Accident Insurance

$5,000 AD&D Insurance Plan
Be Prepared-Activate Your Plan Today!

No one likes to think about it. But accidents are a part of everyday life.

When accidents happen, their financial impact can be devastating. Your Veterans Advantage AD&D plan with up to $5,000 in insurance coverage is just one more way your membership can help ensure financial protection is available for you and your loved ones.

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AD&D Plan Benefits

To help protect you and your family from the unforeseen financial hardship of a serious accident that causes death or dismemberment, your Veterans Advantage AD&D coverage delivers you the following valuable benefits:

• Up to $5,000 in coverage, depending upon the injury or loss.
• No physical exam required.
• Coverage for all age groups.
• Great supplemental insurance--benefits are paid in addition to any other insurance coverage you may already have.
• Coverage 24/7, worldwide, whether you are home or away, or on or off the job.
• Provided through your membership with no additional fees or charges for coverage.

Eligibility and Coverage

As a member of Veterans Advantage, you are eligible for this plan. You simply enroll to activate your coverage.You cannot be declined for medical reasons--as long as a you are Veterans Advantage Card member, you are eligible for coverage under our group insurance policy, regardless of your age or health.

No matter how careful you are, accidents do happen. Accidental injury remains the number one cause of death for people under 40 and the fifth leading cause of death for all ages¹. While no one can predict when or where an accident may occur, you can be prepared with your insurance coverage from Veterans Advantage.

As a Veterans Advantage Card member, you are eligible for coverage from our $5,000 AD&D insurance plan under our group policy. There are no additional member fees or charges for coverage. You cannot purchase this plan independent of your membership.This plan will provide you with protection in the event of an accidental death or a covered injury. It is designed to reduce the financial burdens associated with an accident that causes the loss of life, limb, or sight.

Make sure living areas are well lit to avoid accidental falls, especially on stairs. Learn more at www.nsc.org.

No one likes to think about the worst occurring. However, it is a comfort to know that your family members can receive a death benefit in the event of a fatal accident during a business trip, vacation or recreational pursuits, or simply while going about daily activities. You will receive 24-hour-a-day coverage, 365 days a year, whether you are at home, at work or at play.

If you have loved ones whose security would be threatened if an accident took your life suddenly, or you could not earn an income owing to a dismembering disability or loss of sight, your AD&D insurance plan will deliver you a valuable financial benefit, without having to purchase additional life insurance to cover such a possibility. And, if you already have other forms of insurance, it offers an added layer of protection.

You may believe that if you do have an accident, it will most likely be on the job, and workman’s compensation benefits will provide coverage. Our plan will also pay you for accidents on the job, and provides supplemental coverage to any existing insurance. But, it is important to note that, of all the injury-related deaths in 2004 involving workers, roughly 90 percent occurred while employees were off the job.²

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International Group Insurance

Understanding What Is Necessary When Creating an International Group Insurance Plan

Sending an employee overseas is a huge investment for an organization—large or small. Most firms don’t realize that the cost of a failed overseas assignment can often run past $500,000 once all the costs are accounted for. Thus, it makes a lot of sense to invest in an employee’s financial safety net—his or her international group insurance.

These days it is not unusual for a U.S. manufacturing firm to operate a factory in India, an American airline to have its reservations processed in Ireland, or a Bahamas-registered offshore company to have expatriate employees in Africa. As we all know, the world has long since changed into a global marketplace with a global workforce. More and more, companies are sending their employees abroad to search out new markets or run operations. The employees who are sent overseas are attracted by the exotic locations, a chance to travel and experience various social and business cultures, and, of course, the lower taxation in some countries, and sometimes the higher salary. These employees travel frequently and are key assets for the business. Most companies want to offer them optimized protection while safeguarding the continuity of their business. Many Canadian and U.S. companies are also hiring third-country nationals, especially if they have skills that don’t exist in the company or country. More often than not, the offshore company will have to hire local nationals to fill various positions when needed. Depending on the country and labor requirements, these local employees may require benefits from a local insurance company. However, local nationals can be fully or partially covered by expatriate benefit programs. Such a decision will also hinge on the reliability and quality of the local insurance firms. Generally, most insurers are not keen on covering local nationals. If they do, the insurer will want to make sure the majority of the employees covered are expatriates.

Selecting an Expat Insurance Company

Some expat employers operating offshore use a local insurance company, but this can be fraught with inconvenience and danger. In many countries, supervisory bodies or cartel arrangements strictly regulate insurance firms. Other nations may have blocked currencies or significant foreign exchange regulations. It must be asked whether the employee really wants to receive his or her benefits in a fragile currency. Of course, this could also be said of the U.S. dollar of late. This is not a problem if the insurance company is reimbursing health or dental expenses, but currency payments for life and disability insurance for an expatriate should be made in a stable currency, such as U.S. dollars, euro, or U.K. pounds. In addition, employees may not be in a particular country long enough to qualify for membership in the local insurance plan,or there may be a citizenship requirement. Having a pooled offshore plan simplifies reporting, administration, and communication because the benefit manager will have one single-source clearinghouse and will not have to negotiate with several foreign insurers. Finally, companies must decide whether they wish to deal with a highly stable European or North American insurance company or a company from a less stable country.

In addition to looking at the overall cost of the expat benefit plan, one should also include ease of administration. Employees are also impressed by a plan that has prompt claims settlement in any currency and the ability to settle claims directly. Once the employee repatriates back to his or her home country, the coverage usually ends. Most expatriate plans are not in compliance with state and federal laws such as HIPAA, COBRA, and ERISA—check with your international insurance broker for guidance on this.

Avoid Using Domestic Plans

Some expat employers like to use their domestic insurer to cover their expatriate employees. This is not a good idea for a variety of reasons. First, the domestic firm cannot insure local or third-party nationals. Second, payments can only be made in the domestic insurer’s home currency. Third, domestic plans are designed to work in their home country and comply with domestic rules and administration, not the rigors of international administration and claims payments. Fourth, disability payments from the firm’s domestic insurer may have to be made if the employee returns home for treatment and often may not cover disabilities occurring overseas. Finally, these insurers will at least want a time limit on insuring someone who works abroad. Basically, coverage when you need it may not be there. One should also check with an accountant to ensure that being part of a domestic employee benefit plan does not affect residency tax status. Compounding the preceding issues, statutory requirements imposed on benefit plans for expatriates vary from nation to nation, and many states have no reciprocal social arrangements or do not allow the transfer of benefit entitlements abroad. Insurance schemes put in place at the various countries may vary so substantially that it is impossible to conduct product/price comparisons.

I have found that many human resources managers use domestic insurers because they want everyone to have the same coverage—but this misses the above points plus you can’t expect your expat plan to perfectly match your domestic employee’s coverage. These are expatriates and they have to be treated as such. Pooled expatriate plans also harness savings potential through higher economies of scale by insuring several operations in various countries under one plan.

A Wide Range of Expat Insurance Policies

The above-all points need to look at consolidating an international employer’s global insurance policies with one offshore benefit provider that will provide solid, portable, and continuous protection. This will help streamline risk management, and cut administration and communication costs. Such pooled expatriate plans also harness savings potential through higher economies of scale by insuring several operations in various countries under one plan. Expatriate plans offer portability of benefits and bring the quality and security of benefits required by employees. Quality benefits at a reasonable price for expatriates are imperative for HR managers. If an employee becomes injured and has to be evacuated or is permanently disabled, he or she will come to the employer for help. Benefit payments can be made in the local or a set currency such as U.S. dollars. Some of the international benefit plans offer a comprehensive program, while others offer just traditional insurance protection, such as life insurance.

Most expatriate benefit schemes offer life insurance based on a multiple of salary, such as two or three times of an employee’s earnings. Others offer a flat benefit amount. Two times’ earnings is a common amount of life insurance. Dependent life insurance is not very common in expatriate benefit plans. Most employers will match the currency of the cover with the salary the employee is paid in, but this is not a hard and fast rule. As one would expect, the U.S. dollar is the most common currency used for international benefit plans, despite its recent drops in value.

The amount of accidental death and dismemberment (AD&D) usually matches the life insurance. As the name implies, this insurance is paid if an employee dies in an accident or suffers a permanent loss of use or severing of a limb, loss of an eye, arm, finger, etc. AD&D coverage will vary quite a bit from plan to plan.

Most expatriate insurers will not offer short-term disability (STD) coverage. With employees and insurers dealing with each other over such long distances and the relative ease of self-insuring this benefit, a STD plan is usually not necessary for most clients. But an employer should have a written policy that states when income will be paid if the employee is sick or injured before the long-term disability (LTD) plan from the insurer commences.

Unfortunately, LTD coverage is an often-neglected benefit with most expatriate clients that I encounter. Despite the fact that your employees’ most valuable asset is their ability to earn an income, many expat employers still don’t have a salary continuance plan in place or worse yet try to self-insure. An LTD claim for an employee with a decent salary can easily exceed a million dollars if the employee becomes permanently disabled. Most disabilities lasting longer than two years are permanent in nature. A typical plan pays 60 to 70 percent of an employee’s salary. As you would expect, the rates for the life, AD&D, and disability benefits are based on the age, sex, occupation, income, and location of the employees. As an example, the company of an expatriate who is traveling in Africa in a very politically unstable country can expect to pay more than a company with employees in an office in Europe.

The next benefit almost always offered is a health package. This coverage includes benefits such as hospital expenses, drugs, professional services, maternity expenses, and physicians’ charges. The premiums are based on many of the same factors as the life and LTD plans, but may weigh more heavily on the operating nation. Medical evacuation and emergency travel coverage is also available. Dental insurance can be added to the plan to cover basic dental services such as cleaning, scaling, and extractions. Crowns and bridges are usually covered at 50 percent, as is dependent orthodontics. This benefit is more easily self-insured.

Probably the largest factor in the pricing of an international health insurance plan is where the employee can access treatment. Many expat health plans will price their health insurance to either cover or exclude treatment in the United States and Canada because of the high cost of medical treatment in North America. If one has American citizens covered, it is always a good idea to pay extra to make sure they are covered for treatment back in the United States. If an American expat becomes seriously ill or injured, they will want to get treated in the United States. Some plans will encourage the use of PPOs by eliminating coinsurance or deductibles if the employee is treated in a PPO network or if he or she gets treated outside of the United States.

While some employers don’t provide coverage for spouses and children, this can be a short sighted way to decrease costs. A spouse’s dissatisfaction with living overseas is a very common cause of foreign work assignments not being successful with the resulting high costs to the employer. It is a good idea to make sure your expat health plan covers an employee’s dependents well. One such important benefit is maternity.

Many group international benefit plans do not cover maternity or place limits and conditions on it because of the inherent high-claims risk. As you would expect, covering maternity is going to increase your costs. Almost all expat group plans will have a 12-month waiting period for maternity—something to think of before you send an employee or spouse overseas who is already pregnant or will be in the next 12 months. A good plan will cover newborns at birth, but administrators have to make sure that the insurer is advised of the birth and that the newborn child is added to the plan.

Dental and vision benefits are less common with many expat benefit plans, but it is still a worthwhile part of your benefits strategy. While dental benefits can be self-insured, you have to weigh the administration cost of adjudicating dental claims. Some employers might prefer to give the employee a dental allowance each year. Employee benefit plans include the payment of eyeglasses and contact lenses. This benefit is quite inexpensive and can be easily self-insured.

Common Exclusions

In terms of fine print, it makes sense to examine the plan, paying particular attention to the exclusions. As discussed, some benefit plans exclude maternity expenses and care for newborn children while others place limits on pre-existing conditions. Still other plans have pre-existing clauses that limit the benefits for conditions, which were being treated 90 days prior to being insured by the medical plan. Such exclusions may be removed for an additional premium charge by some firms. The larger the number of employees, the more the insurer may be willing to remove the pre-existing clause for health insurance and even cover employees without any medical questions. Another standard exclusion clause is for war and riot. All firms will have a war, terrorism, riot clause of some sort or another, but some will cover the employees if they are killed, disabled, or injured by such an event as long as they are an innocent bystander. This is what we call passive war risk. It basically means you are not covered if you are actively participating in a war, riot, or terrorist act. Any client who has employees in a country highly susceptible to such events should make sure that passive war and terrorism are covered. Of course, these days, which country is not susceptible to terrorism? As a broker with a background in political studies, I examine the political situation in the countries my expatriate clients operate in to advise them of whether or not they should try to have the war risk clause taken out. Controlled risks offers more in-depth risk analysis for clients who are sending workers to dangerous countries.

Other common exclusions or limited benefits in group insurance plans are participating in a crime, alcoholism, HIV for health benefits, mental illness, nuclear or biological attacks or accidents, contraception, obesity, cosmetic surgery, and fertility treatments.

Accessibility

A company need not be big to obtain these insurance plans. Expatriate plans are available for as few as three employees who may be in different countries. If a company has more than 50 employees, the plan design can be even more flexible. Also, the larger the number of employees, the more the claims experience becomes part of the renewal premium. With some plans, if the annual international net results are positive, a dividend can be paid to the head office of the multinational. If the claims results are negative, it can be written off provided stop-loss protection was agreed or carried over to a new accounting period. For most small- and mid-size offshore companies, their claims experience will not affect their renewal rates. Some clients have combined the local insurance schemes with the expatriate coverage. This can be done, for example, by using the local health and dental coverage with an expatriate disability and life insurance plan. In some cases, it can integrate third-party policies.

Selecting a Benefit Plan

Choosing an expatriate benefit plan does not only depend on price. Another factor is the ease of administration; for example, an employer will want a plan with a 24-hour helpline for employees with queries about their membership or medical coverage. Personalized membership cards and booklets to effectively communicate the plan are also important. In addition, employees are impressed by a plan that has prompt claims settlement in any currency. Finally, it must be determined whether the expatriate insurer is financially stable. This is of obvious importance, especially for employees who become disabled and will be receiving payments for many years.

You Don’t Have to Be a Large Firm to Obtain These Plans

Expatriate benefit plans are available for as few as three employees who may be in different countries. If a firm has fewer than five employees with no foreseeable growth, it may want to simply consider an individual international health insurance plan, such as the ones offered by Expat Financial. Once you have more than 10 employees, the plan design can be even more flexible. With some large benefit plans, if the annual international net results are positive, the dividend can be paid to the head office of the multi-national. If the claims results are negative, it can be written off if stop-loss protection was agreed or carried over to a new accounting period.

Conclusion

At the end of the day, the expatriate benefits are simply another way of compensating employees. For companies operating overseas, expatriate plans offer the best combination of cost, portability, coverage, ease of administration, and security. International group insurance is a vital part of an employer’s remuneration package for its expatriate employees, so making sure that the plan is well received by the employees is an important part of the firm and employee’s success overseas.

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Health Insurance Quotes

Finding health insurance can make you feel inadequate. There are so many types of insurance and they are confusing. Most people are at a loss as to how to even take that first step and find health insurance quotes. Often they are compelled to simply give up and take the first option that comes their way.

Saving money on health insurance is important. Fewer and fewer businesses are providing free or subsidized health insurance for their employees now, and many self-employed individuals also left without coverage choose to go without and take the risk of having no insurance rather than submit to the hassles of finding health insurance quotes. You and your family need good insurance but you also need to be sure you are getting the best value for your dollars. There are a number of places you can look for health insurance quotes and it does not have to be difficult.

Local Phone Book

The first, and maybe most obvious step, is to check your local phone book for health insurance companies in your area. Ask them to give you quotes based on the specifics of your family situation, the type of insurances they offer, and deductibles.

Do not be tempted to jump at offers right away. Make sure you cover all of your bases and talk to others to find out how they feel about the insurance companies you are considering. Which brings us to the next way to find health insurance quotes: talking to friends and family.

Friends and Family

While you can't get direct quotes from your family, or friends, you can find out if they are happy with their insurance company, if they feel the rates are reasonable and what they are paying for their policies. Get names and contact information from them and call those companies to get quotes for your needs.

Fellow Employees and Others In Your Field

Whether you work in a big office, a small satellite office, or are self-employed you can talk to others who work with you, or in your field to find out about their health insurance and get information on the companies they use.

One Click Health Insurance Quotes Online

By far the most time and cost saving method of searching for health insurance quotes is your computer. A simple search engine query will turn up pages of companies that give comparison quotes for various health insurance companies. Don't stop with just those sites, once you have the quotes visit the specific insurance company websites so you can find out more about them and the types of policies they offer.

Since it is all online you don't have to waste time traveling to and from insurance company offices and spend money on fuel costs. Another benefit of shopping for health insurance quotes online is that the comparison sites also often offer a sense of security in that they have checked out the companies they are quoting, may have reviews from customers on the services those companies provide, and you get multiple quotes immediately so that you save time gathering quotes from individual companies.

Whatever method you use to obtain health insurance quotes it won't cost you anything which is a good reason not to react in haste and take the first offer, or even the second. Take your time and find the perfect health insurance it is worth the effort. Study the types of insurance and compare deductibles from a list of the best ones you find in your search. Do not let cost be your deciding factor. There is more to a health insurance quote than just money. Available doctors and hospitals, deductibles, illness coverage, emergency and well-doctor visit coverage, and prescription coverage are all part of what you have to use to compare the various companies when looking at their health insurance quotes.

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Family Health Insurance

When an individual is trying to determine what type of health insurance would be the most beneficial for his or her family, there are many options that must be considered. One of the most important aspects to contemplate is whether or not the individual’s employer offers a group health plan. If the employer does offer family heath insurance coverage, then the individual will have to determine whether to apply for employer provided family health coverage or whether to seek this coverage on their own. If the employer does not provide family health coverage, the individual will need to conduct research and determine which health insurance provider and what plan offered by the provider will most comprehensively meet the needs of his or her family.

Essentially, family health insurance is individual health insurance to which family members are added. Many employers offer individual health insurance plans to which employees that opt to receive health insurance through the group plan can add spouses and dependent children. The law states the insurance providers cannot exclude spouses or dependent children with pre-existing illnesses or conditions from group health plans. In many cases, employers will pay a percentage of the employee’s health insurance premiums. This helps make family insurance affordable for many individuals. However, if the individual loses his or her position within the company, the health insurance benefits will be terminated.

Individual health care plans are those purchased by individuals directly from a health insurance provider. These types of plans allow the individual to choose their insurance company, plan features, as well as their level of coverage. Many times, the coverage will not be as extensive as those offered by group plans, but if an individual has no other option then an individual plan can meet their health insurance needs. Most individual health care providers require more extensive medical checks than group insurance providers. Often, family members with pre-existing conditions will be denied coverage under an individual health care plan.

For individual looking for the best family health insurance rates and coverage for the loved ones, group health insurance plans will be the best option. These plans often provide the needed coverage at affordable rates. Obtaining health insurance this way is usually the least expensive option, as individual plans can be expensive. However, if a group plan through an employer is not possible, the individual will need to contact several health insurance providers for comparison quotes. When purchasing individual health insurance, it will be important to fully understand all of the terms associated with the policy.

Some of the information individuals may want to determine when researching health insurance is: what types of policies are available, what companies offer these policies, what the policy does and does not cover, and reimbursement procedures. Individuals will also want to ensure that the agent and the insurance company are reputable and are in good standing. Understanding how premiums can be paid, the effects of a higher or lower deductible, and the length of required waiting periods are important to purchasing the right insurance policy.

Premiums can often be paid in one lump sum. Individuals that can pay in one lump sum are often eligible for pre-payment discounts and expensive service fees may be avoided. The amount saved can vary by provider and plan. Individuals and their families that are healthy and require little medical attention may want to consider a higher deductible. Higher deductible health insurance policies generally have lower premiums than lower deductible policies. If group health insurance is not an option, researching these factors can help individuals obtain the best policy at a reasonable rate.

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Student Health Insurance FAQs

• Q. Which students are automatically enrolled in student health insurance?
• A. All traditional students registered for at least 12 credit hours are automatically enrolled in and billed for student health insurance if they do not complete a hard waiver for by the deadline date. A copy of both sides of your current insurance card must be included with the waiver form. The final waiver deadline for fall is September 1.
• Q. How do I waive student health care insurance?
• A. Full time students may waive health insurance coverage if the student presents evidence of other health insurance coverage under a plan that provides benefits equal to or greater than the Student Health Insurance Plan. Students must present evidence of coverage and complete a waiver form by the waiver deadline. A copy of both sides of your current insurance card must be included with the waiver form. Waiver forms are available at the USF web site. They will also be distributed to each student via email and US mail. The first dead line for the waiver is July 7. Those not supplying their waiver by July 7 will see the insurance premium on their bill. The final deadline for waiving health insurance is generally coincides with the add drop date for classes. For the 2008-09 academic year, the waiver deadline is September 1, 2008. After that date the premium will remain on the student bill.
• Q. How can I get student health insurance if I am not automatically enrolled?
• A. Students registered for 12 hours our more can elect to obtain coverage by submitting an enrollment form before the enrollment deadline. The enrollment deadline will coincide with the add drop date for classes. For the 2008-09 academic year, the deadline is September 1, 2008.
• Q. As a parent, should I purchase a Student insurance plan for my child, or cover them through my standard medical plan.
• A. The answer depends on your specific circumstances. The following are some factors that might influence you to buy separate student insurance:
  
  1. Your child is nearing the age at which he or she can no longer be covered under your plan. This is usually around the age of 24 years however do check with your insurance company to find out the specific age limits for your current policy.
  2. The HMO or PPO network for your insurance plan does not have physician or hospital coverage in the area around your child's college.
  3. Fills in the gaps by covering your family plan deductibles and coinsurance.
• Q. Can I purchase student insurance for family members (spouse and dependents?)
• A. The Student Health insurance plan is designed for individual college students only and does not cover spouses and/or dependents.
• Q. What type of coverage is provided under the new health insurance plan for the 2008-09 academic year?
• A. USF will offer students a single student health insurance plan that is designed to help control increasing costs while providing students with an excellent student health plans. For the 2008-09 academic year, the plan costs $308 for students and $898 for athletes. The athletic coverage also covers intercollegiate sports injuries.
• Q. If I waived student health insurance last year, do I need to do it again?
• A. Waivers submitted cover that term through August 1. The waiver process must be completed annually during your academic career
• Q. When will I receive my insurance card?
• A. For students who did not submit a waiver by July 7, insurance cards will arrive for the beginning of the academic school year. For those who missed the first enrollment period and do not waive this insurance, a temporary card will be issued. This card will serve as your insurance identification for the entire academic year. If you are enrolling in the health insurance plan for the first time during the spring semester, your card should arrive by the first week of February.
• Q. Does the student insurance provide coverage throughout the year, or just during the school term?
• A. The student insurance provides coverage throughout the year, not just when the school is in session. If you leave school, your coverage continues for the remainder of the policy year.
• Q. When does my coverage begin?
• A. Student coverage begins on August 1 of each academic year.
• Q. Is their help available for my insurance questions?
• A. All students in enrolled in the Student Health Insurance Plan will have access to personal and web resources to answer your questions. This information will be provided with the insurance information to be mailed to each student.

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Health insurance markets out of whack

The American Medical Association (AMA) has a very different perspective on health insurance markets from that reflected in the Federal Trade Commission (FTC)/Department of Justice (DOJ) report, A Dose of Competition, and in the January 2005 Physician News Digest interview with Mark Botti, an attorney with the DOJ. Our perspective is based on objective data and the experience of practicing physicians.

The AMA is very concerned that federal regulators continue to turn a blind eye toward the reality that in much of the country health insurance markets are not competitive. Health insurers have amassed significant market power through mergers and acquisitions but have received minimal scrutiny. Mr. Botti himself can point to just one instance where the federal agencies have challenged a health insurer merger: the 1999 Aetna/Prudential merger.

In contrast, physicians have been placed under a far higher level of scrutiny than is warranted by their comparative economic strength in today’s market. In April 2002, the FTC announced its intention to "find and bring" cases against physicians. Between April 2002 and December 2004, it brought 21 complaints against physician entities. Of these, 20 entities decided to settle rather than engage in a protracted and financially devastating legal battle with the FTC. This scrutiny is misplaced given that physicians are by far the least consolidated component of the health insurance industry.

It is important to remember that physicians play a critical role as patient advocates in an environment where health insurers have limited accountability for decisions that impact patients. The physicians’ role as patient advocate can be undermined when they have no leverage in negotiating contracts with health insurers. The AMA has found that in much of the country physicians face a true David and Goliath battle when dealing with health insurers.

The AMA has been studying health insurance markets in-depth for the past four years based on the most credible, publicly-available data. Our recently-released Fourth Edition of Competition in Health Insurance: A Comprehensive Study of US Markets used the Herfindahl-Hirschman Index (HHI), part of the 1997 guidelines used by the FTC and DOJ in reviewing the competitive impact of mergers. Markets that exceed an HHI of 1,800 are considered "highly concentrated" by federal regulators.

Most alarmingly, our study found that for the combined HMO and PPO markets, 86 of the 92 metropolitan areas had an HHI that exceeded the federal threshold of 1800. In addition, the study found that in 87 of the 92 markets, a single insurer had a market share of 30 percent or greater and that in 34 of the markets, a single insurer had a market share of 50 percent or greater.

The findings need to be viewed in the context of the unprecedented consolidation of the health insurance market during the 1990s. Between 1995 and 2004, there were over 400 mergers involving health insurers and managed care organizations. A new merger wave is underway. The 2004 acquisition of WellPoint Health Networks, Inc., by Anthem, Inc., (now known as WellPoint, Inc.) created the largest health insurer in the country, providing coverage to 28 million Americans. UnitedHealth Group has acquired four insurance companies in the past year, adding nearly four million covered lives, bringing its total to 22 million.

The ultimate consumers of health care – our patients – do not appear to be benefiting from the consolidation of health insurance markets. Instead, during this period of consolidation, health insurance premiums have risen dramatically and continue to rise without an expansion of benefits. Moreover, many of the large national health insurers have posted high profits over the past four years, even during times of economic slowdown. The primary beneficiaries of these mergers appear to be shareholders and the highly paid senior executives of these companies. The AMA believes that it is incumbent on federal regulators to take a hard look at whether consolidation in the insurance industry has harmed consumers.

Mr. Botti notes that "possession of market power is not unlawful." While correct, this statement does not absolve federal regulators from taking the next steps in the analysis. For example, evaluating barriers to entry is critical to antitrust analysis. If entry is easy, even a high market share will not necessarily translate to market power. If entry is difficult or takes a number of years, then a health plan with a strong market position is more likely to be able to charge high prices without the threat of competition.

Entry into health insurance markets is difficult. If entry into health insurance markets were easy, one would expect to see significant entry in response to the healthy profits posted in the past five years. However, that has not been the case. In fact there has been minimal new entry into health insurance markets in that time period. The fact that large insurers like WellPoint and UnitedHealth Group are acquiring existing plans in markets as opposed to developing their own networks and products is further evidence of substantial barriers to entry.

Significant barriers to entry include state regulatory requirements and the cost of developing a physician network, which the DOJ has acknowledged. In its 1999 challenge to the Aetna/Prudential merger, the DOJ noted that "effective new entry for an HMO or HMO/POS plan in Houston or Dallas typically takes two to three years and costs approximately $50 million."

At the 2003 FTC/DOJ Hearings on Health Care Competition Law and Policy, a former Missouri insurance commissioner testified that during the 1990s, he approved several mergers in the St. Louis market, in part based on arguments by the insurers that entry into the HMO market in St. Louis was easily achieved. However, subsequent events proved this not to be the case. He further testified that following these mergers, the St. Louis market became more and more concentrated and there has been no new entry since the mid-1990s. The facts bear out that entering insurance markets is simply not quick or easy and that consolidation has made it even more difficult.

Another key determinant in an antitrust analysis is whether health plans are charging "monopoly" prices. It is disingenuous for the federal agencies or the health insurance industry to dismiss the AMA’s findings and similar findings by others, including University of California Berkeley Professor James B. Robinson, by noting that without showing monopoly pricing, market share alone is meaningless. Because health plan pricing data is proprietary, this is an analysis that only the federal government can undertake through exercising its subpoena power. However, the federal agencies have not made any effort in this direction despite rising premiums and increased health plan profits.

The AMA is concerned that the United States is heading toward a commercial health insurance system dominated by a few publicly-traded companies that operate in the interest of shareholders, and not primarily in the interest of patients. It is time for the federal antitrust enforcement agencies to reexamine their enforcement priorities which have resulted in minimal scrutiny of health insurers and aggressive pursuit of physicians.

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Health Insurance Mandates Aren't the Answer to Uninsured

In an op-ed published in the Baltimore Sun a few months ago, I questioned Maryland legislators' interest in mandating individual health insurance coverage. I pointed out that Maryland already mandates that individuals buy auto coverage, yet the rate of non-insurance for auto is 12 percent, not much different from the rate of non-insurance for health, 14.9 percent.

I also pointed out in that article that part of the reason many people don't buy health coverage is because the legislature has made it unaffordable by enacting 59 benefit mandates. It is hypocritical of the legislature to pass so many laws raising the cost of coverage, then blame people for not buying what the government has made unaffordable.

Though my article didn't mention this, the case is even stronger in the 16 states where the rate of non-insurance is higher for mandated auto coverage than for voluntary health coverage. (See table.)

California Dreams

I wish California Gov. Arnold Schwarzenegger (R) had considered these issues before putting together his "reform" package calling for universal insurance coverage through a combination of individual mandates and state subsidies, announced January 8. His proposal seems to be a lot of misguided chatter with very little substance.

Schwarzenegger says "all Californians will be required to have health insurance coverage," but he doesn't say how he will enforce that requirement. Currently, California has a very high rate of non-insurance for health insurance (20.6 percent), which is not currently mandated, but an even higher rate for auto insurance (25 percent), which is mandatory.

In addition, there isn't a word about how he intends to define what kind of coverage is acceptable to meet the mandate. Is it the same coverage that is on the market today, which so few people can afford? Does he intend to keep all 49 benefit mandates in effect? Or will he allow people to buy the coverage they prefer, instead of what the government wants them to buy?

A political note is in order here as well. Schwarzenegger says nothing about using the "Connector" approach as was done in Massachusetts. The Connector is the state agency through which all health insurance enrollment in Massachusetts is being done. According to its Web page, "The Connector serves as a bridge between eligible individuals, small employers, and health plans to promote affordable private health insurance to uninsured residents of Massachusetts."

Unnecessary Compromise

The Connector levels the playing field between employer- and individually owned coverage, which is a good thing. Some free-market policy groups supported the Massachusetts idea because they felt getting the Connector in place was worth allowing mandatory coverage. But mandatory coverage isn't necessary for the Connector idea to work. By acceding to mandatory coverage in order to get the Connector, many free-market advocates surrendered a fundamental principle of freedom for political expediency.

Apparently, in California that process has translated into thinking mandatory health insurance coverage is not such a violation of freedom after all, so we'll do the mandate without bothering with this Connector thing. Bad idea.

Schwarzenegger would also tax, at 4 percent of payroll, all employers with more than 10 employees who do not provide coverage. Again, this is a principle the business community in Massachusetts went along with. But in Massachusetts, the assessment was a relatively low $295 per employee per year.

Again, this is the ol' foot-in-the-door trick: Get people to compromise on a basic principle with a small hit this year, then hit them harder next year.

It's also a good example of the ol' divide-and-conquer trick. Employers with fewer than 10 workers (80 percent of all employers in California) may support the idea because it doesn't affect them. But there are three major problems with it:

Employers with 10 or fewer employees are the source of most of the uninsured in the state, so exempting them will do little to solve the problem.

Even at 4 percent of payroll, the cost per worker is a whole lot less than the cost of providing coverage, so many employers who currently provide coverage may decide to drop it.

It won't survive a challenge based on the federal Employee Retirement Income Security Act (ERISA), which exempts employers who self-insure from state health insurance laws. Businesses in Massachusetts didn't bring an ERISA suit against the idea because the cost of complying didn't justify the cost of suing. That may be different in California.

Schwarzenegger has also proposed a new tax of 2 percent on doctors and 4 percent on hospitals, ostensibly to cover higher payments to the state for all the new users under Medi-Cal.

That sounds like another old trick: Rob Peter to pay Paul. What's the point of raising Medi-Cal payments if you turn around and take that money away in the form of higher taxes?

I guess funneling the money through Medi-Cal ensures getting federal matching dollars for it, but that just means the rest of the states will be taxed more to pay for Schwarzenegger's ambitions.

A whole lot of rhetoric, with virtually nothing positive in this stew.

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Cost Factors in Health Insurance

Cost Factors in Health Insurance

Recently, the Maryland legislature passed a bill requiring employers of 10,000 or more to spend at least 8% of payroll on employee health insurance or pay the difference to a state Medicaid fund. In Massachusetts, where job creation lags behind the nation, similar legislation is proposed for businesses with 10 (ten) or more employees. In his January 19 Washington Post column, George Will asserts that similar bills are pending in “30 or so other states.”

Such legislation discourages employers from locating, (or expanding), in those states. Wal-Mart was planning to build a distribution center on Maryland’s Eastern Shore that would employ at least 800. Wal-Mart is now reconsidering that expansion.

Requiring employers to provide health insurance may not be best for workers. To keep costs down, employers may choose to hire young workers rather than middle-aged or older ones. Businesses may also screen out those with health problems or a family history of them, (medical records aren’t completely secure). Some companies fire employees when off the job behavior of the employees or their spouses could increase insurance costs. Discrimination on the grounds of age or health status is hard to prove. Discrimination on the basis of “lifestyle” is permissible in some states. While some people may applaud such discrimination as a means of keeping insurance prices down, it could turn previously productive, taxpaying workers into a new class of unemployables who may end up collecting Welfare and Medicaid.

It would be best for both employers and employees if health insurance were purchased by individuals without employer involvement: The way life, auto and homeowners insurance are purchased. The high price of health insurance is the reason that can’t be done easily. Rather than rejecting the idea of health insurance as an individual responsibility, we should look into why the price is so high and how we can reduce it.

“All-inclusive” plans
One reason health insurance is expensive is “all inclusive” plans with low deductibles and low co-insurance payments. Such plans encourage people to seek treatment for minor, self-limiting or preventable conditions. An extreme example was described in Pia de Solenni’s May 23, 2005 National Review column, “Abortion on the Air.” The column reports a discussion on the Washington D.C. Elliott in the Morning radio show in which a caller reported 16 abortions by his first and second wives. When Elliot asked if the caller could have used a cheaper method of birth control, Elliot’s co-host said, “Insurance pays for it,” referring to abortion. Even the ardently pro-choice should be upset by that conversation: A surgical procedure for something that could have been prevented by a prescription or an over the counter (OTC) item is being paid for with everybody’s premiums. All inclusive, low deductible health insurance plans also encourage the use of insurance for services such as doctor’s office visits and vaccinations that are easily paid out of pocket without the administrative costs that accompany insurance. Many people see employer provided plans as “free” and don’t realize that higher premiums may mean lower wages.

The combination of cheaper high deductible health insurance plans and Health Savings Accounts, (HSAs), which use the insured’s pre-tax money might, encourage more careful healthcare spending. Some fear that high deductibles would lead people to defer seeking necessary care. It seems unlikely that the average person would endanger his health that way.

State mandated coverage
Some state regulations make insurance costly. New York and New Jersey have “guaranteed issue” requirements that allow previously uninsured individuals to purchase health insurance after becoming seriously ill. Normally, companies use money paid while people are healthy to cover their costs when they get sick. In a “guaranteed issue” situation, rates must be increased to cover ill customers. The high rates generated by “guaranteed issue” shrink the risk pool by discouraging young, healthy people from purchasing insurance. Those two states also require “community rating” which prohibits charging different rates to customers of different ages and health status. While charging more to people who are elderly, ill or have other risk factors may sound unfair, insurance works on the basis of risk: Those more likely to use the insurance pay higher rates. In Congress, Representative John Shadegg sponsored a bill giving grants to states that form high risk pools. While the bill involves the use of tax money, it keeps high risk individuals from being uninsurable and should keep their coverage from raising all customers’ rates.

Lobbying from special interest groups led to state mandates that all policies sold in a state cover their services: Massage therapy in four states, acupuncture in 11 and chiropractic in 47. One reason obesity has been classified as a disease is pressure from weight loss clinics to mandate coverage of that service. Some may applaud that as encouraging healthy habits, but how effective will a weight loss program be for someone who can afford it, but only participates if insurance pays?

An eHealthInsurance.com study found that the price of a health insurance policy for a family of four with a $2,000 deductible and 20% co-insurance ranged from $172 per month in Kansas City, MO to $1,200 per month in New Jersey. State mandated coverage and issue regulations account for the difference. Last summer, Representative John Shadegg introduced a bill allowing people to purchase health insurance from any of the 50 states. That free-market approach will enable people to save by buying only the coverage they need.

Prescription prices
Overall, prescription drugs save health care dollars. According to Doug Bandlow’s March 2, 2005 Washington Times column, “The Costs of Health Care,” Columbia University’s Frank Lichtenberg estimates that every $1.00 spent on prescriptions lowers hospital spending by $3.65. However, there is room for savings on prescriptions. Theresa Agovino’s October 25, 2005 AP article, “Generic Drugs Could Have Saved Us $20B,” summarized a survey by Express Scripts of approximately three million of their commercial customers that examined six classes of drugs including cholesterol lowering medications and antidepressants. The survey found that generics cost an average of $60 less per monthly prescription than brand name drugs. The survey estimated that approximately $2 billion could be saved annually if generic drugs were dispensed when available. According to Marc Siegal’s book, False Alarm, surveys by the FDA and Kaiser demonstrated that 20% to 30% of patients ask their doctors about advertised drugs. Doctors, who receive samples of these drugs, have no incentive to prescribe generics or older drugs that may on insurers’ “preferred” lists. Additionally, some plans charge only slightly lower patient co-insurance prices for generics than for brand names leaving customers unaware of the actual price difference. People might be more cost conscious if prices, rather than just the co-pay amounts, were prominently displayed on the patient information leaflets.

The uninsured
Hospitals that accept federal funds, including Medicare, are required to provide emergency treatment to those who can’t pay. Some costs of unpaid services are recouped with tax money and some is passed on to other patients and insurers. This was the rationale behind the Maryland bill, but it is misdirected. A RAND Corporation study found that about 20% of illegal immigrants have health insurance through their employers and virtually none purchase their own. The illegal immigrant population in the U. S. is estimated at 8 to 12 million. If the RAND study is correct, we have 6.4 to 9.6 million uninsured illegal immigrants. In his article, “Catastrophe in Care,” that appeared in the June 2, 2005 issue of Tucson Weekly, Leo W. Banks states, “Nationally, American hospitals lose $1.45 billion a year” treating illegal immigrants.

One ignored uninsured population consists of those who can afford insurance, but choose not to. This group includes some whose employers offered them the opportunity to partake in workplace health plans. Many of the voluntarily uninsured are young, healthy people who feel they don’t need it until that case of appendicitis or that skateboarding accident happens. Massachusetts recently enacted a law requiring that all who can afford health insurance purchase it. That should be a personal choice. However, legislation making it easier for hospitals and state Medicaid programs to collect payment for treatment from uninsured individuals who could have afforded health insurance would be a step in the right direction.

Defensive medicine
Doctors, fearing malpractice suits, often request additional diagnostic tests and referrals to specialists that aren’t medically indicated. Insurance pays for this. Patients and insurers also pay for malpractice insurance in the form of higher fees for service. Courts should focus on actual negligence rather than failure to foresee a remote outcome such as failure to test for an extremely rare disease. The AMA also needs to take strong disciplinary action against doctors who are actually guilty of malpractice. Some doctors who lose their licenses in one state because they were found guilty of malpractice simply relocate, get sued again and cause malpractice insurance rates to increase. Something like a national registry might help prevent bad doctors from practicing.

There is no single, simple answer for reducing health insurance costs. Legislating that employers pay for health insurance isn’t the answer. If costs continue to increase and businesses contend that they can’t stay in business if they provide health insurance, government may step in with some form of “universal” coverage. If individuals purchased their own health insurance, people would have more flexibility than employers or government can provide. It also allows health insurance portability that isn’t available with employer sponsored plans. It may also reduce the costs of health insurance and health care because people often aren’t cost conscious when someone else pays the premiums.

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Health Insurance Is The Focus of Latest INQUIRY Journal

"How Do Households Choose Their Employer-Based Health Insurance?" by Jean- Marie Abraham, William B. Vogt, Martin S. Gaynor -- This study found that price influences workers' selection of employer-based health coverage, and that price sensitivity varies depending on marital status, wealth, and the number of employer coverage offers a household has. Results indicate that as wages increase, households are more likely to opt for complete household coverage; alternatively, lower-income households are less likely to choose plans with coverage for all family members. Op-out payments -- compensation offered by employers to not take health coverage -- also influences choice and switching from one employer plan to another, when an alternative is available.

"Money and Mandates: Relative Effects of Key Policy Levers in Expanding Health Insurance Coverage to All Americans," by Jeanne M. Lambrew and Jonathan Gruber -- This analysis examined scenarios -- involving an employer mandate, individual mandate and tax subsidies -- to gauge their impact on expanding health coverage to all Americans. Results suggest that only a mandate requiring individuals to obtain insurance would cover all the uninsured; neither an employer mandate nor generous subsidies alone would be adequate, and even together they would not achieve universal coverage. An employer mandate would shift coverage to the employer system, and some could lose their employer coverage if a new, voluntary purchasing pool and generous subsidies were introduced. Federal costs would be highest with combined employer and individual mandates. Universal coverage could be achieved with lower subsidies and an individual mandate, but would mean higher out-of-pocket costs for individuals.

"Effects of Public Premiums on Children's Health Insurance Coverage: Evidence from 1999 to 2003," by Genevieve Kenney, Jack Hadley and Fredric Blavin -- Using 2000-2004 data from the Current Population Survey, this study found that raising premiums for public health insurance programs reduced enrollment in those public programs. While this could generate savings for states, and some children who forgo public coverage would have private insurance instead, other children would end up uninsured. Findings show that premiums had the greatest effect on lower-income families.

"Insurance Premiums and Insurance Coverage of Near-Poor Children," by Jack Hadley, James D. Reschovsky, Peter Cunningham, Genevieve Kenney and Lisa Dubay. This analysis showed that higher public premiums are associated with a lower probability of near-poor children being enrolled in public insurance programs. Additionally, it found an association between higher public premiums and a greater probability of near-poor children being uninsured or having private coverage. Results imply that increases in both public and private premiums are likely to leave more near-poor children without any insurance.

"Effects of Premium Increases on Enrollment in SCHIP: Findings from Three States," by Genevieve Kenney, R. Andrew Allison, Julia F. Costich, James Marton, and Joshua McFeeters - Examining enrollment in the State Children's Health Insurance Program in Kansas, Kentucky and New Hampshire, this study found premium increases associated with lower caseloads in all three states and earlier disenrollment in Kentucky and New Hampshire. Premium hikes led to greater disenrollment among lower-income children in New Hampshire and nonwhite children in Kentucky.

"Access to Health Insurance, Barriers to Care, and Service Use among Adults with Disabilities," by Anna S. Sommers - This study looked at adults with various levels of disability and found all disabled groups reporting more unmet need and higher medical service use than non-disabled adults with the same insurance status. Low-income adults who were less disabled, but still work-limited had the greatest problems with access to health coverage, and more than one-third were uninsured.

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Why take out world health insurance - a true story?

The tour bus from the Danish tour operator turned into the car park in front of the hotel, which was our drop off point in Hurghada, Egypt. I left the tour bus, said my goodbyes to the others and jumped onto a local bus home to downtown Hurghada – a trip of about

20 minutes. As I walked up the hill on the final stretch to my apartment, it felt good to be home, both in general and in particular in relation to my beautifully clean toilet. But I had barely stepped inside, when it all started... I spent the period between midday and 6 pm commuting between the bed and the toilet, first in a relatively controlled manner but diarrhoea and vomiting escalated all too quickly. Then came the stomach cramps, almost as if my intestines were being cut with a barber’s knife. The sweat poured off me, my pulse raced and, when I discovered blood in my vomit, something had to be done.

My flatmate wasn’t home, and the nearest hospital was in the next town of El Gouna, about a 30-40 minute taxi ride from Hurghada. But I knew there was no way I could stay in the apartment on my own any longer. Fumbling, I grabbed my belongings and stumbled down to the main road like a drunkard. The taxi driver was not entirely sure whether to take me or not, but my pleading mixture of pigeon English and Arabic made him realise that I was not drunk, just desperate to get to a hospital.

The trip seemed to take forever, until we finally arrived at El Gouna hospital, one of the most modern hospitals in Egypt, with a 24-hour emergency ward. I was shown into the preliminary examination room, and from then on things happened quickly. Barely an

hour later, I was admitted and found myself alone in a 2-bed room with – an important point – a separate toilet. I was given a drip and pumped full of fluid andelectrolytes. A steady flow of doctors and nurses examined me, took samples, administered medicine, etc. I found out that I could expect to remain in hospital for a couple of days.

A couple of days…. It felt immediately reassuring, as if I was in safe hands, but what about payment...? Would my world health insurance policy cover the costs and would I have to pay up first then wait for reimbursement? All treatment in Egypt requires payment in cash by the patient, which is completely fair in such a poor country. But diving instructors are not millionaires.... I reached for my mobile phone and congratulated myself on always keeping the details for my IHI world health insurance card in my wallet. So, armed with the emergency telephone number and my policy number, I sent a text message to a friend in Denmark and asked her to contact IHI’s 24-hour emergency service in Denmark on my behalf. Even the effort of this simple task made me slump back into the pillows exhausted, where I dozed off thanks to the cramp-relieving and pain-killing medication I had already been given. Not long after, my mobile phone rang. “Hello Heidi, this is Thomas from IHI

in Denmark. I heard from your friend that you need some help down there?”.

Rarely have I been SO happy to receive a call on my mobile! Thomas asked me about the symptoms, where I was, telephone numbers, fax numbers, the doctor responsible, etc., and surprisingly quickly he ended the call with a “Take care of yourself, and we’ll set the wheels in motion at our end. I will just speak to one of our consultants, but it sounds like a clear cut case to me. Just tell the hospital’s accounts department that you are covered by world health insurance and we will arrange for payment to be made directly to them, unless I call you back within half an hour. OK?”. Relieved, I put the mobile phone down and drifted back to sleep, secure in the knowledge that the financial side of the matter was under control.

2-3 days later, I was discharged from the hospital in El Gouna, still resembling a drowned rat but improving rapidly. After a week in bed at home in my apartment, I was back at the diving centre and again fully occupied training new divers or guiding experienced ones. This was what I had travelled all the way from the cold north to Egypt to do during my sabbatical year away from the normal job market.

The matter was finally closed when in April 2003 I returned to Denmark and sent in the original receipts to my contact person at IHI. The service was again streamlined and personal and even extra expenses for transport and other things, which in a country such as Egypt are difficult to get receipts for, were no problem. I was able to give amounts and a couple of bills written in Arabic and a reference to standard practice in the country, and that was that.

I have travelled quite a lot in my 31-year life and had already learned to take out travel insurance before the trip to Egypt. But I have never before dealt with an organisation as professional as IHI. They did what was most important at the time the crisis arose. They took the burden off me, handled everything based on my input and let me concentrate on getting better. I didn’t have any idea of what was going on behind the scenes, that was just fixed. Professional, personal and extremely efficient.

I would like to thank everyone at IHI who was involved in my case – you made a difference. I know where I will advise my friends and family to get their world health insurance......

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