Insurance Agent Forum

[healthagent]

The good news and the bad news is the new technology. It's insanely expensive to design and implement.

Now, for example, there's laser surgery. Obviously fantastic for both the doctor and patient but someone has to pay for that new technology.

One day this will be like Star Trek and we'll just "scan" someone, then stick some device on 'em and boom - cured.

But you weigh that against what it costs. People can bitch about the cost of medication but it can take the pharmaceutical company years of research and trials to find one new medication. Someone has to pay for it.

[susieQ]

And then there's always crap like this that adds to the problem.

NPR: Merck to Pay $670 Million to Settle Fraud Case

[healthagent]

Well we need tort reform badly - but that's another topic.

[ijerome]

Simple answer. CA always leads the way, in fashion, high style, dot.coms and housing bubbles.

So, why is GR posting significant decreases in many states East of the Rockies?? And, maybe Assurant will now be competitive in CA.

[dwilkie2000]

Dave020 - the answer to the question on why they raised rates after they lowered rates is: their actuaries dropped the ball. The problems are not just limited to Anthem Blue Cross of California – it’s systemic throughout the parent company Wellpoint. On Monday, Mar 10, Wellpoint issued a profit warning. Their stock has since tanked 25%.

Most of the analysts that watch the industry see this as a management problem at Wellpoint. Here are some quotes:

"WellPoint is supposed to be the market-share dominant company with the best medical cost structure and 250 actuaries on staff. This isn't supposed to happen at WellPoint.'' Thomas Carroll, Stifel Nicolaus

"We believe that WellPoint's fumble is company specific, and not indicative of an industry trend." David Shove, BMO Capital Markets.

"It is our belief that about 65% of the problems experienced by WellPoint are company-specific. They mispriced their commercial business in 2007 and didn't catch it in time to price appropriately for 2008 either." Matthew Perry, Wachovia

In response to the profits warning, Fitch cut their Wellpoint outlook to negative:

Fitch cuts WellPoint outlook to negative

Lastly, there are rumors that Aetna could acquire WellPoint. See this video clip of Citigroup analyst Charles Boorady on CNBC last week:

MSNBC - Video Front Page

[OneMorePolicy]

Originally Posted by Dave020

Lumenos price points were experimental in California. New product in this market, untested actuarial exposure. This is not an 18-month old product, Lumenos has been around like 40 years, just not available in CA until Anthem merger.

.....That is exactly why Lumenos has introducted the non-maternity product line. Reduces cost by elimination of the maternity benefit (actuarily determined to price for 100% utilization) and adds in coinsurance component (70/30) to buffer premium cost.

Met with the local BX rep, who basically confirmed what Dave020 says. The rep said that the the Lumenos was a product previously offered only to large groups (trying to remember if he said group size was 500+) and their utiliization was relatively low. When Lumenos was introduced to California (thought he said April 2007), it was offered to small groups, but their pricing was similar to large groups. The small groups in California immediately realized how great this benefit-rich plan was and utilized the heck out of it. The rep said the physicals and blood tests and mammograms etc. ran up the costs, yet those costs were covered by BX, not the client. Now that BX has experienced the claims, they're adjusting their pricing accordingly. Basically, he said the actuaries blew it at the start and should have priced it higher initially.

[Dave020]

Originally Posted by OneMorePolicy

Met with the local BX rep, who basically confirmed what Dave020 says. The rep said that the the Lumenos was a product previously offered only to large groups (trying to remember if he said group size was 500+) and their utiliization was relatively low. When Lumenos was introduced to California (thought he said April 2007), it was offered to small groups, but their pricing was similar to large groups. The small groups in California immediately realized how great this benefit-rich plan was and utilized the heck out of it. The rep said the physicals and blood tests and mammograms etc. ran up the costs, yet those costs were covered by BX, not the client. Now that BX has experienced the claims, they're adjusting their pricing accordingly. Basically, he said the actuaries blew it at the start and should have priced it higher initially.

It makes sense. The January 2008 rate reduction was not across the board, it applied to all "non-Lumenos" plans. So, it would appear that even in January with the rate down, BCC knew that Lumenos for small group was underpriced.

[OneMorePolicy]

Wondering why Lumenos utilization would be lower for a large group versus a small group? Could it be that the small group users includes the owner and their dependents, and are thus more "aware" of the "free" benefits provided since they're paying for the premiums, versus an employee of a large corporation who may not read their policy carefully since its probably employer-paid and go into the doctor only when they're sick?

[Mr. Bill]

It could also be as simple as people who have not had prior coverage and all of a sudden get insurance start using the plan. Most of us who have had coverage all our lives aren't racing to the doctor's office to get services? Me no know.

[OneMorePolicy]

Originally Posted by Mr. Bill

It could also be as simple as people who have not had prior coverage and all of a sudden get insurance start using the plan. Most of us who have had coverage all our lives aren't racing to the doctor's office to get services? Me no know.

Wouldn't that scenario apply to a large group also? An uninsured could become employed by either a large group or small group, and then start camping out at the doctor's office? I'm reaching too.

[Dave020]

An interesting item related to this...

The HSA Non Maternity Lumenos plans on the Plan Finder on Agent Connect sites (and BCC site) will in most cases show something like the following:

HSA NM 1500 $212
HSA NM 3000 $172
HSA NM 3500 $155
HSA NM 5000 $194

Now you have to ask yourself (believe me, people comparing online will ask you) why the HSA NM 5000 plan, with highest deductible and duplicate benefits costs more than the 3000 or 3500? It's counter-intuitive.

Apparently, the previous pricing drove large numbers of people into the 5000 plan and, because of heavier than predicted utilization of preventative benefits in that plan, it had to be re-priced to reduce the attractiveness of the plan.

And just when you think you understand health insurance....

[Dave020]

I should specify this is the individual & family plan portfolio, not the group portfolio.

[OneMorePolicy]

To cover all bases, BC might as well start offering a 5000A, 5000B, 5000C, 5000D .......till infinity, 5000Family of Plans. First plan would cost say $5 monthly premium, then next plan $6, then $7, ..... till infinity. If a plan get utilized too much, close off new enrollments. That way we can stay one step ahead of the clients.

[OneMorePolicy]

Originally Posted by Dave020

An interesting item related to this...

The HSA Non Maternity Lumenos plans on the Plan Finder on Agent Connect sites (and BCC site) will in most cases show something like the following:

HSA NM 1500 $212
HSA NM 3000 $172
HSA NM 3500 $155
HSA NM 5000 $194

Now you have to ask yourself (believe me, people comparing online will ask you) why the HSA NM 5000 plan, with highest deductible and duplicate benefits costs more than the 3000 or 3500? It's counter-intuitive.

Apparently, the previous pricing drove large numbers of people into the 5000 plan and, because of heavier than predicted utilization of preventative benefits in that plan, it had to be re-priced to reduce the attractiveness of the plan.

And just when you think you understand health insurance....

I view this new pricing as a major credibility-killer for a new agent like me. Trying to establish myself as "knowledgeable and reasonable" to a client but now having to explain that choosing a higher deductible doesn't mean lower premium. Well, guess I'll need proper training to adjust to these changing times.......

YouTube - SNL Consumer Probe

[Dave020]

As Fitzy says on youtube "boy this humble pie sure tastes like sh**"

I was givinig the Plan Finder a good going over yesterday to see about some bugs I found and here is one thing that blew right by me......

When you quote NM HSA, the 3500 in that quote from the drop down box is NOT Lumenos, it is that old PPO 3500 plan. When you go back and do rates again without using that plan, they line up pretty well as would be expected. It's the pricing on the 3500 that skews the numbers.

Now, I asked that they either move that plan (it is the danged default option on the list!!) or at least put something on there that says it is a non-Lumenos plan. We'll see if it ever gets changed.

So, basically right now if you send a prospect to the PF to run comparison and quote, the first plan they see is not the Lumenos, so they are gonna call/e-mail and ask both about the odd pricing and why does it say on the default option that preventative care is after deductible when you told me it was before deductible. Ugh!

Also, and this eats my shorts, when they brought in whatever "agents" were involved in the design (I know I wasn't invited), these rocket scientists decided that it would "simplify" the process to eliminate the Lumenos brand name from the Plan Finder.

So, not only do your prospects not know which plans are the Lumenos plans, but they might be looking at the default option that comes up which is, for some strange reason, a non-Lumenos plan without the great preventative care benefit that freaking sell the Lumenos plans.

Of course, those same rocket scientists didn't see a problem keeping the SmartSense name on that portfolio. Wonder why since there are more letters in that than Lumenos.

[OneMorePolicy]

Originally Posted by Dave020

So, basically right now if you send a prospect to the PF to run comparison and quote, the first plan they see is not the Lumenos, so they are gonna call/e-mail and ask both about the odd pricing and why does it say on the default option that preventative care is after deductible when you told me it was before deductible. Ugh!

Also, and this eats my shorts, when they brought in whatever "agents" were involved in the design (I know I wasn't invited), these rocket scientists decided that it would "simplify" the process to eliminate the Lumenos brand name from the Plan Finder.

So, not only do your prospects not know which plans are the Lumenos plans, but they might be looking at the default option that comes up which is, for some strange reason,