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Health Insurance Providers Creating New Products Targeted At Individuals

Armen Hareyan's picture

A growing number of health insurers are creating individual plansthat target people in their 20s and 30s or early retirees who are notyet eligible for Medicare, the Wall Street Journalreports. The new products are being developed in part because manyemployers, especially smaller businesses, are dropping or limitinghealth care coverage. Many of the new individual plans have highdeductibles and low monthly fees, while some of the less-costly plansexclude expensive services such as maternity care. In addition, someplans encourage preventive care by not charging copayments forscreenings and checkups, and some cover only generic versions ofprescription drugs.

John Garamendi, California's lieutenantgovernor and the state's former insurance commissioner, is critical ofthese products, including WellPoint'slow-premium, high-deductible Tonik plan. He said, "The Tonik program isspecifically designed to create a significant profit for the insurancecompany," adding, "It is designed to cover everything that a 19- to34-year-old is not going to need. That happens to be the principalchildbearing age, and it doesn't cover pregnancy."

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WellPointspokesperson Christi Lanier-Robinson said that other WellPoint planscover maternity for those who are considering pregnancy and that 70% ofevery Tonik premium dollar goes toward medical care. She said, "Thereis a sizeable portion of the population who are not interested inmaternity coverage and don't want to pay for this benefit."

According to the Journal,in two states where Tonik was introduced this year, the plan hasaccounted for 20% of new sales. Other companies selling individualhealth plans targeted at these two groups are Aetna and Humana, according to the Journal.

Plans Available Only in Certain States

The new plans typically are available in states where regulations areless stringent, allowing the insurers to "choose the healthiest peopleas customers," the Journal reports. As a result, theplans "won't necessarily reach those among the roughly 45 millionuninsured Americans most in need of health coverage," according to the Journal (McQueen, Wall Street Journal, 8/21).

Reprinted with permission from kaisernetwork.org. Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat kaisernetwork.org/email. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, afree service of The Henry J. Kaiser Family Foundation.