Limited Medical Plans

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Limited Medical Plans

• Continuing Education Course

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Limited Medical Plans

• Course Overview
• What are limited medical plans?
• The limited medical opportunity within the health
  insurance marketplace.
• Why you should offer these plans and to whom?
• How to use these plans as a solution to
  escalating costs and the uninsured population.
• What to look for in a limited medical plan.

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What Are Limited Medical Plans Called?

• Mini-Med
• Hospital Indemnity Plan
• Middle Medical
• Limited Medical
• A reduced benefit, reduced cost health insurance
  program

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What Are Limited Medical Plans?

• Limited medical plans are designed to provide a
  preset level of coverage for basic health care
  expenses.
• Physicians Office Visits
• Hospital Confinements
• Prescription Drugs
• Diagnostic X-Ray and Laboratory

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The Limited Medical Marketplace

• More and more insurance carriers have entered the
  limited medical market. There are no less than
  18 carriers marketing products to clients in 2006
  (1).
• A large percentage of the carriers have developed
  programs that bridge the gap between hospital
  indemnity and major medical programs.
• These programs offer PPO network access, riders
  for term life insurance, short-term disability,
  and discount cards for non-insurance benefits.
• (1) Aetna, Allstate, American Fidelity, American
  General Assurance Company, Assurity, BCS,
  Chesapeake, Cigna, Continental American Insurance
  Group, Fidelity Security, Markel Insurance Co.,
  Megalife, Nationwide, Pan-American Life, Reliance
  Standard, Symetra, TIG, and Transamerica

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The Uninsured Population Grows

• Experts believe that the U.S. health-care system
  is not a system of care for all, but rather a
  mixture of private and public services that is
  often shaped more by motivation of profit rather
  than by the desire to care for the health of
  everyone (2).
• The uninsured population has vacillated between
  45 and 48 million the last few years. Many of
  those individuals, up to 50, are employed and
  able to afford some level of health coverage.
• (2) Stephen E. Lammers, professor of religious
  studies at Lafayette College in Easton, PA.

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The Uninsured Population Grows

• The primary cause for the decline in employer
  based health insurance has been escalating health
  care costs.
• This has led some employers to stop offering
  coverage and many others to shift a higher
  portion of the cost to employees, thus making it
  more difficult for low and moderate income
  workers to afford insurance for themselves and
  their families (3).
• (3) Center on Budget and Policy Priorities,
  August 2005

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Age Matters What Workers Want on the
Job WORKPLACE BENEFITS INTEREST GROWNS WITH TIME
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Why Offer Limited Medical Coverage?

• Limited medical plans are a mechanism which
  allows the employer to offer a level of coverage
  to employees who are not currently enrolled in
  the major medical plan.
• Offering a limited medical plan establishes the
  broker as a individual who develops solutions for
  the employer.

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What is Limited Medical Coverage?

• Limited medical plans offer benefits that range
  from hospital indemnity plans to plan designs
  that include deductibles and copayments much like
  major medical programs.
• The flexibility in plan design also allows for a
  wide range of premium price points a positive
  when working with a part-time employee population.

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What Is The Limited Medical Demographic?

• Limited medical plans work well industries that
  employ the following -
• Permanent part-time employees in various service
  industries, such as hotels, casinos, restaurants,
  department stores, and other franchise
  operations.
• Nursing care industry
• Customer service call centers
• Employees with long waiting periods before Major
  Medical coverage is available.

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Which Limited Medical Plan is Best for Your
Client?

• The first type of coverage, a hospital indemnity
  plan, offers basic in-hospital benefits,
  providing coverage at a flat amount for a
  specific service.
• These plans can also include an outpatient
  surgery benefit as well as the choice of a rider
  option for physician office visits and/or
  prescription drug coverage.

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Which Limited Medical Plan is Best for Your
Client?

• There are multiple programs that include
  deductibles, copays, and coinsurance that look
  very much a major medical plan.
• A limited medical plan, by its nature and name,
  will not be as comprehensive as a major medical
  program.
• The need for client education with any limited
  medical program is imperative for it to succeed.

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Which Limited Medical Plan is Best for Your
Client?

• The determining factor must be the level of risk
  are you insuring against?
• How much coverage can the targeted demographic
  realistically afford?
• - Multiply hourly wage by two to determine
  weekly payroll deduction.

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Using Limited Medical Plans As A Solution

• What components should you look for in a limited
  medical offering?
• 1) Affordability based on the groups
  demographic
• 2) Guarantee issue
• 3) No pre-existing condition limitation
• 4) Quality administration from carrier or TPA
• 5) Flexibility in plan design and structure

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Limited Medical Plan Solutions

• Affordability
• The average cost of single coverage in an
  employer sponsored major medical plan is 335 per
  month (4).
• Limited medical plans typically range from 40 to
  180 per employee per month.
• (4) The Kaiser Family Foundation

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Limited Medical Plan Solutions

• Guarantee Issue
• The intended audience is making their first foray
  into the health insurance arena.
• A program that offers no medical underwriting
  will result in a more successful enrollment and
  more enthusiasm towards the plan.

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Limited Medical Plan Solutions

• No pre-existing condition limitation -
• Offer immediate access to benefit, a benefit that
  the employee is typically funding on a payroll
  deduction.
• The feature allows for insureds to feel there is
  value in the product they are purchasing.

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Limited Medical Plan Solutions

• High level of administration and service
• Stress the quality of the administrator
• How long have they administered limited medical
  plans?
• Is it a core product for the company or offered
  as an ancillary program?

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Limited Medical Plan Solutions

• Flexibility of the product offering
• Is the program able to accommodate the needs of
  the client?
• Seek out partners who offer multiple plan design
  options.

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Limited Medical Plans - Summary

• Limited medical plans will continue to grow in
  popularity as health insurance costs continue to
  increase.
• Programs are successful when promotion and client
  education are given top priority.
• Plan designs contain flexibility so take time to
  analyze the market to meet the needs of your
  client.

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Limited Medical Plans -

• Ask yourself this question
• What value do I bring to my customers?

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Limited Medical Plans -

• Become an expert !
• Know the limitations
• Educate the employees-this is not a major medical
  plan
• Be aware of the fine print
• Have access to accurate information and solutions

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Limited Medical Plans -

• Limited Medical Companies
• SRC/Aetna
• Starbridge/Cigna
• Foundation One/American Fidelity
• Transamerica
• HM Benefits
• Optimed
• Nationwide
• PanAmerican
• American Worker Plan
• And many more!

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Limited Medical Plans -

• Which program sells best?
• Scheduled Benefit Plan
• National PPO
• Easy to do business with
• National PBM
• Depth of products available
• Good claims service

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Limited Medical Plans -

• Two Types of Plans
• Scheduled Benefit Plans
• built from hospital indemnity plans
• pre-determined benefit amounts
• reimbursement/direct payment of benefits
• Usual and customary (UCR) plans
• usually include deductible/s and co pays
• built on major medical platform
• reduced benefits to fit pricing and risk
  constraints
• in-network and out-of-network benefits
• balanced billing

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Limited Medical Plans -

• Carrier Responsibility
• Underwrite
• Promote
• Administer
• Fulfill
• Limited Indemnity Plans and other
  voluntary
• benefits

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Limited Medical Plans -

• Broker Responsibility
• Know your product
• Consult inform
• Design
• Implement
• Administer enrollment
• Limited Indemnity Plans and other
  voluntary
• benefits via inbound/outbound call center
  and
• other enrollment solutions

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Limited Medical Plans -

• Questions/Comments?