Big Business Learns To Love Mini Med

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

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

The workers are now getting brochures advertising anemployee-paid "discount card" program for $6.99 per month; 2 typesof major medical coverage; and, in the middle, 3 different levelsof mini medical insurance plans.

The typical mini medical plan is a limited-benefit healthinsurance plan that comes with an annual benefits maximum of $1,000to $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 AssociatesInc., Lincolnshire, Ill., will be administering the policies.

Other companies starting or expanding mini med programs includeunits of WellPoint Inc., Indianapolis; Aetna Inc., Hartford; andNationwide Mutual Insurance Company, Columbus, Ohio.

Fringe Benefit Group Inc., Austin, Texas, is running theNationwide program. "We've had a huge reception from brokers whowere wary of limited medical in the past," says Brian Robertson ofFringe Benefit. "The agents out there have really taken note of thefact that carriers like Nationwide are getting into thelimited-medical business."

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

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

Census figures show that health coverage penetration rates arestable 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-benefitplans to fill coverage gaps.

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

Large carriers could increase the value of all mini med plans bypersuading more of the doctors who show up in mini med planprovider directories to see the plans' members.

For a mini med plan member, getting $5,000 in annual insurancebenefits might be nice, but getting $25,000 knocked off the $35,000retail price for a c-section would be better, experts say. Withoutdiscounts, a $2,000 annual benefit maximum is enough to fill healthcoverage needs for more than 80% of plan members, Robertsonestimates.