Health Plans Target Individual Market With New Products
A growing number of health insurers are creating individual plans that target people in their 20s and 30s or early retirees who are not yet eligible for Medicare, the Wall Street Journal reports.
The new products are being developed in part because many employers, especially smaller businesses, are dropping or limiting health care coverage. Many of the new individual plans have high deductibles and low monthly fees, while some of the less-costly plans exclude expensive services such as maternity care. In addition, some plans encourage preventive care by not charging copayments for screenings and checkups, and some cover only generic versions of prescription drugs.
John Garamendi, California's lieutenant governor and the state's former insurance commissioner, is critical of these products, including WellPoint's low-premium, high-deductible Tonik plan.
He said, "The Tonik program is specifically designed to create a significant profit for the insurance company," adding, "It is designed to cover everything that a 19- to 34-year-old is not going to need. That happens to be the principal childbearing age, and it doesn't cover pregnancy."
WellPoint spokesperson Christi Lanier-Robinson said that other WellPoint plans cover maternity for those who are considering pregnancy and that 70% of every Tonik premium dollar goes toward medical care. She said, "There is a sizeable portion of the population who are not interested in maternity coverage and don't want to pay for this benefit."
According to the Journal, in two states where Tonik was introduced this year, the plan has accounted for 20% of new sales. Other companies selling individual health plans targeted at these two groups are Aetna and Humana, according to the Journal.
The new plans typically are available in states where regulations are less stringent, allowing the insurers to "choose the healthiest people as customers," the Journal reports. As a result, the plans "won't necessarily reach those among the roughly 45 million uninsured Americans most in need of health coverage," according to the Journal (McQueen, Wall Street Journal, 8/21).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.