2 posts tagged “nase”
Mega Life & Health & Midwest National Life Finally Get What They Deserve!
This is a great day in the health insurance industry! Rarely is an insurance company held liable for improper conduct. The majority of the time the "Big Guy" takes advantage of the "Little Guy" and sadly the "Little Guy" has no recourse. But this is not the case today! After many years of repeated violations of insurance conduct laws the NAIC- (National Association of Insurance Commissioners) has levied one of the largest market conduct fines in insurance history against Mega Life & Health insurance company, Midwest National Life insurance company, a.k.a. Health Markets, a.ka. NASE - National Association for Affordable Services, formerly known as U.I.C.I. The fine is 20 Million Dollars and in my informed opinion, it is not nearly enough and it has come much to late!
Health Markets has been slinging their garbage for many years across the country to many thousands of innocent consumers who had no idea the extreme limitations included with the so called insurance coverage provided by Mega & Midwest. They have consistently offered "schedule plans" which pay out an average of only $100,000 per illness (even though the policy is sold as a plan that covers you to One Million or Two Million lifetime). Their coverage traditionally also has no "stop loss number". This has lead to many innocent consumers suffering catastrophic financial losses.
The lack of a "stop loss number" is a very dangerous policy design. To further explain. The term 80/20 is often used when describing how a health insurance policy works. The typical major medical health insurance policy has an 80/20 of $10,000 "co-insurance" percentage split. This quite simply means that after you have satisfied your calendar year deductible the insurance company will pay 80% ($8,000) and the insured will pay 20% ($2,000) of the first $10,000 in medical bills that you incur. This first $10,000 is known as the "stop loss number". After this brief sharing arrangement is over the insurance company pays 100% up to $5 Million per insured for the rest of that calendar year for in network treatment. Everything starts over again on the first of each subsequent year. This greatly reduces the risk to the insured and it is a standard policy design feature included with most legitimate health insurance policies.
In stark contrast, in the case of the "schedule plans" offered through the two aforementioned companies, the terms "co-insurance" and "stop loss" are very rarely if ever discussed with a prospective insured. This is because they have a direct effect on how much the insured will pay in the event of a worse case scenario. Worse yet, Mega & Midwest have traditionally been offering their policies with No Stop Loss Number. This means that if the bill is One Million Dollars, the consumer would pay 20% of that amount ($200,000) before the insurance company would pay 100%. However, with the $100,000 maximum pay out per illness clause included with their insurance contract, Mega & Midwest would still only be responsible for $100,000 regardless of the size of the bill! What a sweet deal for Mega & Midwest. Arguably the worse part about the coverage they offer is the fact that it costs the same or more than a major medical policy without all of the dangerous limitations included with their schedule plans.
Would you buy a policy like that if it was fully explained to you? Most definately not, and the NAIC apparently agrees. This is the primary reason why after a 3 year 29 state investigation, Health Markets has finally had to face up to all the fraud they have been responsible for. On May 29th, 2008 they were hit with a $20 Million fine. Furthermore, a scathing "Market Conduct" report has been written as well. To read all about it visit: http://www.insurance.wa.gov/oicfiles/marketconduct/2007mc/RSA05292008Final.pdf
Market Conduct Report: http://www.insurance.wa.gov/oicfiles/marketconduct/2007mc/MegaReportFinal.pdf
If you or a loved one have fallen victim to this organization and have purchased one of their "insurance products" please do not hesitate to contact me via the contact us page of our web site @ www.smallbusinessinsuranceservices.com for a complete review of your situation and an immediate replacement of your coverage. The risk to you and your loved ones is much to great if you remain "insured" by any of the policies offered by this organization. You can also contact me directly toll free (866) 724 7123 or via email: steve@sbisvcs.com
If you are a business owner, self-employed or an employee of a company that is not offering medical coverage though your employer, you may have to undertake the frustrating, daunting and time consuming task of purchasing health insurance on your own. If this is the case, there are certain things that you can do become an informed consumer so you can ensure that you are purchasing the type of health insurance coverage you really need at a price you can afford.
When you purchase a health insurance plan, it is important that you balance four important variables:
wants, needs, risk and cost, before you spend your money.
Although you may "want" a health plan that offers you 100% coverage and a $5 Copay for prescription medications, you may not "need" this type of health plan if you are healthy, take no medications and do not have any significant health related "risk" factors.
Since a 100% health plan will "cost" significantly more than an 80/20 Plan, it may not be in your best interest to pay higher monthly premiums for 100% coverage if you are currently healthy.
Although no one knows exactly when they will actually use their insurance coverage, considering these four key variables prior to purchasing a health plan is a good rule of thumb.
It is also critical for health insurance consumers to understand that all plans, even 100% Plans, have some form of coverage limitations. Knowing what your policy DOES NOT cover, is more important than knowing what it DOES cover.
The following is a list of 10 key questions that should help health insurance consumers to better understand the coverage limitations of the plans they are considering purchasing. Make sure you ask your insurance agent these questions BEFORE purchasing a health insurance policy.
1. What insurance company do you represent and are you a "captive" agent, "independent" agent or an insurance "broker?" "Captive" agents represent ONE insurance company's products only.
An "independent" agent or insurance "broker," on the other hand, typically represent many quality insurance carriers and can sell a variety of different insurance products without any contractual restrictions.
BEWARE! Dealing with a "captive" agent may limit your choices, since these agents can only sell that particular insurance company's health plans.
2. What is the plan's calendar year Deductible and would I have to pay a separate deductible for each family member if everyone in my family became ill at the same time? The majority of health plans have a per person calendar year deductible, for example, $250, $500, $1,000, or $2,500. Some plans are designed so in a "worse case scenario" only two family members will have to pay their deductible in any given calendar year.
BEWARE! Some plans will require each person in the family to pay their calendar year deductible. This can be a huge financial burden if everyone in the family was involved in an accident or if members of the family became ill at the same time. Many plans have a separate drug deductible before the plan will pay for any medications. Make sure you know what deductibles you will be responsible for before you buy a health plan.
3. What is the plan's Coinsurance percentage and what Stop Loss Number is this percentage based on?
These percentages are typically based on a specific dollar amount, known as the "stop loss number." Here's where it get's tricky. Quite often, health insurance plans have different "stop loss numbers". I have seen some plans that have a "stop loss number" as low as $2,000 and as high as $25,000 or some with none at all.
Let's figure out the insured's maximum out of pocket on an 80/20 plan that has a $1,000 deductible and an 80/20 split of the first $5,000 ("stop loss number.")
$1,000 + 20% of $5,000 ($1,000) = A Maximum Out of Pocket of $2,000.
Now, let's figure out the insured's maximum out of pocket on an 80/20 plan that has a $250 deductible and a $10,000 "stop loss number."
$250 + 20% of $10,000 ($2000) = A Maximum Out of Pocket of $2,250. (Note: Total does not include any separate "service deductibles" or access fees. Many low quality plans also have these.)
Again, after this brief 80/20 cost sharing with the insurance company, also know as a the coinsurance percentage split, most major medical plans will pay 100% of in-network covered charges up to the Lifetime Maximum amount that is specified in the policy.
BEWARE! Some policies on the market are sold with NO stop loss, but still list a coinsurance percentage. Therefore if you purchase an 80/20 with no stop loss, you will actually be paying 20% of all of your medical bills each calendar year. So unless you want to be responsible for 20% of all of your bills, make sure you find out what the "stop loss number" is BEFORE you purchase a health plan!
4. What is the plan's Maximum Out Of Pocket Expenses per year? This expense is a total of all deductibles, plus all coinsurance percentages, plus all applicable "access fees", "service deductibles" or other "fees" outlined in your policy.
BEWARE! Quite often agents neglect to tell prospects about hidden fees, so make sure you have a good grasp on the basics, like deductibles, coinsurance & stop loss numbers. Always ask about additional "fees" BEFORE you purchase the plan!
5. What is the plan's Lifetime Maximum Benefit if I become seriously ill and does the plan have any "per illness" maximums or caps? The majority of health insurance plans have a two million or five million dollar Lifetime Maximum Benefit. The Lifetime Maximum Benefit is the maximum amount the insurance company will pay if you or someone in your family becomes seriously ill.
BEWARE! Some policies will stipulate that there is a maximum benefit cap of $100,000 per illness. This means that you would have to develop many separate and unrelated life-threatening illnesses costing $100,000 or less to qualify for the five million dollar Lifetime Maximum Benefit. Mega Life & Health, Midwest National Life a.k.a. Health Markets, formerly U.I.C.I., endorsed and promoted by the National Association for the Self Employed (N.A.S.E) and the Alliance for Affordable Services are known for selling "schedule" plans with "per illness caps."
6. Is the plan a Schedule Plan, in that it only pays a certain amount for a specific list of procedures? Some health plans only pay a specific dollar amount for certain procedures, despite the fact that the procedure often cost more than the plan stimulates.
BEWARE! Mega Life & Health, Midwest National Life a.k.a. Health Markets, formerly U.I.C.I., endorsed and promoted by the National Association for the Self Employed (NASE) and the Alliance for Affordable Services are known for selling "schedule" plans.
7. Does the plan have unlimited doctor copays or is there a limited number of doctor copay visits allowed each year? Many quality plans have no limit on the number of times you can use your doctor copay.
BEWARE! Several plans have a limit of how many times you can go to the doctor each year for a Copay. Quite often, the limit is 2-4 visits per year.
8. Does the plan offer Prescription Drug Coverage and if it does, what type of coverage? Some plans offer prescription drug benefits on both generic and brand name medications right away. Other plans will require you to pay a separate outpatient prescription drug deductible before you can obtain your prescription medication for a Copay.
BEWARE! Today, many plans offer NO outpatient prescription drug Copay options. Typically, these plans only provide the insured with a discount prescription card which only offers the insured a 10-20% discount on prescription medications. This can lead to catastrophic out of pocket expenses to the insured.
9. Does the plan have any reduction in benefits for Organ Transplants and if so, what is the maximum the plan will pay out for an organ transplant? The majority of quality major medical plans treat organ transplants as any other illness. This means that the insurance company will cover the insured until the Lifetime Maximum Benefit of the plan is reached. Again, in most cases, this Lifetime Maximum is five million dollars. You should accept no less than one million dollars of coverage for Organ Transplants.
BEWARE! Today, some plans only pay a $100,000 maximum benefit for organ transplants. Plans that offer limited organ transplant coverage are extremely risky, since organ transplant procedures often range in the neighborhood of $350-$500K. In addition, it is not uncommon for a transplant patient to need a second organ transplant. Keep in mind, that the $100,000 maximum payment for organ transplants on many plans also includes the cost of expensive anti-rejection medications. If you have an organ transplant, you will quickly reach the $100,000 maximum benefit, which means that you will be required to pay for costly anti-rejection medication out of pocket. This can lead to catastrophic out of pocket costs to the insured.
10. Does the plan have any separate "services deductibles" or "access fee" for each hospital admission or for each outpatient test? Some plans, like Assurant Health's "CoreMed" plan have a separate $750 hospital admission fee for the first three days of each hospital stay. These hospital admission fees may also be called "Access Fees" on other policies. Typically the insured is responsible for paying these access fees for each hospital admission in addition to their calendar year health plan deductible.
Many plans also have a separate deductible for emergency room visits. These deductibles are in place to discourage policyholders from using the emergency room as a doctor's office. Typically, these ER deductibles are waived if the patient is admitted to the hospital.
BEWARE! "Access fees" and "service deductibles" are separate from your plan's calendar year health plan deductible. Be aware that many plans now have benefit "caps" or "access fees" for out-patient services, such as, physical therapy, speech therapy, chemotherapy, radiation therapy, etc. These "benefit caps" could be as little as $500 for each out-patient treatment, which will leave the insured responsible for the remaining balance that is over $500.
Again, "access fees" are additional fees that you may have to pay per treatment before the insurance company will pay the provider. These fees can quickly add up. For example, if you need to have 40 outpatient chemotherapy treatments, and you must pay a $250 "access fee" per treatment, you would have to pay an additional 40 x $250 = $10,000.
Remember, purchasing a health plan is the most important purchase you will ever make. Insist that your insurance agent explain to you exactly what your health plan does and does not cover and take the time to read the "fine print" in the plan brochure and ask questions about terminology you don't completely understand.
In addition, when you receive your health insurance policy in the mail, don't just detach your insurance cards and place them in your wallet or purse and then throw your insurance policy in your desk drawer or filing cabinet. Take the time to sit down and read your policy page by page.
Once you receive your policy, you have a 10-day free look period, so if your coverage is not what you thought you purchased, you have time to call the insurance company and cancel the policy without incurring any fees.
Finally, if your being pitched a health plan that seems to good to be true (e.g. all pre existing conditions are covered, the plan is significantly cheaper than all other plans) contact your state's Department of Insurance BEFORE you buy the policy. Your state's Department of Insurance can tell you if the insurance company is registered in your state and can also tell you if there have been any complaints against that company that have been filed by policyholders.
Remember, if you suspect that your being scammed or you think the agent is trying to sell you a fraudulent insurance policy, (e.g. you have to become a member of a union to qualify for coverage) your state's Department of Insurance can also check to see if any prior disciplinary action has been previously taken against that agent.
Whatever decision you make in regards to your health insurance, please always remember to heed the following words of wisdom.
- "If it sounds too good to be true, it probably is!" ..........and
- "If you only buy on price, you get what you pay for!"
About the author: C. Steven Tucker, is the President of Small Business Insurance Services, Inc. He is a multi-state licensed insurance broker who has been serving the Small Business community and Self-Employed for 15 years. C. Steven has served as a Subject matter expert for the Wall Street Journal and Fortune Small Business Magazine and hosts his own internet radio show, entitled, "Health Insurance 101." He is also touted for being a consumer watchdog against greedy insurance companies, insurance scams and unscrupulous agents on Twitter.
