Question for CA health agents on family deducts

al3 · 08-13-2007, 11:24 PM

http://www.answer123.com/deductible1.pdf

Above is a great little PDF used by Aetna to explain how their family deducts work in CA.

Can one of the other CA agents here tell me if both the Blues work their family deducts the same way?

I've not sold any family plans for the Blues... just individuals. I've never quite understood how their family deducts actually work in practice. Clients tend to think that if it is a $10,000 FAMILY deduct that no benefits are paid to anyone until $10K is met. It's not true with Aetna, but is it true with the Blues here?

Thanks,

Al

insuremojo · 08-14-2007, 12:41 AM

Most of the health companies treat the deductible the same way. 2 family members to satisfy the family deductible. At least in CA anyways.

Here's a little pdf for the "ppo share" plans for blue cross.

http://www2.bluecrossca.com/pdf/agen...NEW%200207.pdf

al3 · 08-14-2007, 02:40 AM

After a bit of research and a few PMs from some members here I find that both Blue Cross and Shield do things the same way:

HSA plans: aggregate deductible. If family deduct is 10K, no one gets major-med benefits until that limit has been reached... no matter if one person hits the mark or a combo of two or more reach it.

PPO co-pay: a 'per member' method. The PM might be $2000 and the family is usually double, or $4000. If one person hist $2K they get their benefits above that. The next person or combo of persons have to hit 2K and everyone is covered.

I may not understand the numbers that well, but it seems that the HSA method is not as client-beneficial.

Aetna does their HSA better, IMO (see previous PDF in post above).

Nationwide does ALL their plans using a aggregate family deductible, from what I can tell.

And you know something? These carriers DO NOT go to any great length to explain how deducts work on the HSA plans. They kind of let people ASSUME that these plans work like the per-member co-pay plans. Lumenos is the worst. They don't even use the word 'deductible' and confuse everyone with "bridge."

If I could run a DOI I'd stipulate in no uncertain terms what HAS to be in plan summaries... and the first thing would be a clear explanation of how the deducts work... with easy to understand examples. Aetna seems to come closest to this.

Al

insuremojo · 08-14-2007, 06:30 PM

Al3,

Interesting how Aetna does their HSA's so differently from most other carriers, I admit when I sell HSA's it's usually Nationwide or BlueCross. Don't sell any Aetna HSA's but I may want to look them over a little closer.

Nationwide is pretty similar to BlueCross & BlueShield because their deductibles are treated the same as their HSA's and copay plans. Not aggregate for all plans just the HSA's.

Good info al3.

Dave020 · 08-14-2007, 07:17 PM

All Blue Shield CA IFP Spectrum PPO plans:

"The family deductible can be met by any family member of combination of family members"

Same as Aetna, abd Blue Cross has aggregate on all Lumenos plans now, not on the PPO Share plans which still require 2 members to his their deductible and OOPM.

Dave

Dave020 · 08-14-2007, 07:45 PM

Here's a simple breakdown:

Blue Cross PPO Share Plans:

2-member maximum - two members must hit the dedutible to satisfy the family requirement

Family Ded - $4,000
Mom - $2000
Dad - 1000
Son - $500
Daughter - $500

Even though it's $4000 for the family, until one of the other three break the $2000 on their own, only mom is has met the deductible. All others stay under it until #2 person hits it. So the other three could all be at $1995 and all still be under the deductible except mom.

Blue Cross CA - Lumenos

Aggregate deductible, all family members count.
$4000 Deductible plan
Mom - $2000
Dad - 1000
Son - $500
Daughter - $500

Since the total for all four members equals the family deductible, it has been met and no further deductible applies to the whole family. Since Lumenos sets deductible equal to OOPM, this family has covered the "bridge" and is getting everything at 100% for the remainder of the calendar year.

Blue Shield CA Spectrum PPO plans

Aggregate deductible and OOPM.
$4000 family deductible
Mom - $2000
Dad - 1000
Son - $500
Daughter - $500

Like Lumenos, this family has met the required family deductible under this scenario and is in the coinsurance portion of the plan for all members. Since no Spectrum plan sets OOPM equal to deductible, each member of this family is now doing a 70/30 split on major services. OOPM can be hit the same way by any combination of members in this family.

Health Net CA PPO plans are mixed bag - HSA plans are aggregate, SimpleChoice non-HSA PPO are 2-member max meaning two family members must hit.

Blue Cross CA PPO Share plans and Health Net SimpleChoice non-HSA PPO are the most disadvantageous in this regard as they do not take into account any aggregated expenses and require two members to hit the deductible.

Those which are aggregate can be hit by one member who runs up big bills. There is a real advantage to me in the aggregate deductible design.

Dave

MHart · 08-14-2007, 08:04 PM

Originally Posted by al3

I may not understand the numbers that well, but it seems that the HSA method is not as client-beneficial.

Al

Total exposure is what makes an HSA better take Blue Cross HSA vs. Blue Cross PPO Share

7,000 dollor total family exposure
PPO Share 2500 would be 5,000 dedcuctible plus OOP at 7500 per member (2 members satisfy the requirement)

Dave020 · 08-14-2007, 09:15 PM

This thread has made me somewhat nostalgic for the old days LOL.

When I first started in health insurance (in the last millenium), Blue Cross CA had four PPO plans on the IFP portfolio:

$10 copay
$20 copay
$30 copay
$40 copay

No deductibles and OOPM was low like $2500 on all plans. The $40 was actually underpriced and was one of the drivers for the change to "planscape" i.e., the current share plans portfolio. I miss those old plans and actually still have a client on the HIPAA version of PPO $40 copay to this day.

Dave

al3 · 08-14-2007, 09:55 PM

Originally Posted by Dave020

Those which are aggregate can be hit by one member who runs up big bills. There is a real advantage to me in the aggregate deductible design.

I disagree. Most HSA plans have a family deduct that is 2x the individual amount. Since most people don't make (hit) an individual deductible, I see even less chance that a family will hit double that.

When I write a Cross/Shield HSA (say a $4k indiv/$8K family deduct) for a husband and wife (usually an older couple with no kids at home) I put them each on their own plan as I see a better chance of dad hitting the mark or mom needing $4K of med services, but I don't see both of them together hitting double-the mark. Even a family of 3 makes sense to have the kid on his/her own plan. A family of 4? Well if you're talking about younger adults with two young kids I'm not sure that even 4 people will hit the $8000 COMBINED. I've love to see UR stats on family vs. individual.

If you're talking about a family of 4 or 5 children, than I can see them using more than $8,000 a year of medical services.

The only time the family deduct really makes sense is if one member has something really bad happen and hits the $8k mark early in the year (like in January) and the rest of the family gets "free" health care for that year.

Al

Dave020 · 08-14-2007, 10:08 PM

Yes, but with aggregate deductibles one member can hit it for everyone. That is a big issue. Both may not hit the 4000 on your example, but if one hits 10000, satisfies for both on aggregate plans. Aggregate is "any combination" meaning one or more people.

If you separate them, one they will pay more premium most likely - calculate 2 singles versus party of two, bet party of two comes in cheaper. Also, you are forcing them into a mandatory double deductible situation (they WILL have to pay 8000) whereas on an aggregate plan, while they have to hit it anyway, one person can do that. Remember, aggregate does not have a two-member max. Why should one spouse be paying expenses under a deductible if the other spouse has racked up 20k in inpatient/outpatient charges?

Dave020 · 08-14-2007, 10:24 PM

To amplify, this is directly for the Blue Shield CA Spectrum PPO Savings Plan brochure, page one

"The family deductible can be hit by any family member or combination of family members"

If you split them, you have forced both to make the deductible regardless of the usage of either member. I'd be a little pissed if my wife had racked up 100k hospital bill and I was still paying 100% NFR under my deductible for an outpatient procedure. One spouse with a big bill can meet the entire families deductible thus not exposing the other members(s) to have to meet theirs. If you split a family of three, that is a mandatory three deductibles for everyone to meet. Keep them together, one member can blow through it for all. Believe me, this is a big deal, I have had people on BCC plans where everyone but one was below the required deductible and since those are 2-member max, no one else could escape the deductible. Yet the one who had met it had racked up enough to meet for the entire family.

Rates:
Spectrum Saving 4000 Couple no kids 55-59
Region 4, Tier 1 Single subscriber 55-59: $261 (x2) = 522.00
Region 4, Tier 1 Party of Two 55-59: $507.00 (saves $180 per year)

Exposure under deductible first way, $8000, second way $8000
Premium savings is the issue here

Spectrum Savings 4000 Family of Four 35-39
Region 4, Tier 1 with kids out on youthcare rates: $258.00
(168 for parents plus $45 each kid youthcare)
Region 4, Tier 1 family rate: $259.00

Exposure under deductible first way, $16000, second way, $8000

If I found out you saved me a buck a month and subjected me to $16,000 instead of $8000 in deductible, well, you get the idea.

Dave020 · 08-14-2007, 10:31 PM

Originally Posted by al3

I disagree. Most HSA plans have a family deduct that is 2x the individual amount. Since most people don't make (hit) an individual deductible, I see even less chance that a family will hit double that.

Again, yes but what if one person has an inpatient stay for a day? How much are hospitals in your area, 'round here they run about $5,000 a day! Hell, tylenol is $200 a pill there.

If nobody hits it, good, roll the HSA account over to the next year. Good news, you're healthy. But why force more than one person to HAVE to hit it?

al3 · 08-14-2007, 10:34 PM

Yes, but with aggregate deductibles one member can hit it for everyone. That is a big issue.

Sure, but the odds of that happening are way less than one person hitting half.

Both may not hit the 4000 on your example, but if one hits 10000, satisfies for both on aggregate plans. Aggregate is "any combination" meaning one or more people.

Yes, but you have to go with the odds. My bet is that the odds are much, much, much higher that one person can hit an individual more often than one OR two people hit a family deductible.

If you separate them, one they will pay more premium most likely - calculate 2 singles versus party of two, bet party of two comes in cheaper.

Lets run the numbers. On Blue Shield 4000/8000 a 50 year old couple pays $213 each for their own plan. That's $426 a month out the door and each has a $4k deduct.

If they get a family plan for the two of them the rate is $411 and they have to hit an $8k deduct. It cost them $15 more a month to each have their own plan and the lower deduct and the better odds (my guess) that they will get some benefits from the plan.

Also, you are forcing them into a mandatory double deductible situation (they WILL have to pay 8000) whereas on an aggregate plan, while they have to hit it anyway, one person can do that.

I agree... one person CAN do that. One person can win the lottery or a mega-slot jackpot. I simply don't see it happening often enough to make the case for a family plan for a 50 year old couple.

Remember, aggregate does not have a two-member max. Why should one spouse be paying expenses under a deductible if the other spouse has racked up 20k in inpatient/outpatient charges?

I agree, but you've been doing insurance since the dinosaurs roamed in Gilroy. How often have you seen a 2 or 3 person family make a stratospheric family deductible... as opposed seeing an individual make a lower 'single' deduct?

OK, maybe it will happen once to a family. But will it happen often enough such that it is a better 'deal' (more coverage for the buck) to put them in a family plan year after year? Not to me it doesn't. I see your case, but common sense and life-experience tells me your argument is simply not valid.

I lay it out in full orchestration and four-part harmony for my clients and let them make the choice of family vs. individual, and 90% of them want their own plans as well as for their kids.

I think clients are smarter than we in the industry give them credit for. (Of course my clientele is fairly upscale and intelligent... mostly small business and professional types who know how to run numbers.)

Al

Dave020 · 08-15-2007, 12:50 PM

Originally Posted by al3

Sure, but the odds of that happening are way less than one person hitting half.

Um, you do realize that the deductible is independent to each member? Once on hits it that person is done, they don't assume the responsibility for the entire family deductible. However their further expenses do apply to the family deductible under the coinsurance portion.

Yes, but you have to go with the odds. My bet is that the odds are much, much, much higher that one person can hit an individual more often than one OR two people hit a family deductible.

Exactly, that is why it is per member aggregate, not all inclusive. One member can meet everyone's liability, but isn't required to continue under the deductible until the family deductible is met. It's not 8000 someone has to hit it, it's 4000 but the further coinsurance portion can count for the other members.

Lets run the numbers. On Blue Shield 4000/8000 a 50 year old couple pays $213 each for their own plan. That's $426 a month out the door and each has a $4k deduct.

If they get a family plan for the two of them the rate is $411 and they have to hit an $8k deduct. It cost them $15 more a month to each have their own plan and the lower deduct and the better odds (my guess) that they will get some benefits from the plan.

No, no, no. It's 4k each, not 8k each. Family is 8k, same as if they are separate. Once individual hits 4k, they are done with their deductible.

I agree... one person CAN do that. One person can win the lottery or a mega-slot jackpot. I simply don't see it happening often enough to make the case for a family plan for a 50 year old couple.

Again, splitting up increases the deductible. Family of 5 all split up is $20k in total deductible liability versus 8k combined in a family plan. That is a E&O claim just waiting to happen. Try explaining that to a judge.

I agree, but you've been doing insurance since the dinosaurs roamed in Gilroy. How often have you seen a 2 or 3 person family make a stratospheric family deductible... as opposed seeing an individual make a lower 'single' deduct?

OK, maybe it will happen once to a family. But will it happen often enough such that it is a better 'deal' (more coverage for the buck) to put them in a family plan year after year? Not to me it doesn't. I see your case, but common sense and life-experience tells me your argument is simply not valid.

I see it 2-3 times a month with Blue Cross plans that require the 2-member max. A maternity goes a long way to meeting that and that is a pretty standard expense.

Al

I think you are looking at this from the "cherry pick" position of writing apps for healthy, lower expense clients every month who will never get near the deductible unless something catastrophic happens.

I am looking at it from the high-risk position I write and average 45-60 apps a month mostly HIPAA. I know my clients are gonna run up expenses and meet those deductibles, that's why they are on GI plans.

Since I write what everyone else won't or can't, my rule is to protect the client against high liability, not high premium. F*** premium, they are high-risk anyway. I don't want them to have to run into a situation where they are on quadruple deductible because I was trying to be cute.

Aspire · 08-20-2007, 12:07 AM

Originally Posted by Dave020

Here's a simple breakdown:

Blue Cross PPO Share Plans:

2-member maximum - two members must hit the dedutible to satisfy the family requirement

Family Ded - $4,000
Mom - $2000
Dad - 1000
Son - $500
Daughter - $500

Even though it's $4000 for the family, until one of the other three break the $2000 on their own, only mom is has met the deductible. All others stay under it until #2 person hits it. So the other three could all be at $1995 and all still be under the deductible except mom.

Blue Cross CA - Lumenos

Aggregate deductible, all family members count.
$4000 Deductible plan
Mom - $2000
Dad - 1000
Son - $500
Daughter - $500

Since the total for all four members equals the family deductible, it has been met and no further deductible applies to the whole family. Since Lumenos sets deductible equal to OOPM, this family has covered the "bridge" and is getting everything at 100% for the remainder of the calendar year.

Blue Shield CA Spectrum PPO plans

Aggregate deductible and OOPM.
$4000 family deductible
Mom - $2000
Dad - 1000
Son - $500
Daughter - $500

Like Lumenos, this family has met the required family deductible under this scenario and is in the coinsurance portion of the plan for all members. Since no Spectrum plan sets OOPM equal to deductible, each member of this family is now doing a 70/30 split on major services. OOPM can be hit the same way by any combination of members in this family.

Health Net CA PPO plans are mixed bag - HSA plans are aggregate, SimpleChoice non-HSA PPO are 2-member max meaning two family members must hit.

Blue Cross CA PPO Share plans and Health Net SimpleChoice non-HSA PPO are the most disadvantageous in this regard as they do not take into account any aggregated expenses and require two members to hit the deductible.

Those which are aggregate can be hit by one member who runs up big bills. There is a real advantage to me in the aggregate deductible design.

Dave

Yeah we dont need insurance brokers... People can really just figure this stuff out on their own. In all seriousness those who think brokers are just an added expense in the health insurance chain need to read this (the entire thread actually.

al3 · 08-20-2007, 12:17 AM

those who think brokers are just an added expense in the health insurance chain need to read this (the entire thread actually.)

Or... they could read this:

http://insurancesolutions123.com/news/news4b.html

Al