ABSTRACT

Focus groups have told the health insurer that people want coverage for wellness exams and access to prescription drugs, a doctor, an emergency room, and a hospital if treatment involves a short-term stay, such as a woman giving birth. FULL TEXT

Despite criticisms of their small scope, a national health insurer that serves this area believes limited-benefit health plans are the most affordable option to help pay for day-to-day medical care for the nation's 47 million working uninsured.

CIGNA Voluntary, a division of Philadelphia-based CIGNA, provides limited-benefit coverage for more than 9,200 members in New York, including 149 in Syracuse, 16 in North Syracuse, 95 in Binghamton, and 38 in Utica, says Rodric Hurdle-Bradford, spokesman for CIGNA Voluntary, who is based in Phoenix, Ariz.

The plans target part-time employees who don't have access to health insurance through their employer because they don't work full-time hours, says Mark Bailey, CIGNA Voluntary's senior vice president, based in Dallas.


"Our role is to give these folks access to coverage that is going to, by and large, cover the lion's share of services they're going to have," he adds.

Focus groups have told the health insurer that people want coverage for wellness exams and access to prescription drugs, a doctor, an emergency room, and a hospital if treatment involves a short-term stay, such as a woman giving birth.

The plans are frequently used in high-turnover industries that pay an hourly wage of $8 to $12 per hour, Bailey says. The industries include restaurants, retail, hotel and lodging, manufacturing, staffing, and security.

The plans usually cost the equivalent of one to two hours of wages per week, or $10 to $20 per week, Bailey says, noting employers have the option of contributing.

"For the price of a night out at your local restaurant, you can have health-insurance coverage," he adds.

Employers use these plans to attract and retain employees. CIGNA declined to disclose any of its employer clients.

"Having a health-insurance plan offered through the employer to the employee creates a greater retention, so we're finding that turnover is less," he says.

Employers save money on the expense of replacing workers. Bailey cites the Web site worksourcepartners.com as indicating it costs about $3,600 to replace a $7-per-hour employee after posting the position and recruiting, interviewing, and hiring a candidate.

Bailey also points to a statistic from the Washington, D.C.-based Employee Benefit Research Institute that indicates 89 percent of the uninsured population uses fewer than $2,000 in medical benefits per year.

But CIGNA Voluntary also realizes the merits of limited-benefit health plans remain the subject of debate.

The May 2009 issue of Consumer Reports lists plans labeled as "limited benefits" as one of seven clues "a health plan might be junk." The report describes the labeling as a "sure warning sign of inadequate coverage."

The publication conducted an investigation into individual health-insurance policies and found some people have coverage "so riddled with loopholes, limits, and exclusions that it won't come close to covering their expenses if they fall seriously ill."

For its investigation, Consumer Reports hired a national expert to help evaluate a range of health-plan policies and interviewed consumers who bought those policies, as well as insurance experts and regulators to learn more.

Hurdle-Bradford says CIGNA Voluntary is aware of the report and has questioned Nancy Metcalf, senior program editor at Consumer Reports, about the story, even though the article does not mention CIGNA Voluntary.

In a phone conversation with The Central New York Business Journal, Metcalf says the article primarily focuses on people who buy insurance in the individual market. She also believes the publication is in a position to say publicly if someone should avoid a limited-benefit health-care plan.


We don't believe that limited-benefit health plans have any place in the health-insurance marketplace," Metcalf says, noting that her problem with these types of plans is that people who have them believe they have health insurance.

"But if they ever get anything wrong with them, they will be bankrupt," Metcalf says, noting the maximum payouts for treatments is usually no more than $1,000 or $2,000 per year.

Despite the negative review on limited-benefit health plans, Hurdle-Bradford contends CIGNA Voluntary's research shows the plans can help.

He says the carrier conducts focus groups, which have helped in shaping the clarity CIGNA Voluntary's communication and marketing materials so people know the product they're purchasing isn't as extensive as a regular health-care plan.