Recently, I ran across a pamphlet published in April 1931 by the Union Central Life Insurance Company.
The pamphlet’s simple, faded cover was not too exciting. The title was “Fundamentals of Safe Investment.” But the first page contains a single-sentence paragraph worth slogging through:
“During the past sixty-four years, the Union Central has invested considerably more than half a billion dollars, and the broad principles which this Company’s experience in the field has proved to be practical and essential are given here in the hope that they may serve the individual investor.”
One sentence declares the company’s competence and the hope of what the company wanted to achieve by giving away 32 pages of content. Perhaps naive, but sincere, the publication is simply what Union Central knew about investing, delivered in a sober moment after the chaos of 1929.
This pamphlet got me thinking about the Affordable Care Act, in the non-linear way I go about jumping from thinking about old pamphlets to health insurance.
Here’s my attempt at writing the first sentence, 1931 pamphlet style, in an open letter to anyone talking to consumers about health insurance:
“If you want to talk to us, the consumers, about enrolling in health insurance, first be prepared to have a conversation about the fundamentals of insurance. Otherwise, we’re likely to act irrationally; perhaps not on purpose, but with detriment nonetheless.”
Union Central opined on the fundamentals of investing in a straightforward, conversational style. The pamphlet is a great read.
Union Central gathered up bits of investment philosophy scattered around the company and published a pamphlet, a written conversation of sorts.
Today, for health insurance, the task is similar, the outcome equally noble: Pull the pieces of information together in a simple conversational framework for the benefit of consumers, and we’ll have met our obligation in the smart evolution of the markets.
Today, benefits professionals can build a conversation around three fundamental concepts of health insurance, which are always in order: Risk, plan and optimization.
Or, to restate that in 1931 pamphlet style: Know the reason for insurance, what plans are the best possible fit, and how to use the plan you choose.
Risk: Know the reason for buying.
If someone is hurt or sick, the care can be costly.
There are also indirect costs, such as lost wages and loss of quality of life.
Make consumers think of their health as property and acknowledge the risks surrounding it.
Don’t limit the conversation to, “Hey, there’s a new law that makes health insurance mandatory but more affordable. Want to know more?”
True, the legal background must be disclosed, but the real reason to buy a plan is to mitigate the risks of unexpected health conditions.
Health.gov and countless other websites present varying amounts of risk-based information.
But qualitative and quantitative information about risk should lead everyone’s discussion and not just be static content on a few websites. A benefits professional should point out that, although medical insurance protects against many important risks, not all risks are covered. Medical insurance does not, for example, protect against the indirect costs associated with a health episode, or the direct costs of long-term care.
Plan: Know the best possible plan.
The new health insurance marketplaces will provide information to consumers about health plans.
The goal should be to help consumers align their risks with plans that offer substantial protection against the risks.
No single plan will be perfect, and the measure of substantiality will vary by price, amount and circumstance of coverage.
Despite the imprecision, there is a best possible list of plans to be generated for each person, reducing the likelihood of choosing an inappropriate plan.
Optimization: Know how to use the plan you choose.
This part of the conversation begins but never ends.
There are the usual medical episodes that can befall an average person under average conditions.
Or, a tragic scenario of subplots can overtake a family, one hard-to-imagine scenario, but possible.
Problem: We do not read our health insurance contracts on a weekly basis, a horrible past-time that is itself hard to imagine.
Unless consumers have recently used a health insurance plan, they don’t have the working knowledge needed to extract the best possible outcome from a plan. Communicating with consumers, especially consumers new to insurance, at intervals throughout their health care life is critical to helping them optimize their health insurance plans.
The framework for organizing a conversation is a vision for understanding, not a script for a Web-based transaction or an ill-timed sales call at dinner time.
And, it applies to you, regardless of who you are: A publicly-funded navigator, insurance agent, application counselor or that friend-of-a-friend who’s always referenced.
The conversation on health plans will be started and re-started, but it will always require a sustained commitment to functional consumer thinking.