Limited Benefit Insurance Plans

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Limited Benefit Insurance Plans
Steve Daiber, CLU, ChFC, CEBS, CFP Regional
Group Manager March 11, 2008 Presented by
Symetra Life Insurance Company 777 108th Ave NE,
Suite 1200 Bellevue, WA 98004-5135
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Agenda

• Introduction and Objective
• Myths and Facts
• Who Are the Uninsured?
• Why Is Health Insurance So Important?
• What Is Limited Benefit Insurance?
• When to Use a Limited Benefit Insurance
  Plan
• Questions

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Objective
This course will teach you the basics of limited
benefit insurance plans  how they work and when
they should be considered.   You will also
learn tips to help determine whether limited
benefit medical insurance is the right product
for your client.
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47 million people 15.8 percent of the total
U.S. population were uninsured in 20061
1 "Income, Poverty, and Health Insurance Coverage
in the United States 2006." U.S. Census
Bureau, August 2007, table, p. 21.
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Uninsured Myths and Facts
MYTH It doesnt matter if someone has health
insurance. FACT The Institute of Medicine
estimates 18,000 to 22,000 Americans die each
year because they dont have health
coverage.1 MYTH People without health coverage
are unemployed. FACT Eight out of 10 of the
uninsured are in working families.2
1 Final Report Release Event Insuring
America's Health Principles and
Recommendations. Institute of Medicine, January
14, 2004, and Dorn, S. "Uninsured and Dying
Because of It Updating the Institute of Medicine
Analysis on the Impact of Uninsurance on
Mortality." Urban Institute, 2008. 2 Calculated
from Fronstin P. "Sources of Health Insurance and
Characteristics of the Uninsured Analysis of the
March 2007 Current Population Survey." Employee
Benefit Research Institute, October 2007, figure
9, p. 12.
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Uninsured Myths and Facts
MYTH Most people without health insurance are
poor. FACT Only one-quarter of the uninsured
live below the federal poverty level.1 MYTH
Most people working for a large employer
have health coverage. FACT In 2006, 22.4
percent of the nations uninsured workers age 18
to 64 were in firms employing more than 500
people.2
1 Employee Benefit Research Institute estimates
from the March Current Population Survey, 2007
Supplement. 2 Calculated from Fronstin P.
Sources of Health Insurance and Characteristics
of the Uninsured Analysis of the March 2007
Current Population Survey." Employee Benefit
Research Institute, October 2007, figure 11, p.
14.
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Who Are the Uninsured?
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Who Are The Uninsured?

• Forty-seven million people in the U.S. lack
  health coverage, including more than 9 million
  children.1
• The uninsured come from every community, every
  walk of life, every race and every ethnic group.

1 Income, Poverty, and Health Insurance Coverage
in the United States 2006." U.S. Census Bureau,
August 2007, table 6, p. 21.
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Working Families
Most uninsured Americans are in working families
17.2
19.3
63.5
Source Employee Benefit Research Institute
estimates from the March Current Population
Survey, 2007 Supplement.
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The Uninsured
Uninsured nonelderly adults by age, 2006
Source Employee Benefit Research Institute
estimates from the March Current Population
Survey, 2007 Supplement.
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Why Working Families Are Uninsured

• Lack of access to employer-sponsored plans.
• Rising healthcare rates.

Source Committee on Education and the
Workforce, October 7, 2004, http//edworkforce.hou
se.gov/issues/108th/recess/ahps.htm American
Medical Student Association, May 12, 2005.
http//www.amsa.org/cph/CHIPfact.cfm
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Why Is Health Insurance So Important?
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Effects of Being Uninsured

• Health consequences
• Uninsured women are more likely to have poor
  outcomes during pregnancy and delivery than are
  women with insurance.
• Adults without coverage less frequently get the
  care they need and are more likely to suffer poor
  health and premature deaths than are adults with
  coverage.
• Children who are not covered often do not get
  routine medical or preventive care.

Source Institute of Medicine of the National
Academies, Health Insurance Is a Family Matter,
National Academies Press,
Washington, DC 2002
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Effects of Being Uninsured

• Financial consequences

• More than half of uninsured working-age adults
  report serious problems paying medical bills,
  compared with less than a quarter of insured
  adults.1
• Medical bills are a factor in nearly half of all
  personal bankruptcies filed.2

1 Institute of Medicine (2004). Uninsurance Facts
and Figures. January 14.
2 Institute of Medicine, A Shared Destiny,
Effects of Uninsurance on Individuals, Families
and Communities. March 2003
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What Is Limited Benefit Insurance?
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Limited Benefit Insurance Plans

• A limited benefit insurance plan allows employers
  to choose the benefits they want to offer at a
  price they can afford.
• While they are not major medical insurance,
  limited benefit insurance plans can offer
  employers dozens of benefit and price
  combinations, allowing them to choose from a
  variety of high-utilization benefits, including
  first-dollar coverage for
• Doctors office visits
• Hospitalization
• Prescription drugs
• Wellness benefits

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Medical Program Comparisons

• Limited Benefit
• Insurance Plans
• Not comprehensive
• Less expensive than a comprehensive plan
• Typically pay first dollar

• Major Medical Plans
• Comprehensive medical plan
• More expensive than limited benefit plans
• Most plans have co-pays or deductibles

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Why Use Limited Benefit Insurance Plans?

• Employee benefits
• Provides access to routine medical care.
• Cost-effective for routine care.
• Emphasizes services used most often.
• First-dollar coverage.
• No elimination period, deductibles, or co-pays.
• No preexisting condition limitations.

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Why Use Limited Benefit Insurance Plans?

• Employer benefits
• Can offer to full-time, part-time or seasonal
  employees.
• May help with recruitment and retention.
• May result in happier, healthier employees.

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When to Use Limited Benefit Insurance
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When to Use Limited Benefit Insurance

• An option for underinsured or uninsured
  employees.
• When clients are faced with the possibility of
  eliminating their benefits due to increased
  costs.
• Interim coverage for employees waiting for their
  major medical coverage to begin.

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When to Use Limited Benefit Insurance

• When employers want to offer benefits without
  contributing to the cost of coverage.
• When employers need to reduce the cost of their
  medical plan.

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Questions to Ask

• Is there dependent access to coverage?
• What is the range of benefits?
• Are there preexisting condition limitations?
• Is the contract easy to understand and
  communicate?

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Questions to Ask

• Can the entire group be covered?
• Does the plan include deductibles?
• Are the coverage caps independent?
• Are the benefits coordinated?

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Questions?
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Thank You