Back in the good old days—just a few short years ago—it was possible to sell clients a health plan that checked all of the boxes:
- a low deductible and low out-of-pocket exposure,
- low up-front copayments for doctor visits and prescriptions, and
- a reasonable monthly premium.
No more. Nowadays, it’s difficult to find a plan that meets even one of these criteria that are important to clients; meeting all three is nearly impossible.
For that reason, agents are forced to piece together solutions for their clients. Often, this means selling them less comprehensive health insurance to keep premiums under control and supplementing the health coverage with other solutions that help to reduce the client’s out-of-pocket exposure while still giving them access to care when they need it.
To create these “multi-part health plans” for our clients, it’s helpful to divide their health care expenses into three categories: catastrophic, mid-level claims, and up-front services.
Today’s health plans do a good job of meeting this need. While some might limit members to in-network providers and require referrals for all non-emergency care, many of the plans being sold in 2019 do not have up-front copayments for doctor visits and prescriptions; instead, members must meet a relatively high annual deductible before their insurance kicks in and an even higher out-of-pocket limit before their claims are covered in full. These plans are far less comprehensive than they were in the past, and, while we often hear the term “High Deductible Health Plan,” calling these plans “Catastrophic Coverage” might be more accurate. They serve their purpose as insurance—to protect against big, unexpected claims that could wipe the insured out financially—but they don’t typically pay for lower-cost services.
While our clients might prefer more comprehensive plans, they either aren’t available or aren’t in the budget, so we must look outside the health plan to help cover doctor visits and prescriptions as well as the first few thousand dollars in medical expenses.
While today’s catastrophic plans might cover all medical claims above seven or eight thousand dollars, most Americans would have trouble scraping together their portion of the bill. In fact, we hear stories all the time about people with health coverage who are forced to file for bankruptcy after a big medical procedure. It’s clear that our clients need protection beyond what their health insurance provides; they need help meeting their deductible.
That’s where supplemental coverage can be a good fit. Specifically, accident and critical illness policies can provide much needed funds to cover a high health plan deductible when a member is sick or injured. These plans, which historically have been marketed as a way to pay other bills that keep showing up in the mailbox when a person is unable to work due to a medical condition, today these policies are seen as a way to fill in the holes in your health coverage; they help people meet their calendar-year deductible. Other supplemental coverage like cancer policies and hospital indemnity plans can also help clients offset their deductible exposure.
Last but not least, many of the catastrophic plans people are purchasing nowadays require them to pay the full cost of doctor visits and prescriptions until they’ve satisfied their annual deductible. When we try to cover services under the health plan for a predictable, flat-dollar copayment, the premiums are through the roof, but removing those copays creates a new problem for consumers: they may not have the money to seek care when they need it, so they delay treatment and hope the problem will go away. It usually doesn’t.
For that reason, it’s important to provide people with an alternative to the up-front copayments that are no longer included on their health plans. A telemedicine benefit can help because it allows members to call a doctor, describe their condition, and get a prescription if medically necessary, and usually the cost is less than fifty dollars. Retail clinics can be another good alternative when some sort of test or screening is required to diagnose conditions like flu or strep. Retail clinics are less expensive and more convenient than a doctor’s visit, and they are equipped to treat a number of minor conditions. One final idea is to recommend a good discount prescription card to your clients. While the cost of the prescription usually does not apply to the annual deductible when a member uses a discount outside of the health plan, it might be worth it if the savings is high enough. Plus, encouraging members to compare the prescription discounts offered by the health plan with other options that are available to them is a great way to train them to be better health care consumers.
Two steps to designing a comprehensive benefits package
- The first step is recognizing that today’s health insurance plans are not enough and that people need ways to offset their exposure and access medical care.
- The second step is to put together your list of recommendations and decide how they can be packaged into a single proposal for your clients. The good news is that AHCP offers many of the solutions that your clients need, so please give us a call if we can help you design a benefits package that provides all levels of coverage: catastrophic, mid-level, and first-dollar.