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Big Business Learns To Love Mini Med

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A coalition of blue chip employers is out there promoting the idea that a little medical insurance is better than none.

The HR Policy Association, Washington, a group that represents human resources executives at more than 250 giant U.S. employers, has set up a National Health Access program to help 1.2 million part-time workers and other workers associated with member companies who now lack major medical coverage.

The workers are now getting brochures advertising an employee-paid “discount card” program for $6.99 per month; 2 types of major medical coverage; and, in the middle, 3 different levels of mini medical insurance plans.

The typical mini medical plan is a limited-benefit health insurance plan that comes with an annual benefits maximum of $1,000 to $100,000. Mini med plans already cover about 750,000 U.S. residents, but most of the issuers have been small.

The Uniprise unit of UnitedHealth Group Inc., Minnetonka, Minn., will be insuring the NHA mini med policies, and Hewitt Associates Inc., Lincolnshire, Ill., will be administering the policies.

Other companies starting or expanding mini med programs include units of WellPoint Inc., Indianapolis; Aetna Inc., Hartford; and Nationwide Mutual Insurance Company, Columbus, Ohio.

Fringe Benefit Group Inc., Austin, Texas, is running the Nationwide program. “We’ve had a huge reception from brokers who were wary of limited medical in the past,” says Brian Robertson of Fringe Benefit. “The agents out there have really taken note of the fact that carriers like Nationwide are getting into the limited-medical business.”

Sales of supplemental medical insurance products, which include mini med plans and hospital indemnity policies, increased to $300 million in 2003, up 55% from the 2002 total, according to Eastbridge Consulting Inc., Avon, Conn.

Sellers of mini med plans say they would rather sell the buyers major medical plans. But “we had to confront the brutal facts,” says Thomas DeNoma, a special risk expert at Nationwide’s health plans unit. “In 10 years, health care costs could equal wages.”

Census figures show that health coverage penetration rates are stable for full-time workers but dropping for part-time workers. Unfortunately, more jobs are temporary or part-time jobs.

Even state public health agencies are relying on limited-benefit plans to fill coverage gaps.

Utah, for example, has a state mini med program for adult Medicaid beneficiaries. The state found that 60% of the program members reported improvement on 1 or more health indicators, according to AcademyHealth, Washington, a health policy think tank.

Large carriers could increase the value of all mini med plans by persuading more of the doctors who show up in mini med plan provider directories to see the plans’ members.

For a mini med plan member, getting $5,000 in annual insurance benefits might be nice, but getting $25,000 knocked off the $35,000 retail price for a c-section would be better, experts say. Without discounts, a $2,000 annual benefit maximum is enough to fill health coverage needs for more than 80% of plan members, Robertson estimates.