What’s a CDHP? It’s a Consumer Directed Health Plan. This is a fairly recent option for health insurance consumers who want to take a more active role in managing their health expenses.
An annual survey of 453 large U.S. employers shows that 47% now offer this option, up from just 33% in 2006. The advantage for the employee is that he can set aside pre-tax dollars for expected health care expenses. This class of benefits includes: the HSA, the HRA, and also flexible spending accounts.
It may astound you to learn that you can put your set-aside funds on a dedicated piece of plastic now. The technology is such that you can keep track of two such accounts on one prepaid or debit card. This means that you could keep both your HAS and your limited purpose FSA on the same card. This means that the consumer can even use this one card for their pharmacy expenses.
What is behind the stunningly fast growth of the CDHP?
The number one reason is this: Companies that have them report growth of medical expenses at HALF the rate of those companies without them.
A secondary reason is that employers can tailor their offerings to the needs of their employees, to a degree impossible for traditional group plans.
The attitude of both employers and employees shows a willingness to consume health care data in a mutual effort to contain expenses. For example, check out websites for Aetna or WellPoint. WellPoint has a program to allow patients to rate their doctors (you may have heard about this program in other media). Aetna launched a new website where customers can consult health records about health risks, medical costs, and local doctors.
May I add that some employers are going in another direction entirely. This is where they do NOT offer insurance directly, but contract with administrators such as Administaff; the employee simply selects whichever coverages he or she would like deducted from the paycheck.
I have to admit I scratch my head wondering where we are supposed to find the time to do an accurate assessment of all this data that is being thrown at us. While the younger generation may be theoretically able to access information on the internet, there is still the problem of having the time to properly analyze and assess all this data.
Somehow I think that something is being slipped by us while we read the directions handed to us in a ‘drive thru’ healthcare system. One issue still not directly addressed is that while we can compare prices between hospitals in our network, we may learn that the exact same procedure may be $2,000 cheaper at a hospital in the next county. Unfortunately the insurance program does not allow us to go outside the network for the county we reside in!
How are you going to fix that, Mr. CDHP?
Friday, July 4, 2008
You May Have Noticed A Lotta Insurance Agents Have Gray Hair
The biz magazines for the insurance field have been bemoaning the fact that there are so few younger people entering the insurance agent or broker field. One magazine alone had stories about this in both the September 2007 and the July 2008 issues. One cover says “young brokers have just vanished”. Can it really be that the insurance agent will go the way of the buggy-whip maker?
The average age of insurance agents continues to climb -- currently it is 57. Sometimes it seems like the only younger people getting into it are the sons and daughters of current agents. It doesn’t help that most companies take a sink-or-swim approach to developing new agents -- here, kid, you passed your company’s 5-day training session, now get out there and find your own customers and sell, sell, sell. Young people with college debts to repay just cannot go weeks without a sale and commission.
My Suggestions: Possibly it would be better if the industry adopted an internship or mentorship model of bringing up new associates. And teaching agents how to develop a business plan is an absolute must. But you have to admit, there are few businesses where a kid right out of college COULD get in with a Fortune 500 company with little start-up cost or investment. Insurance is just about the only one there is nowadays.
Insurance is in my view an intensely personal transaction. The best agents really LIKE people and want them to do well, and want them to avoid losing everything they’ve worked so hard for. There is no way to accurately assess the real needs of a visitor/caller to one’s office (or website) or get down to the bare facts in a cold call. Many Americans are under the impression that all insurance is alike, really, that you can compare prices on the internet and that’s all there is to it.
NOT!
In an era when tons of information and data are at your fingertips on the web, I feel that today’s customers are LESS informed about insurance in general and about the advantages of different kinds of insurance in particular.
I could write a book about general misinformation about Life or Health Insurance -- and who knows, maybe one day I will. I have met people informally online or whatever who think that because they are perfectly healthy now, they do not need health insurance and should not be forced to buy it. They do not seem to understand that once they get a serious health condition that they will have a hard time qualifying for ANY health insurance, at ANY price! And the worst part is that they do not know that insurance products vary from state to state according to what that state’s insurance commissioner will allow to be sold there! It can be very frustrating for me as an agent when my company does not offer a desired rider (such as return-of-premium) in that state.
Also I have had frustrating sessions trying to explain how insurance works to people who don’t want to listen after more than 30 seconds because they think that you are just trying to sell something they don’t need. They have a mental block when I try to tell them that a responsible agent will spend plenty of time trying to find out what you DO need so that you do not waste your insurance dollars. A responsible agent will take all the time necessary to explain what your options are, what any provisions mean, the advantages and disadvantages of a type of policy, and to answer any questions you have.
And you need to do your part, too, by doing a bit of homework (my site is a good place to start, as are the Komen Foundation, Health Symphony, and the industry NAIC site). Find out the different kinds of policies and ask the agent what kinds of riders are available in your state.
Then call up a few local offices, (or visit websites) and ask for assistance on whatever concerns you have. You can tell an agent to stop bothering you if he or she is pressing you to buy before even explaining the policy. YOU have to speak up for YOUR needs. Now get at it.
The average age of insurance agents continues to climb -- currently it is 57. Sometimes it seems like the only younger people getting into it are the sons and daughters of current agents. It doesn’t help that most companies take a sink-or-swim approach to developing new agents -- here, kid, you passed your company’s 5-day training session, now get out there and find your own customers and sell, sell, sell. Young people with college debts to repay just cannot go weeks without a sale and commission.
My Suggestions: Possibly it would be better if the industry adopted an internship or mentorship model of bringing up new associates. And teaching agents how to develop a business plan is an absolute must. But you have to admit, there are few businesses where a kid right out of college COULD get in with a Fortune 500 company with little start-up cost or investment. Insurance is just about the only one there is nowadays.
Insurance is in my view an intensely personal transaction. The best agents really LIKE people and want them to do well, and want them to avoid losing everything they’ve worked so hard for. There is no way to accurately assess the real needs of a visitor/caller to one’s office (or website) or get down to the bare facts in a cold call. Many Americans are under the impression that all insurance is alike, really, that you can compare prices on the internet and that’s all there is to it.
NOT!
In an era when tons of information and data are at your fingertips on the web, I feel that today’s customers are LESS informed about insurance in general and about the advantages of different kinds of insurance in particular.
I could write a book about general misinformation about Life or Health Insurance -- and who knows, maybe one day I will. I have met people informally online or whatever who think that because they are perfectly healthy now, they do not need health insurance and should not be forced to buy it. They do not seem to understand that once they get a serious health condition that they will have a hard time qualifying for ANY health insurance, at ANY price! And the worst part is that they do not know that insurance products vary from state to state according to what that state’s insurance commissioner will allow to be sold there! It can be very frustrating for me as an agent when my company does not offer a desired rider (such as return-of-premium) in that state.
Also I have had frustrating sessions trying to explain how insurance works to people who don’t want to listen after more than 30 seconds because they think that you are just trying to sell something they don’t need. They have a mental block when I try to tell them that a responsible agent will spend plenty of time trying to find out what you DO need so that you do not waste your insurance dollars. A responsible agent will take all the time necessary to explain what your options are, what any provisions mean, the advantages and disadvantages of a type of policy, and to answer any questions you have.
And you need to do your part, too, by doing a bit of homework (my site is a good place to start, as are the Komen Foundation, Health Symphony, and the industry NAIC site). Find out the different kinds of policies and ask the agent what kinds of riders are available in your state.
Then call up a few local offices, (or visit websites) and ask for assistance on whatever concerns you have. You can tell an agent to stop bothering you if he or she is pressing you to buy before even explaining the policy. YOU have to speak up for YOUR needs. Now get at it.
Sunday, June 29, 2008
Do You Really Want to Buy an Annuity? You May Have to Sign it Over to the State
According to a recent report, and a headline in one industry network, “within 5 YEARS, 57% of all annuity agents will be out of Business due to Regulatory Issues and Suitability Restrictions!”
Why would it say that?
One big factor is the move towards the Partnership Programs between consumers, states, and the insurance industry. Under this program, which has been rolled out to about ten states and will eventually affect all 50 states, persons who enroll will have to sign over their annuity plans to the state.
For a more detailed explanation of this program, please go to the excellent article here: http://minnieapolis.newsvine.com/_news/2007/12/29/1192758-minnesota-getting-ready-to-join-list-of-states-with-long-term-care-partnership-program
Why would it say that?
One big factor is the move towards the Partnership Programs between consumers, states, and the insurance industry. Under this program, which has been rolled out to about ten states and will eventually affect all 50 states, persons who enroll will have to sign over their annuity plans to the state.
For a more detailed explanation of this program, please go to the excellent article here: http://minnieapolis.newsvine.com/_news/2007/12/29/1192758-minnesota-getting-ready-to-join-list-of-states-with-long-term-care-partnership-program
California’s Ranks of Uninsured to Swell 17K in Ventura Cty. Alone
Due to Gov. Arnold Schwartzengger’s Medi-Cal cuts and other measures to offset the state’s $17 Billion budget deficit, the ranks of the uninsured could swell by a million statewide and by 20K in Ventura County alone.
One of the changes to Medi-Cal is forcing parents and children to prove they qualify every three months. A study by Health Access California, a Sacramento advocacy group, has just been released. It projects that 17 thousand residents in Ventura County would lose coverage due to the above measure and also due to increased premiums for the California Health Families low-cost program.
Currently an estimated 7 million Californians, and 107,000 residents of Ventura County, are uninsured. For full story see:
http://www.venturacountystar.com/news/2008/jun/26/uninsured-ranks-may-rise-by-20200-in-2010/
One of the changes to Medi-Cal is forcing parents and children to prove they qualify every three months. A study by Health Access California, a Sacramento advocacy group, has just been released. It projects that 17 thousand residents in Ventura County would lose coverage due to the above measure and also due to increased premiums for the California Health Families low-cost program.
Currently an estimated 7 million Californians, and 107,000 residents of Ventura County, are uninsured. For full story see:
http://www.venturacountystar.com/news/2008/jun/26/uninsured-ranks-may-rise-by-20200-in-2010/
Political Forecasts & Protests @ Health Insurers' Mtg.
Prognostications galore as America's Health Insurance Plans, the tradegroup of private health insurers, turned the stage over to former lawmakers and presidential advisers to discuss the future of U.S. health care during the group's annual meeting in San Francisco on last week. There were voices for a national health plan from working people -- here’s a sampling:
‘Alphonso Pines, 55, a union representative for United Here Local 2, was one of many raising his voice for a single-payer health-care system and against the for-profit multi-payer one. “If everybody’s covered then costs would have to go down,” he said.
Pines blamed health insurers for suppressing workers’ wages. “They’re greedy. They keep raising rates….They’ve had a good time under the Bush administration without no checks and balances.”
‘Mark Fisher, a non-union plumber in San Francisco, said he heard about the rally on the radio and wanted to join the protest on behalf of people who can’t get insurance — even though he has no beef personally with the care he’s received. Health insurers drive costs up, and a Canadian-style system would be more efficient, he argued.
‘“They’re a middle man,” he said of private health insurers. “They serve no useful purpose.”
‘“The American system works very well for me,” said Fisher, 65, who pegged his annual income at $100,000. “But morally the system is corrupt. It’s very unfair to the person who works for an hourly wage.”’
See the Health Matters blog, link given below. http://blogs.marketwatch.com/healthmatters/2008/06/20/health-insurers-meeting-abuzz-with-political-forecasting-and-protests/?siteid=nwtpf
‘Alphonso Pines, 55, a union representative for United Here Local 2, was one of many raising his voice for a single-payer health-care system and against the for-profit multi-payer one. “If everybody’s covered then costs would have to go down,” he said.
Pines blamed health insurers for suppressing workers’ wages. “They’re greedy. They keep raising rates….They’ve had a good time under the Bush administration without no checks and balances.”
‘Mark Fisher, a non-union plumber in San Francisco, said he heard about the rally on the radio and wanted to join the protest on behalf of people who can’t get insurance — even though he has no beef personally with the care he’s received. Health insurers drive costs up, and a Canadian-style system would be more efficient, he argued.
‘“They’re a middle man,” he said of private health insurers. “They serve no useful purpose.”
‘“The American system works very well for me,” said Fisher, 65, who pegged his annual income at $100,000. “But morally the system is corrupt. It’s very unfair to the person who works for an hourly wage.”’
See the Health Matters blog, link given below. http://blogs.marketwatch.com/healthmatters/2008/06/20/health-insurers-meeting-abuzz-with-political-forecasting-and-protests/?siteid=nwtpf
New Online Hospital Comparison Tool from Consumer Reports Unveiled
Called “Your Hospital Stay”, it allows you to compare hospitals online. Key in your state and city and get comparisons of hospitals in your area.
I should add that I have tried a similar site for the state of Minnesota -- and one very big tip I can pass along is to compare the local hospital to an outlying county. I found that prices for an average, common surgical procedure could be $2,000 less by going outside Hennepin County to neighboring Scott County -- to the town of Shakopee, for example.
http:// health-insurance.suite101.com/article.cfm/compare_hospitals_online_now (unfortunately they do not give you a link to the Consumer Reports tool)
http:// www.consumerreports.org/ health/doctors-and-hospitals/hospital-home.htm
AND the price check site for Minnesota Hospitals is at www. MNhospitalPriceCheck.org -- site is managed by the Minnesota Hospital Assn.
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