Wellpoint/Blue Cross finds profits in high deductibles for young and healthy
American Medical News
Jan. 17, 2005
California Blues markets a hipper health plan to young adults
By Robert Kazel
WellPoint subsidiary Blue Cross of California’s… new suite of PPO products for the individual market, collectively dubbed Tonik, is intended to attract young people who are essentially healthy and haven’t felt a need for insurance, think it’s too expensive or just don’t understand what coverage is all about.
Of the more than 6 million uninsured residents of California, about 1.6 million are between ages 19 and 29, Blue Cross said. That represents between 30% to 40% of everyone in the age group, said Steve Synott, general manager for individual services at Blue Cross.
“We really saw a window of opportunity,” he said. “We knew we really had to get to know these kids — why they weren’t buying — and design the product around their lifestyle.”
The Tonik plans range from $64 to $80 per month. Deductibles are high compared with most health plans, ranging from $1,500 for the most expensive Tonik plan to $5,000 for the least expensive.
Applicants for a Tonik policy will be able to get an “instant response” on acceptance by answering several online questions about past hospital stays, prescription drugs they take and medical conditions. The company’s standard underwriting policies apply, so any applicant with a chronic illness could be rejected, Synott said. The plan is intended to appeal to generally healthy young people who may experience a sudden illness or injury, such as appendicitis or a broken limb, not to cover those with existing,serious health problems, he said.
The plan does not cover standard maternity expenses…
The high deductibles of Tonik mean that the products “are obviously geared to the hip and healthy, with access to at least some income,” said Sara R. Collins, PhD, senior program officer at the Commonwealth Fund, a New York-based research foundation that studies health issues.
Because two-thirds of young adults who are uninsured have a family income of 200% of the poverty threshold or less, many people in this age group stand to gain no benefit from the new product, she said, because it’s still out of their financial reach.
http://www.ama-assn.org/amednews/2005/01/17/bisb0117.htm
Comment: WellPoint/Blue Cross, one of the nation’s leaders in innovative insurance products, has recognized a great market in California: the 1.6 million between 19 and 29 without health insurance.
Feature’s carefully designed to target this young, healthy sector:
- If you need health care, don’t waste your time applying.
- Don’t expect any significant level of benefits to be paid since hardly any of you will exceed the deductible amount.
- Although you are in your peak reproductive years, it’s unfair to ask other insureds to contribute to care of a pregnancy that is a result of your personal choice.
- And for the two-thirds of you without money, please don’t waste our time in processing applications for coverage that you can’t afford anyway.
- And, oh yes, the shareholders of Anthem, now merged with WellPoint/Blue Cross, thank you for purchasing these pseudo-insurance products that are
designed to empower you as health care consumers, making you more responsible Americans, while supporting an insurance model that is designed to place the premiums in the pockets of shareholders so that they can be reinvested in America’s economy. Isn’t America great!?
What is ironic is that providing comprehensive insurance for this group would be very inexpensive since, on average, they are quite healthy and have relatively minimal health care needs. But this coverage, Topik, is designed to pay for the insurer’s costs and profits, while making every effort to avoid paying for health care.
In contrast, a program of social insurance would be designed to pay for health care services, of all things! How much longer are we going to leave this perverse industry in charge of our health care dollars?