By Linda Koco
A civic leader recently told me about the big shock she experienced while attending a hospital-led seminar on vision health challenges. This has insurance product implications, as you will see.
This woman had gone to the session to bone up on current vision issues and to see whether she should add them to her list of priorities. But she was stunned when she walked into the room. “It was wall-to-wall people, standing room only,” she said. “I had no idea that this subject is of such intense interest!”
Most of the people there seemed to be age 50 and up, she added pointedly.
“No surprise there,” I thought. You see, 5 people I know, all over age 50, have lost vision in one eye in the past couple of years–and they know of others also so afflicted. True, most 50-somethings have full vision. But it is not as rare as it once was to hear of 50+ vision ailments.
All of this is no doubt a reflection of the aging population. As longevity increases, our nation progressively has more older people, and older people often have eye problems (plus other health problems). The National Institutes of Health and the Centers for Disease Control both testify to that. (See www.nei.nih.gov/eyedata/pdf/VPUS.pdf and www.cdc.gov/nchs/data/agingtrends/02vision.pdf for examples.)
This trend will become particularly noticeable as more and more baby boomers reach the mature years. In fact, judging by the crowd at the eye seminar, it may already be happening.
Insurance experts who are not yet gearing up for this avalanche of boomer health issues had better get on the stick. Let’s take the vision issue as an example.
Vision care insurance has been around for several decades, but it really began gaining currency 10-15 years ago when employers began adding it to group benefit plans or offering it as an employee-paid voluntary benefit plan.
The going marketing message for these plans is that they are low-cost products that provide a highly valued benefit.
After all, most provide benefits for simple eye exams and eyewear. Lots of people need and use both benefits, but the costs do not run up the medical claims meter the way other procedures do, and internal limits on coverage also curb big-dollar claims. So, that helps keep the rates low. Additionally, though some plans also cover some types of corrective laser surgery, the more involved surgeries are typically left to the major medical plan.
So, vision insurance seems like a win-win product to offer, and to own. You could say, the eyes have it. But how long will it last? If more people develop eye conditions that increasingly need more intensive levels of care, as is likely as boomers age, then the related insurance claims (particularly at the major med level) are bound to go up–as are the premium rates. What then?
Some critics might shrug off concern about that with an insincere “oh well.” After all, they might coo, “managing benefits, claims, utilization and rates are what insurers are supposed to do. If they mess it up, it’s their fault.”
Like many criticisms, such arguments have a grain of truth. The insurance industry is definitely all about managing risk, for instance. It needs to watch trends and anticipate changes and make appropriate adjustments in plans and prices.
Yet, the demographic trend of 76+ million aging boomers reaching infirmity might not be as easy to anticipate as one thinks. It is difficult, for instance, to know just what percentage of that population will submit vision (or other health) claims. With modern medical treatment galloping along at breakneck speed, the country might end up having a larger percentage of people who never go blind but who do experience prolonged vision problems and treatments.
Critical illness insurance professionals always are beating on this particular tom-tom. Increased longevity plus medical advances have created a society in which more people survive serious illnesses and for longer periods, they keep saying.
The benefits structure needs to catch up with that, not necessarily by retracting coverage but perhaps by spurring healthy living or restructuring coverage.
That is important not only for the CI and vision insurance sectors but also for major medical, long term care, immediate annuity and other age-sensitive insurance sectors.
Most insurers do watch claims activity like hawks. But that is not enough. They need to watch pre-claims trends, too, and they need to determine how to turn the aging demographics from a threat into an opportunity.
One suggestion to help: Stay tuned to trends identified by the field force. The advisors are out in the community all the time, talking with people, hearing the buzz. If eye problems surge, they will usually see it, so to speak. Knowing what to look for can be the first step toward a solution.
The demographic trend of 76+ million aging boomers reaching infirmity might not be as easy to anticipate as one thinks. It is difficult, for instance, to know just what percentage of that population will submit vision (or other health) claims.”