|
| Sample Newsletters | MarketPlace AIS Products & Services |
|
AIS's Health Business Daily
Featured Story December 1, 2008 Blues Plans Launch Individual Products as Market Segment Shows Continued Growth Reprinted from The AIS Report on Blue Cross and Blue Shield Plans, a hard-hitting independent monthly newsletter on business strategies, products and markets, mergers and alliances, and financing of BC/BS plans. By Jill Brown, Managing Editor, (jbrown@aispub.com) Some Blue Cross and Blue Shield plans are launching new individual products or making tweaks to existing offerings in order to attract new customers and comply with new state rules aimed at making individual insurance more affordable. Several insurers say they expect the souring economy to boost sales of individual products. "Historically, when the economy is in a place where jobs are being lost, the small-group business goes down a little and individual business goes up a bit," says Mary Floyd, WellPoint, Inc.'s vice president of individual and senior sales. Blue Cross Blue Shield of Arizona in September launched a suite of five individual products that have premiums as much as 40% lower than the insurer's other individual plans. Despite the lower premium rates, "these are not catastrophic products," says Chris Messner, the Arizona Blues plan's director of product development and administration. "We have up to a $5 million lifetime value on the products." The 1.1-million-member Arizona Blues plan noticed that "we were offering very rich benefits" compared with those of competitors, he says. "There were not as many players [with products] down in the lower rates." Of the five new products, four are PPO-based plans. "We're pretty much more a PPO market than an HMO market," Messner tells The AIS Report. "We have seen a decline in HMO products over time." The Arizona Blues plan launched the products and developed the marketing messages in September, before the financial crisis hit, Messner notes. "So we're looking at how do we change it and how do we tweak it going into the new year," once the insurer has more data about the local impact of the faltering U.S. economy. For now, "with these economic changes still evolving, I still think there's a pretty big demand for the richer benefits, so I think BlueOptimum is going to do better and outpace the other products," Messner predicts. BlueOptimum has the richest benefit package, with copayments rather than coinsurance for many services and the broadest level of coverage among the five new offerings. A male between the ages of 18 and 24 who resides in Maricopa County, Ariz., would pay a monthly premium of $105 for BlueOptimum with a $2,000 deductible, according to the Arizona Blues plan's Web site (www.azblue.com/healthplans/Under65/rates.asp). Customers also "are really gravitating" to consumer-directed health plan models, he adds. Another one of the new products, BluePortfolio, is a high-deductible PPO product that is compatible with a health savings account. That customer would pay $96 per month for BluePortfolio with a deductible of $1,750. WellPoint Expands SmartSense Product WellPoint said Oct. 20 that it is expanding the popular SmartSense individual product to Colorado, with plans slated to take effect Nov. 15. Angela Braly, the insurer's CEO, told investors that the SmartSense product, which was piloted in Georgia and California a year ago, is now generating more than half of the company's new sales in California. Speaking Oct. 22 during a conference call to discuss third-quarter 2008 financial results, she said the insurer will expand SmartSense to more states over the next few quarters. The PPO-based product features a choice of deductible levels ranging from $500 to $5,000. Benefits include three physician office visits at a $30 copayment before the deductible takes effect, with further physician visits at 30% coinsurance after the deductible is satisfied. Members also receive coverage for pharmacy, inpatient, outpatient and emergency room services, with a $7 million lifetime cap. "This is more of a mainstream product aimed at people who aren't looking for bare-bones [coverage], don't need maternity coverage and would like some first-dollar benefits," Floyd says. SmartSense is different from its low-premium, high-deductible TONIK product, which was introduced three years ago and marketed to young adults no longer covered by a parent's policy, according to WellPoint. Colorado premiums for SmartSense, which is aimed at students, early retirees and the uninsured, range from $33 to $178 a month for a healthy adult male. While Floyd declines to offer specific enrollment expectations, she predicts SmartSense will become a "top seller" in Colorado. Meanwhile, Horizon Blue Cross Blue Shield of New Jersey is making changes to its individual products to comply with a new law aimed at making individual insurance products more affordable. "We're hard at work at that, because we think there are some huge opportunities," says Robert Meehan, the insurer's vice president of consumer and senior markets. "Obviously people are getting laid off, unfortunately. This will play into it pretty well for them." Starting in January 2009, New Jersey health insurers will be allowed to take into account the individual's age when setting premiums for individual health insurance products, Meehan says. Up until now, health insurers had to use community rating. The Progressive Familycare law (S1557/A2624) allows insurers to use age rating with a band of 3.5 to 1, he explains. If a carrier's lowest rate for a particular product is, say, $100 per month for a 20-year-old male, the highest rate for that product can be no more than $350 monthly. The New Jersey legislature recognized that enrollment in individual products was falling, Meehan tells The AIS Report. It also looked at the success of another state-regulated individual insurance product that uses age rating. For that plan, "we were successful in getting lot more people below the 'pivot age' to buy into the plan." The pivot age, an actuarial term, is the age "below which you're advantaged and above which you're disadvantaged because of age rating," he explains. "Right now, the average age in community-rated plans tends to be very high," he says. "So if you can bring the average age down by enticing [younger] people" to purchase the product, rates ultimately will come down for everyone. But, Meehan concedes, "that will take time." Excellus Holds Insurance Screenings In an effort to boost enrollment in state-sponsored individual insurance plans, Excellus Blue Cross Blue Shield is holding free health insurance screenings for uninsured individuals across its service area. Excellus staff members will help residents review eligibility for programs including Healthy New York and managed Medicaid. Excellus representatives also are helping eligible individuals complete the necessary paperwork. "We saw a need
in many of our service areas and embarked on a marketing campaign around
back-to-school time to reach this population, who were more likely to
sign up for health insurance when their kids needed physicals and immunizations
to get ready for school," explains spokesperson Joy Davia. The
insurer targeted 30 counties using television ads. "These marketing
efforts were new, and prompted by our own research that showed that
there was a population of uninsured children and adults in these counties
who could benefit from our safety-net products, including Family Health
Plus and Child Health Plus." |
| ||||||||
