Adoption of individual policies in experimental stage
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Some health insurers are hoping that new benefit designs targeting individuals will attract some of the uninsured and the
self-employed, who either don't realize that they can get insurance or don't know how much they can afford.
The Kaiser Family Foundation (KFF) says that a lack of health insurance coverage is a problem for many more Americans than
it was 10 years ago. In fact, 81% of the uninsured are in working families–69% with at least one full-time worker and 13%
with a part-time worker.
Consumerism and the high cost of healthcare are bumping heads, giving patients more control while at the same time, demanding
they pay a larger chunk of it.
In 2006, 61% of firms offered health benefits to at least some of their employees. As many as 90% of large companies (more
than 50 employees) offered coverage, while only 48% of the smallest companies (three to nine employees) did, according to
KFF. Since 2000, the percentage of firms offering benefits has dropped 69%. Although health savings accounts are making a
splash, only 7% of companies providing health benefits offer a high-deductible health plan with a savings option. SEGMENTING A POPULATION
Aetna has rejuvenated its individual benefit, which was introduced in Pennsylvania in 1996. It became available in 16 states
and Washington, D.C., in 2004 and now covers 200,000 lives. Laurie Brubaker, head of individual markets for the Hartford,
Conn.-based insurer, says there is an unmet need for the individual market as more and more employers, especially small groups,
are no longer covering their employees. She notes that 30% to 35% of those selecting one of Aetna's individual plans were
formerly uninsured.
Brubaker says that Aetna's PPO-type and high-deductible plans have been designed to address the requirements of individuals
based on lifestyle changes, such as early retirement, between jobs, starting one's own business, graduating from college or
starting a family.
"The benefits are similar, but the price points differ," she says. "It's all about price." The $2,500 deductible has proved
to be the most popular, while the $500 is the least. "We offer the lower deductible to mimic what employees received from
their employers," she says.
Brubaker points out that the options offer comprehensive, robust benefits, not just catastrophic coverage. "Individual insurance
has been viewed as gap or short-term coverage but now it is for the long term," she says.
In addition to the PPOs and high-deductible plans, Aetna also offers two hospital plans that provide members with lower priced
coverage for basic healthcare services. These plans include limited coverage for preventive care as well as inpatient hospital
coverage and limited benefits for outpatient surgery, skilled nursing or home health services.
Like Aetna, WellPoint based in Indianapolis, has segmented its prospective individual members, from "young invincibles" to
the Hispanic marketplace, offering a Spanish language Web site and culturally sensitive providers. The plans consist of 30%
to 35% formerly uninsured members.
"We used a shotgun approach but have now conducted research to target different markets and tailor benefits to them," says
Jude Thompson, senior vice president of the under 65 market for WellPoint.
Tonik, designed for those aged 19 to 29, offers a $3,000 deductible, $30 copayments for the first four office visits per year,
and covers 100% of x-rays, lab tests, overnight hospital stays and out-patient surgery once the deductible is met. Only generic
drugs are covered. About 70% of Tonik's members were previously uninsured.
