Cigna to allow consumers to customize their health plans
By Jonathan G. Bethely
American Medical News
April 3, 2006
Cigna’s Custom Benefit Builder allows members to personalize various aspects of their coverage, from co-payment and coinsurance levels to deductibles and out-of-pocket maximums, to whether the plan includes a health savings account. Once the appropriate selections are made, the Web-based tool then calculates how much the plan will cost and allows the member to enroll in what is essentially a traditional PPO or HMO plan.
http://www.ama-assn.org/amednews/2006/04/03/bisd0403.htm
Cigna’s Custom Benefit Builder:
http://www.cigna.com/health/employer/medical/cbb/basics.html
http://www.cigna.com/health/employer/medical/cbb/cbb_fact_sheet.pdf
Comment: By Don McCanne, M.D.
What a great way to bring down the high cost of health insurance. The healthy family with negligible health care needs can choose the highest deductible ($50,000?), maximum coinsurance (50%?), and maximum out-of-pocket maximum ($250,000?). Cigna could probably offer that at a premium that a family living at 400% of the poverty level could afford. What a wonderful program. Cigna is finally offering a product that has made health insurance affordable.
But what about the future? Suppose the family develops significant medical needs. Although they have an affordable insurance product, health care itself would not be affordable.
Not to worry. Our health insurance innovators can come up with a new product. They can sell you an insurance product that will guarantee you the right to purchase insurance that would actually pay for health care should the need arise. Obviously the premiums would be very low because it would not be providing any coverage at all until a decision were to be made to enact the plan. Instead of health insurance, this plan would be “insurance insurance.”
So why haven’t the insurance innovators come up with this plan? The problem is that the care for the family with needs will have to be funded. There are two options of doing this. One option would be to step up the premium to cover the services required, once the need arises, replacing “insurance insurance” with truly comprehensive insurance. Since these plans would be enacted only by families with significant needs, this concentration of high-risk, high-cost individuals would require premiums that might consume the families’ entire incomes. That won’t work.
The other option would be to adjust the premium for “insurance insurance’ to cover the needs of every family that would eventually develop significant problems. Uh oh! Since these costs have not been covered by the affordable Custom Benefit Builder plan, the premium for “insurance insurance” would have to cover it. How ironic. To make these programs work, the innovators would have to come up with an “insurance insurance” plan that provides no benefits, but has a premium that covers the losses for all high-cost patients. If all Custom Benefit Builder participants were mandated also to purchase “insurance insurance” then the premium would be close to current comprehensive plans. If Custom Benefit Builder participants were allowed to decline “insurance insurance” then the premiums would be even higher for those who do purchase it, plus the family without “insurance insurance” would be bankrupt if faced with significant medical costs.
Of course, all of this is silly. But new insurance innovations that dramatically shift the costs of health care precisely to those in need are much more than silly; they’re tragic!
But at least the Cigna executives would have a good laugh on the way to the bank.