The Patient Protection and Affordable Care Act has made life interesting—to say the least—for all of us over the last few years, but no one’s had a wilder ride than those in the limited medical benefit business.
First the law threatened the very existence of these and similar indemnity plans with onerous deductible limits and medical-loss ratio requirements.
BS: What’s been the driving force behind the more mainstream acceptance of limited medical plans?
BS: On the communication level—given what you just talked about with regard to turnover— you’re dealing with a different class of employee, I don’t mean that in a negative way. But I think given what you have to deal with, communication is probably more key than ever outside of the enrollment process.
JD: Right. I completely agree. If you’re calling, you know we’re selling solutions, we’re selling service, we’re selling admin. And so if we’re selling products we’re just selling products. But products won’t serve our clients well because the real issue is how to communicate and enroll benefits. It’s designed to make communications very hands off and for us to take ownership of the communication process so it’s an enrollment process with continual input from our clients on what works, continual analysis of what isn’t working and what may not be working. And constant tinkering and modification.
BS: And you think this approach is something employers, and by extension employees, would be receptive to?
JD: I think so. We’ve seen clients who’ve increased their deductible. I can point to a specific client that, when they analyzed their claim and benefit utilization, they determined in the year prior that 68 percent of their members spent less than $1,000 in medical services or consumed less than $1,000 in benefits. So 68 percent of the population paid more in contributions than they accessed in benefits.
The following year that client increased their deductible from $600 to $3,000, from $1,200 to $6,000. And overnight 68 percent of the people in that employer group benefitted because they’re paying less in contributions than they’re collecting or consuming in benefits. Now as you get up in the chain, though, you’re eventually going to get to about 10 percent who are now paying less in contribution but much more in out-of-pocket costs. Within that client there’s several wellness and education programs on how they can get healthy, how they can spend their deductible out-of-pocket costs dollars more wisely.