Insurance Agent Forum

[Bob_The_Insurance_Guy]

HSA's are undersold.

It has nothing to do with premiums, OOP's or MOOP's, copays, etc.

It actually has nothing to do with insurance.

HDHP's are telling the consumer, "Hey, you are now in charge of how/when/with whom you spend your healthcare dollars. This means you may have to pick up the phone in the beginning, and ask around for the best deal - like buying a HDTV. No one is going to make that decision for you anymore, and you will be held responsible for it."

Scary stuff to a society of, "Pay only X and you get access to everything."

People like being in control, as long as someone else is assuming the risk for the decisions.

I don't sell them on premium savings, OOP's etc. I take insurance out of it all together, and make them see how they have control, and what benefits/consequences come with that responsibility.

They, like LTC, will continue to be undersold, as long as we only concentrate on the premium savings aspect.

[healthagent]

What we need now is price transparency. Need a MRI? Go to a website and compare rates.

[Bob_The_Insurance_Guy]

That's coming sooner than you think. In some areas, you can do that now. Mostly for the smaller stuff.

You can always call the insurance companies Claims Department. Yes, I said Claims Department, and ask what a certain procedure has been going for in your area recently. You will maybe get a range, but it will give you a starting point.

[healthagent]

I'm already using doc-in-a-box services. When my son needs to see a doc we take him to Nighttime Pediatrics. I just took my wife to Minute Clinic.

Their rates are posted and we know exactly what we're going to pay. We also don't have to sit in an over-crowded waiting room.

For all regular family stuff; ear infections, flu, etc...I will never again see the family doctor.

[MHart]

Originally Posted by Bob_The_Insurance_Guy

HSA's are undersold.
I don't sell them on premium savings, OOP's etc. I take insurance out of it all together, and make them see how they have control, and what benefits/consequences come with that responsibility.

They, like LTC, will continue to be undersold, as long as we only concentrate on the premium savings aspect.

Good stuff I am pretty much an HSA guy myself roughly 80 percent of my business.

One point about price that know one goes over or very few people go over, though is if they have a 2,500 deductible with 2,000 coinsurance so 4,500 worst case scenario for 400 dollars what will the price of that plan be next year you shop to another carrier or raise the deductible to 5,000 so now the worst case scenario is 7,000 for an individual and the price is now 15% to 20% more expensive.

So why wouldn't you show them an HSA plan for 250 with a 3,000 or 5,000 dollar deductible put the savings in the HSA account then they have money put aside for that worst scenario. So when they do get a rate increase on their HSA plan they don't have to switch deductibles they can raise their deductible because they have money for the what if situation in the HSA account so raising their deductible seems more feasible.

On the co-pay plan they are paying a higher premium and don't have money saved for the worst case scenario so you just keep raising that deductible to save on premium and keep raising their out of pocket each year. Seems pretty simple when you explain to the prospect this way.

Bob I like your points and will begin using some of them thanks for sharing that.

[somarco]

Since I only offer HDHP's with 100% after the deductible, I always set the deductible at or near the TOTAL OOP (including the deductible).

When they tell me they want a $500 deductible like they had at work I ask when was the last time they hit that deductible.

Almost always it was when they had a baby.

If they are not having any more babies then it only makes sense to move to the higher deductible. Heck even if they are they can't find a plan with maternity with less than $1000 out of pocket and most are in the $3000 range for maternity claims.

They also don't realize their liability doesn't stop at the deductible. At least not until I point it out to them.

So you are right Marc. That $2500 copay plan has $4500 OOP per person. Run it up against an Aetna $5k HDHP or even a $5800 or so HDHP from GR or H1 and see how their eyes light up at the savings.

FWIW, I never mention the HSA. Just present the plan and explain the difference in the INSURED portion. Once they grasp the insurance part then I casually mention the tax benefits of the HSA side.

I like what #2 said as well about taking charge of your health care dollars. I don't mention that angle often enough, but I should.

[LGilmore]

Are any of you guys setting up the funding for the HSA account?

Isn't that part of the plan and your responsibility? Yes? No?

When I factor in the nickle and dime costs of the "savings" account with the premium for the HSA, the savings in monthly premium aren't significant enough because what used to go to premium now goes to a banker or financial services company who either skims returns or has a fee schedule that reads like war and peace.

The market is probably right where it should be for HSA's. They've been flat sales wise along time. They have their niche and their customer.

In group companies have to decide how much they want to piss off their employees and more importantly their spouses.
Explaining the family deductible (yes, I know about embedded ds too) that has to be hit for anything to get covered is a wonderful conversation.

Also the savings concept came out when the market was only going "up" what now?

It works for some, it's another option. Doesn't sell here at all. Too closely priced to copay plans.

[MHart]

Yes I assist my clients in finding Bank administrators that have little or no fees one that comes to mine is Baytree Bank.

Also since when is money saved money spent?

[bill3173]

Originally Posted by somarco

List bill is not the same as the group market.

Fully insured carriers, particularly those that market mostly or exclusively to employers with fewer than 300 lives have no idea how to parse the data and apply tier rating. They usually segregate the under 50 market from the rest and block underwrite.

They fail to account for differences in plan design (as indicated by ABC) or even segregate by industry. All cases from 50 - 300 lives written in the first quarter of 2007 are showing a PLR of 105% so all cases in that block will receive X% rate increase at renewal. They may temper some of the renewals a bit based on past or ongoing claims, but for the most part they treat all those groups as being equal.

The intelligent thing to do is to at least apply tier rating on renewals and give greater or lesser increases to the higher/lower loss ratio groups.

Almost no one does that.

If they were to look at the HRA/HSA block separately from the copay plans my guess is they would see more favorable loss ratio's and lower admin costs (less claim frequency) than on the copay plans.

Thanks for the answer, I knew that you would have a good one.

I mentioned list bill because I wanted to brag about the unexpected addition to the group of Ind. policies. It surprised me that this company is growing and continuing to add employees with families and deep pockets for health insurance.

I just don't seem to have the time for group and consequently know very little about it, other than the hanful of small groups that I have placed, which I have now stopped handling any new business. When I get those requests, I do the preliminary work(census forms, plan, etc.), and then pass it on to my compadre up North who lives for the group business.

Taking this one step further, who do you feel has the best uw over all for group business in the 2 - 50 range? If you don't think that you should answer that, I understand.
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Originally Posted by somarco

When they tell me they want a $500 deductible like they had at work I ask when was the last time they hit that deductible.

Almost always it was when they had a baby.

Consider yourself blessed. I have had two cases in the last 6 months, where the deductible and OP max have been hit and the bills are climbing. Its been very sobering.

In both cases PI uw was done, and the carriers(different) came up empty handed and have to pay. Thank God.

[Mac1958]

I have an HSA for my family and I like it. It works precisely as it's supposed to. And, as expected, I've noticed discounts, especially at pharmacies.

Unfortunately, utilizing an HSA properly also requires a measure of personal responsibility and planning. And as we all know, personal responsibility is generally no longer considered a "good" thing in our country. It's much "better" to let the government "take care" of us, which is what we're going to get beginning next year.

A friend of mine is an administrator at a local hospital. He says their bad debt ratio has skyrocketed since HSA's have entered the market. People aren't paying their deductible, they're just letting the HSA kick in at $2500 or $5000 or whatever their deductible is, then stiffing the hospital for the rest. He loved the idea of HSA's, now he hates them.



...

[healthagent]

I'm not sure I follow with more hospital bills not being paid. On a PPO plan they still owe their deductible and coinsurance. It's not like hospitalization is a copay.

[moonlightandmargaritas]

Originally Posted by Mac1958

A friend of mine is an administrator at a local hospital. He says their bad debt ratio has skyrocketed since HSA's have entered the market. People aren't paying their deductible, they're just letting the HSA kick in at $2500 or $5000 or whatever their deductible is, then stiffing the hospital for the rest.

Not saying people should stiff the hospital, but on a $100,000 to $200,000 bill/claim, my guess would be that there is some fat in there.

An $85 aspirin comes to mind...

[healthagent]

8 most common hospital billing errors - MSN Money

[somarco]

setting up the funding for the HSA

No.

I suggest banks to review. Leave the decision to fund, or not, up to them.

I do enough work for free. Can't see getting too involved in another hobby.

nickle and dime costs of the "savings" account

The costs are nominal, and usually disappear with a balance around $1500 or less.

The tax savings can be dramatic. But only if they fund the account.

I ask a question and pose an example to get them thinking about funding the account.

How much did you spend last year on OOP expenses for medical, DENTAL and VISION?

Most don't know. Some will guess and they usually guess low. I point out that most have $500 in medical, the same in dental & vision. That is $1500 per person.

Their situation may be more or less but it forces them to think.

Then is point out how the HSA contribution works.

Say you make $100,000. If you only put $5,000 in your account your income on page 2 of your 1040 is reduced to $95,000 before you take deductions for itemized expenses and personal exemptions. If you are in a 25% tax bracket, you have immediately saved $1250 in tax dollars.

Money you keep rather than sending to Washington.

That usually leads to other questions. The most common is, what happens to the money at the end of the year. They confuse the HSA with FSA.

best uw over all for group business in the 2 - 50 range?

Hard to say.

In my area they are all pretty much the same for the under 10 market. As you get closer to 50 the spread changes.

two cases in the last 6 months, where the deductible and OP max have been hit and the bills are climbing. Its been very sobering.

Yes it is.

Called a client about some renewal options a few weeks back. I had emailed a proposal comparing his current plan to a competitor that could save him close to $100 per month.

I don't churn biz, but I do feel an obligation to let them know I am working for them.

When I called to follow up he was impressed. Times have been tough and they could use the $100 savings.

Then came a question that set me back on my heels.

"Will we need to go thru underwriting?"

Yes, why do you ask.

Seems he and his wife both had cancer claims in January. They hit their family deductible. Since then GR has paid everything, just like I told them it would.

He was very pleased and said he tells everyone about his plan and recommends me to friends & coworkers.

bad debt ratio has skyrocketed since HSA's have entered the market. People aren't paying their deductible, they're just letting the HSA kick in at $2500 or $5000 or whatever their deductible is, then stiffing the hospital for the rest

Don't blame the HSA.

Those are the same folks that would stiff the hospital on a lower deductible with coinsurance.

If their bad debts are increasing it is because of economic conditions, not the HSA.

[bluemarlin08]

When HSA's first entered the market, some companies inferred that future rate increases should be less on HDHP than co pay plans. From my experience that hasn't happened, %rate increases are very similar to CP plans.