Innovations in the Individual Market


Today, the WSJ reported on new plans from WellPoint, Aetna and Humana reaching out to two groups of individuals – young immortals aged 19 to 34 years old and near retirees aged 50 to 64 (pre-Medicare).
The article has a some interesting facts:
* Tonik plans by WellPoint are for those 19 to 34, starting at as little as $100 a month (available in 11 states this year). Plans have three different levels with corresponding deductibles – “Thrill Seeker, with a $5,000 deductible, Part-time Daredevil, with a deductible of $3,000, and Calculated Risk Taker, which has a $1,500 deductible. Rates can vary by state, ZIP Code, age and gender. In Los Angeles, a 25-year-old male or female can buy a Tonik plan with a $5,000 deductible for as little as $77 a month. A 50-year-old male or female can buy the same plan for $244 a month.”
* “In two of the states where Tonik was rolled out this year, 20% of WellPoint’s new sales are coming from the plans.”
* Simply Blue plans sold by Blue Cross and Blue Sheild of Minnesota, with premiums from $70 to $150 a month (exclusive of maternity benefits). From 5,000 to 10,000 have been sold since December 2006.
* Most people can find coverage in the individual market – just 11% of applicants 18 to 24 years old and 30% of those 60 to 64 years old are rejected.
* [My own note] A functional high risk pool protects those rejected for individual insurance with access to an affordable (and subsidized) comprehensive plan. 34 states have high risk pools, with the addition of North Carolina.
This article is a great example of how the private health insurance market is innovating. While politicians with little understanding of health insurance debate universal health care proposals, the private sector is delivering coverage options that people want and will pay money out of pocket for.
For comparison, Tonik Plans in New Hampshire cost from $132 to $163 a month, for a deductible of $5,000 to $1,500. A 29-year-old in Maine would pay from $598 to $244 for Anthem plans with similar deductibles. Maine insurance regulations do not allow Tonik Plans to be sold in Maine, as they are in New Hampshire, Connecticut and other states.