UnitedHealth Insures Against Becoming Uninsured
Just when you thought the nation's health insurance system couldn't get any more byzantine: Now you can buy insurance to protect yourself from losing your health insurance.
That's the basic idea behind UnitedHealth Continuity, a new product rolled out this week by insurance giant UnitedHealthcare. It's only for people who currently have coverage through their employers, but who fear they might lose it or may want to retire early and will need coverage to tide them over until they become eligible for Medicare.
You have to be healthy to enroll in a continuity plan — or healthy enough to qualify for an individual health insurance policy. If you do qualify, then you can select the plan of your choice and pay 20 percent of the premium each month to keep the plan on "inactive" status. When you leave or lose your job and the health insurance that goes with it, you can start your individual continuity plan even if you've developed medical problems in the interim.
"You can activate it when you need it and not worry about some health event interfering with your ability to get health insurance in the future," says Richard Collins, who heads UnitedHealth's individual insurance unit.
Collins, who is 52, actually became the first customer for the new product. He chose a plan with a $2,500 annual deductible and a $250 monthly premium. So he's paying $50 a month — 20 percent of the premium — to guarantee his access to the plan should he need it in the future.
But Robert Laszewski, a health insurance industry consultant, says he can't imagine the market for the new product will be very large.
"It would have to be someone who wears a belt and suspenders at the same time," he says. "Someone who has a job and health insurance, and is afraid they're going to get laid off and COBRA won't be enough."
COBRA is the federal law that requires most employers to permit those who lose their jobs to keep their health insurance for an additional 18 months if the workers pay the entire premium.
Laszewski says the product also assumes that efforts to overhaul the nation's health care system — including promises made by President-elect Barack Obama to ban the use of pre-existing condition exclusions in health insurance — will not come to pass.
"It's a bet against Obama being successful," he says, "because if Obama is successful in the next few years, this product has no value."
Collins, however, says the timing of the rollout is a coincidence.
"We started work on this product years ago," he says.
Still, Collins admits he's not counting on the federal government to fix what ails the health insurance market.
"We're also uncertain about what kind of reform is coming down the road," Collins says. "In the meantime, it's a great tool to use for financial planning purposes for your future security."
9(MDAyNzUwMDI2MDEyNTA3MTU5NzcyNTQyNA004))
MICHELE NORRIS, host:
From NPR News, this is All Things Considered. I'm Michele Norris.
MELISSA BLOCK, host:
And I'm Melissa Block. Now from the "has-it-come-to-this?" file: insurance against becoming uninsured - really. United Healthcare is rolling out a new product that lets people pay a premium to guarantee they can buy health insurance in the future if they lose coverage they currently have on the job. NPR's Julie Rovner explains.
JULIE ROVNER: United Healthcare calls the new product Continuity. It's for people who already have jobs with health insurance, but who worry they might lose it. The idea is that if you're healthy enough to get an individual health insurance policy now, you can lock in that coverage, even if you might not need it until later. Richard Collins is head of United's product lines for individuals.
Mr. RICHARD COLLINS (President, Individual Line of Business, United Healthcare): It's designed to allow people to buy a policy today and to essentially guarantee their insurability for the future because in most states, medical insurance is underwritten and your eligibility is not guaranteed.
ROVNER: Of course, you have to pay for the privilege of reserving your right to that future coverage. For every month you don't use the coverage, you pay 20 percent of the premium of the individual policy you're basically keeping on hold. Collins himself bought the first continuity policy. It has a $2,500 deductible.
Mr. COLLINS: The policy was $250 a month, and my premium for the policy is $50.
ROVNER: That's 20 percent of the premium. So, if at some point, Collins loses his job and his group health insurance, he can activate that coverage and simply pay the full premium. Collins says the product is intended to appeal to baby boomers in their 40s and 50s who may be facing early retirement or job insecurity and want to be sure they can bridge the gap until they're eligible for Medicare. But Robert Laszewski, a health policy analyst and insurance consultant, says he wonders why anyone would want to buy this kind of coverage.
Mr. ROBERT LASZEWSKI (President, Health Policy and Strategy Associates): I've been in the health insurance business for 35 years. I think I understand the business pretty well. I'm trying to think of somebody who would buy this. It would have to be somebody who wears a belt and suspenders at the same time. I mean, someone who has health insurance that is somehow afraid they're going to get laid off and COBRA won't be enough.
ROVNER: COBRA being the federal law that guarantees you can continue your job-based coverage for 18 months after you lose your job. For one thing, Laszewski says, the mere existence of the new continuity insurance is a bet against the passage of a federal health overhaul anytime soon.
Mr. LASZEWSKI: You would only buy this, and United Healthcare would only expect you to buy this, if you didn't think there was going to be guaranteed insurability down the road. So you're really, by paying this premium or offering this product, betting against President-elect Obama following through on his promise to guarantee insurability.
ROVNER: Laszewski also says the idea of having to buy insurance for insurance points out a major flaw in the nation's health system.
Mr. LASZEWSKI: It really takes our system that does not guarantee insurability to the extreme. It says that there is this risk, and not only is there this risk, but this risk is worth about $600 per person per year. It puts a price on the risk, and I think it underscores what an unacceptable risk it is.
ROVNER: Collins of United Healthcare says the timing of the Continuity plan's rollout was a coincidence - that it's been in the works for several years. But he also said there's no telling what kind of changes, if any, will emerge from Washington in the near future. Julie Rovner, NPR News, Washington. Transcript provided by NPR, Copyright National Public Radio.
