Limited Benefit Plans

[arnguy]

Have you noticed recently that some well known and respected IMO's have added limited benefit health plans to their portfolio? What is the health insurance field coming to? I know---Obamacare!

 

[Briefcaseboy]

I think a limited benefit plan would be better than nothing, however, it should be made known to the prospect that the benefits are LIMITED and is NOT a major medical plan......something else I have wondered about, I want some comments on this......let's say you need heart surgery, the hospital asks if you have insurance, you say yes here is my card ( it is limited benefit ) they take it, make a copy of it etc., then you have the surgery. Well even though it is limited benefit, the card was enough to get you admitted and the surgery saved your life. Now you may be facing a tremendous hospital bill, but at least you are alive and walking around. So my question is this, would it be good to have limited coverage if for no other reason than the fact you have a card showing you have health insurance ?

 

[Yagents]

I choose to not sell LB plans, I don't care for the late night client call, crying their eyes out because they are not getting the care they need or it financially wiped them out. If you must sell it, have the client sign a disclaimer form. You'll sleep better, and your E&O costs will be minimized.

Briefecase, I agree with your comments, but it's a crap shoot. A number of facilities are demanding payment if not life threatening. The hospital does call and verify coverage, and the type of plan. But what's funny, is the hospital staff has no idea how the insurance side works, or the terminology. Ex: We went to ER a few months ago, I handed over my card, my son got the care. I have a 10k HSA. 30 min later, staff comes in and states they called my insurance company, and "I do not have any copay" for the ER visit, so no money is due at this time. I laughed and thought about the fricken idiots we have in the system.

 

[Frank Stastny]

I think a limited benefit plan would be better than nothing, however, it should be made known to the prospect that the benefits are LIMITED and is NOT a major medical plan......something else I have wondered about, I want some comments on this......let's say you need heart surgery, the hospital asks if you have insurance, you say yes here is my card ( it is limited benefit ) they take it, make a copy of it etc., then you have the surgery. Well even though it is limited benefit, the card was enough to get you admitted and the surgery saved your life. Now you may be facing a tremendous hospital bill, but at least you are alive and walking around. So my question is this, would it be good to have limited coverage if for no other reason than the fact you have a card showing you have health insurance ?

Since I don't work this market, would you consider the products United American sells as one of these? And, are you suggesting that it is better than nothing if the person can't get or afford or get a major medical plan?

I'm asking, not because I'm interested in selling them but because there has been a lot of discussion in the past on this subject.

 

[dgoldenz]

The number of people who get more back from a limit benefit plan than they pay in is probably between 0 and 1%. The number of people who buy a limited benefit plan and think they have real health insurance because they were misled by the "agent" is probably between 90 and 98%. Do they even require an insurance license to sell these plans?

 

[LGilmore]

the thing about using a disclaimer with the sale of a LB plan. Do you have time and money to defend, defend and defend some more as clients "forget" or "were tricked" into the sale because they did not know what they were signing?

Is it worth the hassle? Is it worth your E&O carrier dropping you because they're tired of defending you? Even a "win" costs money.

 

[AllGold]

I think a limited benefit plan would be better than nothing, however, it should be made known to the prospect that the benefits are LIMITED and is NOT a major medical plan......something else I have wondered about, I want some comments on this......let's say you need heart surgery, the hospital asks if you have insurance, you say yes here is my card ( it is limited benefit ) they take it, make a copy of it etc., then you have the surgery. Well even though it is limited benefit, the card was enough to get you admitted and the surgery saved your life. Now you may be facing a tremendous hospital bill, but at least you are alive and walking around. So my question is this, would it be good to have limited coverage if for no other reason than the fact you have a card showing you have health insurance ?

For anything major, I really do NOT think a limited plan is better than nothing. It just gives them a false sense of security. They think they have health insurance but it really isn't insurance. Maybe a "health maintenance plan" but not health insurance.

And I'm not sure when the hospital calls and finds out it's not real insurance and it will pay 4% of the total bill that they will admit you and perform the procedure without your own money up front.

I just haven't been able to bring myself to drink the koolaid on limited plans. The only argument I have heard in its favor that makes even a little sense is for people who have no assets to protect. Like a husband and wife with a low income, no savings, no house, etc. The limited plan will pay for their doctors visits and maybe a little for Rx. But if something big happens there is no difference to them between owing $10K (what their deductible would be on a major med) and $100K; they can't pay it either way.

But like I said, I just can't bring myself to recommend a limited plan and whenever I explain the difference to a client, they're not interested either. If they absolutely can't afford major med, they almost always want to go without completely.

Ex: We went to ER a few months ago, I handed over my card, my son got the care. I have a 10k HSA. 30 min later, staff comes in and states they called my insurance company, and "I do not have any copay" for the ER visit, so no money is due at this time. I laughed and thought about the fricken idiots we have in the system.

I think that's really the only way they can do it. You're going to get the network discount and the hospital has no way of knowing what that will be until they submit it to the insurance company and it gets repriced. I suppose it would be better if the hospital made it clear that you will be paying out of pocket later "we just don't know how much yet."

 

[NCAgent]

Would the limited benefits plan be useful for people who don't have standard health insurance just to allow them to have certificates of coverage for underwriting? Some people get better plans with coverage lasting a year or so, or in NC if you have 16 or 18 months of coverage then you get certain benefits as well.

Maybe it would help those people? Although it probably would fall into that 0 to 1% range...

 

[somarco]

Would the limited benefits plan be useful for people who don't have standard health insurance just to allow them to have certificates of coverage for underwriting?

They are not considered creditable coverage if that is where you are going with this.

 

[NCAgent]

They are not considered creditable coverage if that is where you are going with this.

Yes that was where I was going with this. So what do people who need insurance for like 30-90 days do for coverage? Underwriting can take that long for some people...