Laboratory News

Innovative Health Insurance Plans Cater to Young Customers

It is recognized that more than half of the uninsured in America make more than $50,000 per year and choose to go without health insurance. Now, an emerging group of health insurance companies are targeting these uninsured but well-off consumers with creative insurance plans that are reasonably-priced.

The Wall Street Journal reports that a small Michigan insurer, American Community Mutual Insurance, is launching a new health insurance plan in Texas called "Coverage on Demand."  This plan will be introduced in Michigan, Ohio, and Missouri during 2008 under the name "Pay-As-You-Go."  The company hopes to roll out the product in more than 13 states within the next year.

As part of the plan, a consumer buys one of three limited-benefit plans called "Tempo," "Rhythm," or "Groove" with annual benefit caps of $1,000, $2,500, or $5,000 respectively.  Deductibles range from nothing to $500.  Premiums are low-about $88 to $95 per month for a 25-year-old man in Dallas. 

The "beauty" of these plans, according to American Community Mutual Insurance, is that policy holders can pay a lump-sum annual "activation" premium of $9,000 to $10,000-on top of the basic premium-to receive a guaranteed $5 million of catastrophic coverage for that year.  American Community Mutual Insurance offers to finance that amount through an outside company over three years, with interest.

Limited benefit plans like that of American Community Mutual Insurance are popping up in many communities.  They feature low deductibles, but cap the maximum amount of benefits.  They are mostly targeted towards younger people, who are less likely to get sick and, consequently, are less likely to get health insurance for themselves when their job does not offer it.

Unfortunately for those insured under the American Community Mutual Insurance plan, the plan would become prohibitively costly if a condition, such as cancer, arose that might span more than a year.  This is because the coverage reverts back to the original benefit cap when the policy renews each year.  "We would never contend we are the solution for everyone," says Mike Grandstaff, chief executive of American Community Mutual Insurance's new Precedent Insurance unit, which is selling the "Coverage on Demand" plans in Texas, "customers with the policy who do get sick would be better off longer term finding other coverage through a new job or a state-run insurance program."

The likely result of limited coverage health insurance plans for laboratories is that billing will become more complicated.  Laboratories will need to develop more effective ways of working with physicians' offices to collect up-to-date billing information on their patients' health plan.  This will be particularly important when providing testing for patients in their 20s and 30s, who are likely to switch health insurance frequently.

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