROL these costs is directly affecting ACCESS to health insurance for many of their workers.
It seems this situation has created two SUBCLASSES of employees.
The FIRST subclass, we'll call the "working UNINSURED." These are primarily made up of people who don't work full time, and therefore CANNOT QUALIFY for their employer's health insurance plan, if there is one. However, these are not ONLY the part-time or seasonal workers. They also include the growing number of full-time employees who simply CANNOT AFFORD their share of the cost even though they are eligible! "Qualifying" for the plan doesn't mean much if it is financially out of reach! After all, if a person can't afford the premium, all the insurance in the world is useless!
But, let us not forget the SECOND subclass: the "working UNDER INSURED." To keep healthcare costs "affordable," companies have to raise the deductibles and co-insurance, and often increase the employee's contribution to the plan. This results in an INCREASE of the employees' OUT OF POCKET EXPENSE including PREMIUMS and the AMOUNT THEY MUST SPEND before the plan "kicks in," creating UNDER INSURANCE.
While some people can manage to "pay more" and "get less," others are often FORCED into the ranks of the FIRST subclass!
Often whenever there is a problem--or a solution for that matter--we can always "follow the money!" It all boils down to COST! Pure and Simple!
The number of employers that offer health insurance has dropped 3% in the last three years alone! This situation creates an immediate need for new solutions.
Enter: Limited Benefit Plans!
This is the reason the new category of health insurance, known as Limited Benefit Plans, has grown dramatically in popularity for the last few years now reaching over 1,000,000 enrollees--becoming the one of the fastest growing sectors in the health insurance market.
However, there seems to be much controversy about these new plans. Opponents complain, correctly, that since they are "limited" in nature, they won't help much if the insured suffers a catastrophic illness. Proponents point out that these plans were not designed to provide catastrophic coverage, but only the basics, and that it beats having no insurance. (As my Dad has always said, "Half a loaf of bread is better than no bread at all.")
Given the option, lower wage workers are more interested in something that covers basic expenses. Realizing this, numerous industries nationwide like major retail chains, hospitals, nursing homes, food service, hospitality, and transportation are making Limited Benefit Plans available to their employees and setting the pace! Not only have they discovered a way to provide benefits to more of their employees--at lower cost--but also are reaping benefits themselves. Better employee attraction and retention is a logical "by-product" of a better benefit plan! (Who would'a thunk it?)
An Over-Simplification!
When most people think of Limited Benefit Plans, they automatically just lump them together under one term or another. They usually call them "mini-meds," not realizing that a mini-med is only ONE of the types available. There is ANOTHER! I think a quick study of both types, and how they differ, is in order. Please understand at the outset that NEITHER of these plans ARE MAJOR MEDICAL PLANS and ARE NOT A SUBSTITUTE for Comprehensive Major Medical insurance! The benefits won't last very long in the event of a serious illness or accident. This fact needs to be well communicated to any employee who is considering enrolling. We'll discuss the communication challenge a little farther along.
Limited Benefit Plans come in TWO FLAVORS! Plain Vanilla and Neapolitan!
There are two types of Limited Benefit Plans: The Mini-Medical or "mini-med" is one, and the "fixed benefit" or "indemnity" plan is the other.
A Mini-med Plan can be thought of as a "miniature" medical plan as compared to a "major" medical plan. The mini-med has many of the same "components" as the major medical including annual maximums, deductibles, and co-insurance. These plans generally have "caps" on specific services--with a very low overall maximum benefit. Whereas a major medical plan may have a $1,000,000 per year maximum, the corresponding annual maximum with the mini-med can be as low as $10,000 or less. Some plans have only a $1,000 annual max! Each service area may have its own "caps," such as up to $250.00 per day for hospital confinement.
Another important aspect of the mini-med is that its coverage is tied to "Usual, Customary, and Reasonable Charges" as defined by the insurance company. This means that the rates can be subject to "medical cost inflation" resulting in annual rate increases--just like comprehensive major medical!
An Indemnity Plan is a very different kind of Limited Benefit Plan. They do not base their benefits on the actual charges incurred. They literally pay a fixed amount for specific services rendered. For example, if a doctor's visit actually cost $60.00, and the indemnity plan is set at $75.00, the plan pays the $75.00. The provider is paid $60.00 for his services and the insured is paid the difference of $15.00. On the other hand, in the same example, if the doctor's visit cost $80.00, the insured is responsible for the additional $5.00. The plan, however, may limit the insured to a specific number of doctor visits per year.
These plans usually have no deductibles, co-payments, or co-insurance. Payments, therefore, begin with the FIRST DOLLAR of charges incurred.
Indemnity plans generally have NO OVER ALL MAXIMUM annual limit. Their limits are based only on the services used. For example, if the plan is set to pay $500.00 per day for hospital confinement, the limit may be for "up to 30 days" per confinement and a maximum of two confinements per year, per person. In this scenario, the plan could pay $15,000 for a 30 day stay, for hospital confinement alone. (Meanwhile, a "mini-med" with a $10,000 annual maximum would only cover charges up to their max, and then the plan is over for the year. Example: They may pay: "80% of UCR, maximum of $250.00 per day.")
Limited Benefit Plans, in general, usually offer a choice of two or maybe three options from which an employer can choose. These are "fixed" plans designed by the insurer. They are usually labeled Level 1, Level 2, or Bronze, Silver, or Gold--or something similar.
However, some INDEMNITY plans offer the employer an almost UNLIMITED choice of plan designs! One particular company has nearly three million possible variations! Talk about flexibility!
Now for the "Cherry on Top!"
Regardless of which Limited Benefit Plan you choose, look for one with access to a PPO (Preferred Provider Organization). This is indeed the CROWNING JEWEL that makes a good plan even BETTER! PPO's offer attractive discounts, up to 30%, which makes one's benefits go a lot farther "in network" than out of network.
Although these plans are obviously very different, comparing benefit by benefit, the Mini-med and the Indemnity are very close in premium. Therefore, an employer does not have to be "limited" to a mini-med solely because of cost. After all, due to the fact that the premiums are designed to be exceptionally low, they are usually paid 100% by the employee. This brings us to the "explanation" of these plans.
Communication is a wonderful thing...When it happens!
Imagine for a moment someone saying to you: "This plan pays up to 80% of the usual, customary, and reasonable charges for your specific geographic area, after the deductible, up to the built in limits within the plan...blah...blah...blah!
What did you learn? Zip, Zero, Nada! Most folks don't have a clue what a UCR is, much less what impact it can have on their coverage! This can cause severe confusion even to the smartest of people. It is simply an "unknown," until the bills arrive!
Such is the difficulty of explaining a "mini-med." Just hearing the term "80%" can make most people think that's what it pays! Can you see the difficulty here?
On the other hand, the Indemnity plan is far simpler to explain.
WYSIWYG! What on Earth are you talking about now?
According to The Wikipedia, "WYSIWYG (pronunciation: WIZ'-EE-WIG), is an acronym for What You See Is What You Get, used in computing to describe a system in which content during editing appears very similar to the final product. It is commonly used for word processors, but has other applications, such as Web (HTML) authoring. This phrase was originally popularized by comedian Flip Wilson, whose character "Geraldine" would often say this to excuse her quirky behavior."
I can't think of a better way to describe INDEMNITY plans. They are indeed What You See Is What You Get plans!
If the plan states that it pays $50.00 for a doctor visit, or $250.00 per day in the hospital, that is EXACTLY WHAT IT DOES! This leaves very little room for confusion!
See? COMMUNICATION can actually HAPPEN!
Who should consider Limited Benefit Plans?
These plans are obviously not for everyone. They ARE, however, a GREAT ALTERNATIVE for
Uninsured Part-time or Seasonal employees
Uninsured Full-time employees who can't afford the company's health plan
Under-insured employees who want a "supplemental" option to "fill in the gaps" in their current health plan caused by deductibles and co-insurance
Provides new hires basic coverage during their waiting period, prior to their "eligibility" for the company sponsored health insurance.
"Money doesn't buy insurance, health does. Money just keeps it in force."
ACCESS to health insurance is limited by two factors: COST and HEALTH! We've already covered the Cost factor. Let's take a moment to look at the Health factor.
Many Limited Benefit Plans offer GUARANTEED ISSUE. This is VERY IMPORTANT for those who unfortunately have PRE-EXISTING CONDITIONS! But, getting a plan issued is only the beginning.
Generally, mini-meds require waiting periods from 6 to 12 months for pre-existing conditions to be covered, and this may vary from state to state.
Some INDEMNITY PLANS HAVE NO PRE-EXISTING CONDITIONS AT ALL.
Therefore, this type of Indemnity plan can overcome BOTH LIMITING FACTORS: COST AND HEALTH.
A Final Thought...
What is the REAL MEANING of having ACCESS to BASIC HEALTH INSURANCE?
One employee summed it up very well. He looked at his Insurance I.D. Card and said, "This is my DIGNITY CARD!"
Consider offering YOUR uninsured employees SOMETHING MONEY CAN'T BUY: DIGNITY!
James A. Croy began his Life and Health Insurance career in 1974. With 30+ years of total experience and 21+ years experience in the Employee Benefits arena, he is Co-Founder of Life Solutions, U.S., located in the Metropolitan Atlanta, GA area. For more ideas, and contact information, he invites you to visit his website at: http://lifesolutions.us/ [http://www.lifesolutions.us/]
Copyright 2007 – James A. Croy. All Rights Reserved Worldwide. Reprint Rights: You may reprint this article as long as you leave all of the links active, do not edit the article in any way, give author name and follow all of the EzineArticles http://EzineArticles.com/ terms of service for Publishers.
This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.
0 komentar:
Posting Komentar