Comments on: Running Out Of Benefits http://www.healthinsurancecolorado.net/blog1/2008/07/14/running-out-of-benefits/ Research and discussion of the Colorado health insurance industry and the healthcare crisis in America. Tue, 16 Mar 2010 22:14:50 +0000 http://wordpress.org/?v=abc hourly 1 By: Don Levit http://www.healthinsurancecolorado.net/blog1/2008/07/14/running-out-of-benefits/comment-page-1/#comment-11231 Don Levit Tue, 29 Jul 2008 16:57:44 +0000 http://www.healthinsurancecolorado.net/blog1/?p=438#comment-11231 Louise: A bill was recently introduced in Congress to change ERISA. If passed, group plans would have to provide up to $10million in lifetime benefits, and then provide inflation protection to boot! I know it's not an unlimited benefit, but don't you think this bill would prove just how comnpassionate we really are? To read the short bill, go to: http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.6528:. You may need to add the : once you get to the web site. Don Levit Louise:
A bill was recently introduced in Congress to change ERISA.
If passed, group plans would have to provide up to $10million in lifetime benefits, and then provide inflation protection to boot!
I know it’s not an unlimited benefit, but don’t you think this bill would prove just how comnpassionate we really are?
To read the short bill, go to:
http://thomas.loc.gov/cgi-bin/query/z?c110:H.R.6528:.
You may need to add the : once you get to the web site.
Don Levit

]]> By: Don Levit http://www.healthinsurancecolorado.net/blog1/2008/07/14/running-out-of-benefits/comment-page-1/#comment-11100 Don Levit Thu, 17 Jul 2008 01:01:32 +0000 http://www.healthinsurancecolorado.net/blog1/?p=438#comment-11100 Jay: You are correct about insurance being very inexpensive, once a certain level is reached. This is why thinking about 2 distinct policies makes sense. Actually, we need not go as high as $1million to divide the 2 insurers. If one has a policy that pays an annual maximum at $50,000, in which the next policy takes over for the next million on up, the secondary policy will shave about 70% off of a traditional policy premium. What is needeed, in my opinion, is establishing 2 distinct pools, in which those having claims of $50,000 and below are not subsidizing claims of $50,000 and above (and vice versa). If you are with me on this, how might we insure the first $50,000? Don Levit Jay:
You are correct about insurance being very inexpensive, once a certain level is reached.
This is why thinking about 2 distinct policies makes sense.
Actually, we need not go as high as $1million to divide the 2 insurers.
If one has a policy that pays an annual maximum at $50,000, in which the next policy takes over for the next million on up, the secondary policy will shave about 70% off of a traditional policy premium.
What is needeed, in my opinion, is establishing 2 distinct pools, in which those having claims of $50,000 and below are not subsidizing claims of $50,000 and above (and vice versa).
If you are with me on this, how might we insure the first $50,000?
Don Levit

]]> By: Jay http://www.healthinsurancecolorado.net/blog1/2008/07/14/running-out-of-benefits/comment-page-1/#comment-11099 Jay Wed, 16 Jul 2008 23:38:57 +0000 http://www.healthinsurancecolorado.net/blog1/?p=438#comment-11099 Actuaries currently see very little difference in pricing policies with $2 million lifetime limits vs. anything higher than that. So, keeping with the point of Louise's article, a standard lifetime max for insurers would be a $5 million lifetime max (or anything between $2 million and $5 million). 99.99% of people would not go over that, but for those that do the government could provide the re-insurance. Agents with companies like MEGA, Midwest National, or selling those discount policies through Assurant, for example, would be required to inform the client (maybe have the client sign a form) that those policies don't qualify for the govt re-insurance if policy maximums are met. It's all just hypothetical and for discussion, but it's a cheap solution for the govt and it's a good backup to a free market health care system. Actuaries currently see very little difference in pricing policies with $2 million lifetime limits vs. anything higher than that. So, keeping with the point of Louise’s article, a standard lifetime max for insurers would be a $5 million lifetime max (or anything between $2 million and $5 million). 99.99% of people would not go over that, but for those that do the government could provide the re-insurance. Agents with companies like MEGA, Midwest National, or selling those discount policies through Assurant, for example, would be required to inform the client (maybe have the client sign a form) that those policies don’t qualify for the govt re-insurance if policy maximums are met.

It’s all just hypothetical and for discussion, but it’s a cheap solution for the govt and it’s a good backup to a free market health care system.

]]> By: Don Levit http://www.healthinsurancecolorado.net/blog1/2008/07/14/running-out-of-benefits/comment-page-1/#comment-11098 Don Levit Wed, 16 Jul 2008 22:44:34 +0000 http://www.healthinsurancecolorado.net/blog1/?p=438#comment-11098 Jay: I agree with your assessment regarding the $250,000 deficit. The same would hold true if he was insured for $5million, and had $5,250,000 of claims. How much coverage is enough? Apparently, you would say "whatever it takes to preserve one's assets." What would your answer be, if that type of policy was unaffordable? Don Levit Jay:
I agree with your assessment regarding the $250,000 deficit.
The same would hold true if he was insured for $5million, and had $5,250,000 of claims.
How much coverage is enough?
Apparently, you would say “whatever it takes to preserve one’s assets.”
What would your answer be, if that type of policy was unaffordable?
Don Levit

]]> By: Jay Norris http://www.healthinsurancecolorado.net/blog1/2008/07/14/running-out-of-benefits/comment-page-1/#comment-11096 Jay Norris Wed, 16 Jul 2008 21:19:59 +0000 http://www.healthinsurancecolorado.net/blog1/?p=438#comment-11096 Don: A person with $250,000 net worth would only need to have lifetime medical expenses of $1,250,000 to go bankrupt with a $1,000,000 lifetime maximum. Or, they would only need $350,000 worth of medical expenses in one year to go bankrupt on a policy with a $100,000 annual maximum. Those are not uncommon amounts. So that person may or may not know about those maximums on their policy, but their assets are <i>not</i> protected. Don:
A person with $250,000 net worth would only need to have lifetime medical expenses of $1,250,000 to go bankrupt with a $1,000,000 lifetime maximum. Or, they would only need $350,000 worth of medical expenses in one year to go bankrupt on a policy with a $100,000 annual maximum. Those are not uncommon amounts. So that person may or may not know about those maximums on their policy, but their assets are not protected.

]]> By: Don Levit http://www.healthinsurancecolorado.net/blog1/2008/07/14/running-out-of-benefits/comment-page-1/#comment-11092 Don Levit Wed, 16 Jul 2008 20:01:56 +0000 http://www.healthinsurancecolorado.net/blog1/?p=438#comment-11092 Louise: I thought the primary purpose of insurance was to protect one's assets. If a person has a net worth of $250,000, a $1million benefit, without the insurance, would have bankrupted him 4 times. Don Levit Louise:
I thought the primary purpose of insurance was to protect one’s assets.
If a person has a net worth of $250,000, a $1million benefit, without the insurance, would have bankrupted him 4 times.
Don Levit

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