Worksite and Indemnity Limited Benefit Medical Plans: Whats Fact, Whats Conjecture?
By Matthew Esposito
Even such respected writers as Mr. Wendell Potter whose recent piece in the New York Times doubts the usefulness of this particular insurance product, may be correct about some things some of the time, but may be woefully wrong about others all of the time. Half-truths can prove inflammatory and unduly shake trust. While authors like Mr. Potter need to sell books by being provocative and edgy, the well being of the insured, may be undermined unnecessarily. There is nothing wrong with promoting one’s book, but the premises of the sale should really not be predicated upon misinformation and fear. In his recent Timesopinion piece, Mr. Potter holds the view that he “would encourage people to completely ignore the marketing materials you receive from the insurers. The information is geared to persuade people to buy the product. It doesn’t explain the benefits clearly…Don’t expect everything that you need will be covered in the policy. Things like maternity benefits, transplant coverage and of course experimental procedures may be excluded. That’s the kind of information you will never see in the marketing materials….”
This is not good advice, nor does it give much credit to the reader’s intelligence or to the regulators of insurance. Few industries undergo the language scrutiny to which insurance companies are subject.
The healthcare industry is comprised of people and organizations, for-profit and not-for-profit alike, whose basic contract is the keeping of promises, no less than when a banker pledges to release your monies to you on demand or a drug professional pledges to deliver a specific dosage. Insurers make and keep claim and use promises and that process is totally well regulated; in New York, for one, the regulatory framework is renowned in the world for its strength and circumspection. It will come as a surprise to practitioners of insurance that Mr. Potter, when asked about what types of insurances that consumers should avoid, would respond: “I’d be wary of these so-called mini-med or limited-benefit plans… (because)…”This is fake insurance, in my view”. “Fake insurance” is an impossibility, almost a contradiction in terms. Of course, there are probably some fake insurance schemes like those desperate third world e-mails from recently deposed nobles appealing for huge money transfers to enable gold to be shipped out of the country with twenty times ROI and such, but these scams are not the province of any one field or area, surely not insurance. To analogize legitimate insurance offerings to fakery is not sound reasoning, even to the most naïve reader. To state such a reckless, personal opinion to discourage or frighten people and to discredit an entire industry or insurance product disregards the truth and nature of the subject.
To be even more specific, Limited Benefit Medical plans, which are some of the most highly scrutinized of policies, must be filed and approved by the department of insurance in each state and must be in full compliance with all state mandated benefits. The repercussions and penalties are severe for Limited Benefit Medical carriers who do not properly abide by the rules, regulations and laws. This is not unique or particular to this line of coverage, in fact. It is anything but fake anything.
The facts that attend the desirability of this coverage consistently confirm that:
1. 80% of the population does not reach a $500 annual deductible.
2. 90% of the population will not reach a $1,250 annual deductible.
3. Over 90% of the population will spend less than $2,000 a year on medical goods and services.
4. Less than 1% of the population spends $25,000 or more a year on medical goods and services.
5. Less than one-quarter of 1% of the population will spend $100,000 or more a year on medical goods and services.
6. Approximately 95% of all medical claims are for Doctor’s office visits, Diagnostic Tests, Emergency Room visits and Prescription Drugs which many Group Sponsored Limited Benefit Medical plans do an excellent job accounting for. 7. 5% of the population is responsible for over 50% of the medical spend in this country.
High-Quality, Indemnity Limited Benefit Medical Insurance is a good option. It is also why well over 1,000 waivers including those from The United Federation of Teachers, McDonalds Corporation, and 3M to name a few, from “Obamacare” have already been issued to many of the largest Unions and Employers in the nation, so that they may continue to offer their Quality and Affordable Limited Benefit Medical plans. It is what drove the CEO of McDonald’s to the floor of Congress to make clear the fact that over 90% of their employees on such plans are satisfied with their coverage and never reach their annual plans benefit limits. Additionally, four STATES: TN, FL, OH and NJ have just been granted federal waivers for Limited Benefit Medical plans with more in the works.
As a rule, Group Sponsored Limited Benefit Medical plans like ones that my organization represents, go above and beyond in their attempt to describe accurately and responsibly what type of coverage they provide and what the exclusions are. Unquestionably, Limited Benefit Medical plans do not fit the needs of everyone. However, these plans are part of one of the fastest growing segments within the healthcare industry because of their many positive and affordable applications. In fact, Limited Benefit Medical plans can and are meeting and satisfying the needs and demands of thousands of employers and millions of consumers. Additionally, these plans, for some, can be more attractive than traditional major medical plans not only because of cost, but because they give the consumer the ability to “sculpt” and craft program benefits to meet the specific needs and concerns of an employer group or individual by combining their Limited Benefit Medical Plans with additional benefits such as Cancer, Critical Illness, Transplant and Accident insurances.
Mr. Potter discredits himself when he divines the final shape and form of “Obamacare”, along with the future of Indemnity Limited Benefit Medical plans or in fact the medical insurance industry as a whole. There is no possible way he or anyone else can claim that they know what the final reform law will look like and what the future holds for the final shape and form that Limited Benefit Medical plans will take come 2014 or later. This kind of speculation really writes the news rather than reporting it; it creates the subject matter rather than commenting on it.
The best advice to consumers and employers is clear: since no one knows what the future of “Obamacare” will be nor what the final shape healthcare reform will take, buyers need to continue to consider the data and facts, then take advantage of all responsible and affordable options that are available and meet your cost and benefit objectives, today. Licensed, trusted professional advisors are the best bet for consumers to help navigate options. It is childishly naïve simply to dismiss an entire set of options or decisions based upon speculative reasoning and facts that are scotch taped together to add up to an opinion for publication in the media. For one, our approach at FNA is a transparent, client driven, fact and accountability based commitment to our brokers and their insureds. We fully research and understand the products and the market’s needs, as will most of you reading this, and need to set the misinformation straight once and for all. on-line course and announced they will give a 10% discount. The New York Insurance Department is looking into the matter and the Motor Vehicle Department is contacting the course sponsor. Sponsors who seemingly innocently advertise courses on the internet that “drivers should check with your insurance carrier” are really scamming consumers into taking their un-approved course which has little or no temporal limitations and may be completed in less than twenty minutes in some cases. The risk to the NY driver is that after the company finds out about it they will reverse the discount and the consumer can forget about a refund for the course. Additionally, insurance rates will rise for all NY drivers because completers of un-approved courses may not be safer drivers but will receive the insurance discount anyway. Bottom line insurance companies, insured’s and the state are caught in a squeeze play that has not been addressed and has persisted for some time now. Empire Safety Council has tried to protect consumers, insurance companies and even the state from unscrupulous operators by suggesting that the New York Department of Motor Vehicles require all approved course certificates contain the words APPROVED BY THE NEW YORK STATE DEPARTMENT OF MOTOR VEHICLES in 12 point bold print at the top of every certificate and that the New York Insurance Department send out its Circular Letter to all New York State automobile insurance issuers requiring that no discount be given unless the certificate contains these words. Our council’s certificates have had these words in 12 point bold type for many years. Hopefully, these state agencies will make some positive change soon.
