By Jaclyn Giovis
South Florida Sun-Sentinel
February 7, 2008
Blue Cross and Blue Shield of Florida Inc. wants you to buy health insurance the way you might buy a cell phone.
The insurer last month opened “Florida Blue,” its first insurance store in South Florida. Situated in the new Pembroke Lakes Square shopping center in Pembroke Pines, the store allows most consumers to walk in and buy health coverage and dental and life insurance in one visit or have questions about policies answered.
Unlike most insurance offices, Florida Blue features wi-fi access, a flat-screen TV and a PlayStation for kids. The store has computer stations where customers can look up insurance information with help from an agent.
Experts say the health insurance industry is changing, becoming more complex as health-care costs rise, the number of uninsured increases, and employers decide to cut group health insurance plans or provide employees a stipend to find their own provider.
As a result, some health insurers are looking for ways to make shopping for insurance less painful for consumers and attract new business by reaching out to people without coverage, they say.
This weekend, Florida Blue will host a grand opening with free health screenings, chair massages and giveaways.
http://www.sun-sentinel.com/business/sfl-flzinsureretail0207sbfeb07,0,5323731.story
Comment:
By Don McCanne, MD
Placing the consumer in charge of his or her own health care has been touted by the supporters of consumer-directed health care as the answer to our health care cost crisis. This includes providing consumers with a choice of coverage options in the individual private insurance market.
It is not only the advocates of HSAs and high-deductible coverage that support expansion of the individual market, it is also the leading presidential candidates from both political parties. Even the Democratic candidates would expand the individual insurance market and perhaps even mandate the purchase of these products. The clear trend, which is already taking place, is to shift coverage from employer-sponsored plans to the individual market.
Obviously Blue Cross and Blue Shield of Florida recognizes this trend and is positioning itself to be a leader in the market. Retail centers seem to be a promising untapped market outlet for their products. Although this may start a new trend that may be very beneficial for the insurance industry, it does have a downside for “health care consumers.”
Health plans in the individual market provide about 30 percent lower value than do plans in the employer-sponsored group market. The administrative costs are much higher because of marketing (advertising) costs, underwriting expenses, brokers fees, plan maintenance (individual billing), high attrition rates, and other expenses related to the fact that they are selling one individual policy at a time rather than marketing a single large package to an employer.
Another problem is that reasonably comprehensive plans have become very expensive. The average employer-sponsored plan is now over $4,500 for an individual and over $12,000 for a family. Many middle-income families can no longer afford these premiums, much less premiums adjusted upward by 30 percent because of the additional costs in the individual market.
When you shop at a retail outlet, you are looking for a good deal. In insurance, that means an affordable or even a bargain-rate premium. What kind of an insurance product will you be able to buy that has premiums well below the employer-sponsored plans, plus has protection reduced by another 30 percent to make up for the higher administrative costs? Whatever it is, if you develop significant medical problems, you’ll be at high risk of joining those insured individuals who filed for bankruptcy because of medical debt. (Medical debt is a major contributor to one-half of all personal bankruptcies, and three-fourths of those with medical debt were insured at the onset of their financial problems.)
Oh wait. What about the high overhead costs of operating a retail center? Subtract those costs as well from the benefits that your plan would cover. Whatever coverage you have left, don’t expect it to pay your medical bills.