Helping Your Clients Find 
        Affordable Individual Health Coverage 


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        In Today’s Economy, Affordable Individual Health Coverage is Key 


        A nationwide survey of licensed health agents conducted in March 2008 by Agent Media, the Association of Health Insurance Advisors (AHIA), the Council for Disability Awareness (CDA), and the National Association of Health Underwriters (NAHU) revealed that agents’ main challenge with selling health insurance is their clients believe they can’t afford it.


        You may have clients who believe they can’t afford health insurance, but it’s a perception you can help change – a perception that’s important to change. You can help your clients find affordable individual health insurance coverage.


        As an insurance agent, you know that having health coverage is critical – and not just for routine office visits, prescription drugs and other anticipated medical costs. With budgets stretched as much as they are now, it’s more critical than ever that people have health insurance to protect them from the substantial financial losses they can incur as a result of an unforeseen illness or accident.


        Today’s economy is forcing many people to reallocate their family budgets, and they may have less money available to spend on health care. The U.S. Department of Labor, Bureau of Labor Statistics recently reported that the rate of global consumer-price inflation reached an eight-year high in June 2008, mainly due to an increase in energy and food prices. As a result, some people will spend less on things they may consider “luxuries,” including health insurance and medical care.


        In fact, an article in the June 26, 2008 Wall Street Journal, “More Americans Delay Health Care,” suggests that increasing health care costs and possibly the slowing economy are causing some consumers to delay or avoid medical care. The article cites a 2007 report from the Center for Studying Health System Change which found that 17% of the insured people in their study delayed or went without needed medical care at some point in the past year, up from 11% in 2003. Most said that cost was a reason.


        By selling economical basic health coverage, offering HSA qualified health plans and using other money-saving tactics, you can change your clients’ perceptions and prove that the cost of health insurance is within their reach!





        Uncovering Your Client’s Needs

        It may be easy to sell on price by running quotes and selling the plan with the lowest premium. But your client’s coverage needs are just as important – and they determine the real value of their health plan.


        Does your client need a plan to cover the basics? First-dollar coverage? Optional benefits that can be added to the base plan ala carte? An HSA-qualified plan? The questions below can help you assess your client’s needs and lead you towards affordable solutions:


        What insurance benefits do you anticipate using? This will help you determine how benefit-rich (or basic) your client’s plan needs to be.


        How many times a year do you visit a family physician or specialist? Compare plan alternatives side-by-side to see how many visits are covered by a copay and if additional visits – that might need to be paid out-of-pocket – are eligible towards annual deductibles and coinsurance. Also, does your client’s doctor belong to a PPO network?


        Are you seeking insurance to cover you primarily in the case of a serious accident, injury or illness? If your client needs catastrophic coverage, it’s not likely they’ll want to pay for a plan with many first-dollar benefits.


        Will you utilize more comprehensive benefits or plan options such as Rx drugs, preventive care and supplemental accident? If so, see which benefits are covered standard on a plan, and/or how much it would cost to add them as options. Consider the out-of-pocket charges (deductibles, copays, and coinsurance), if any, that have to be met before the plan pays for the services, as well as any caps. It may be advisable to pay additional premium for an optional benefit when its coverage is richer than what’s offered on a standard basis.


        Would you rather pay for services as you use them (cost-sharing) or before you use them (premiums)? The answer to this question may relate directly to your client’s budget, access to cash, and anticipated usage of medical services. For example, if your client doesn’t plan on having any outpatient medical procedures, they may be willing to pay an additional deductible if the need arises versus pre-paying (via premium) for a benefit they may not even use.


        Are you comfortable having a higher deductible in exchange for lower monthly premiums or would you rather pay higher monthly premiums and have a lower deductible? This is another way to ask the previous question – and your client’s answer will tell you how much risk they’re willing to assume.



        Help your clients select the plan with the right price and coverage. With the right plan, your clients will pay for the benefits they’ll use – and not for those they won’t!


        Source: Adapted from’s Help Center FAQ “What’s the best health insurance for me?”



        Comparing Plans for the Right Fit

        America’s Health Insurance Plans’ (AHIP) consumer guide book Questions and Answers About Health Insurance encourages people who are making a health plan decision to compare these plan attributes:


        • premiums
        • coverage/benefits
        • access to doctors, hospitals and other providers
        • access to after-hours and emergency care
        • out-of-pocket costs (coinsurance, copays, and deductibles)
        • exclusions and limitations


        Go through the health plans your client is considering and talk about how each feature affects the plans’ cost. Your client may like one plan’s benefit structure more than another, but its monthly price may be outside of their comfort zone. On the other hand, the lower-premium plan may require them to pay high out-of-pocket costs for services they plan on using, such as prescription drugs or preventive care. Help your client determine how they’re going to cost-share and set their expectations for what, and how much, their chosen plan is going to cover.


        Finding the plan that hits the right “benefit and budget balance” for your client’s needs takes some questioning and numbers-crunching, but it’s a worthwhile effort to find the plan that fits best.





        Tricks and Tips to Keep Costs Down

        Try these individual health sales strategies to save your clients money on their health insurance:


        Sell IH as Stand-Alone Coverage for Dependents

        Consider child-only IH coverage as an alternative to group dependent coverage. Plans with child-only rates and optional kid-friendly benefits may cost your client less than dependent coverage on a group plan.


        Sell High Deductibles on Comprehensive Plans

        Benefit-rich plans touting first-dollar coverage, low copays and even cash-back healthy lifestyle incentives have higher rates than their more basic benefit counterparts. But choosing a high annual plan deductible will lower their monthly premiums! See how $2,500 or $5,000 deductibles can make even the most comprehensive health plan more affordable.


        Mix-and-Match IH Plans within a Family

        If you put mom and the kids on a comprehensive health plan and place dad on a basic benefit or HSA-eligible plan, the total premium may be less than if everyone was on the same, richer-benefit comprehensive plan. Why pay family rates on a comprehensive plan if only one or two family members will utilize its benefits?



        Built for Affordability: Basic Benefit and Consumer-Driven Health Plans

        Basic benefit plans and HSA-qualified high deductible health plans were developed specifically to address the market’s need for low-cost major medical coverage. They are an invaluable part of your sales portfolio, especially in today’s economy. While these plans lack many of the “bells and whistles” of more traditional comprehensive health plans, they still offer important benefits that consumers need and use, with the prices they shop around for.


        Basic Benefit Plans offer economical basic health coverage 

        Many consumers today can’t afford “rich” coverage, nor do they need the extensive benefits that come with more expensive plans. That’s why basic benefit plans are so popular – they’re reasonably priced with just the right amount of major medical coverage for hospitalization, Rx drugs, PPO office visits, and even preventive care. These plans require the policyholder to cost-share (pay additional deductibles for hospital visits and Rx drugs, for example) in exchange for low monthly premiums and essential major medical coverage when they need it.


        HSA Programs provide coverage and tax savings

        The combination of a HSA-qualified high deductible health plan (HDHP) and a Health Savings Account (HSA) proves to be an economical solution for many individual health consumers. HSA qualified health plans typically offer lower premiums than traditional copay plans, and the savings can be used to fund the HSA, which in turn provides significant tax advantages: tax deductions on HSA contributions, tax-free withdrawals for qualified medical expenses (even those not covered by the underlying health plan), and tax-free earnings on dollars accumulating in the account.


        In fact, HSA Programs may be a sensible choice for early-retirees because of their potential for financial savings leading up to age 65. Not only can they save on taxes by contributing money to their HSA, but individuals ages 50 and over are allowed to make annual “catch-up” contributions to help them accumulate more tax-free savings before they reach retirement. They can use the savings after retirement for qualified medical expenses, which may even reduce the need to use savings from other, less tax-advantaged retirement savings vehicles.


        Source: American Academy of Actuaries, Issue Brief: FAQs on HSAs Frequently Asked Questions on Health Savings Accounts, October 2007



        An Opportunity for You!

        Opinion Research Corporation’s March 2008 Consumer Economic Survey, commissioned by eHealthInsurance, yielded optimistic results about consumer behavior. Most people surveyed will try not to go without health insurance even if they can’t afford it. When faced with the prospect of not being able to afford health insurance, 89% of those surveyed would do something to ensure they can stay covered:


        • 52% would look for cheaper health insurance,
        • 48% would re-budget and spend less on something else,
        • 1/3 would take a second job to pay for it, and
        • 9% would go without their health insurance.


        This may be a great opportunity for you to sell low-cost individual health coverage to your clients and other people in your community who can afford – and value – the financial protection it provides!





        To secure permission to use this article for publication or online contact Celtic Insurance Company at 312-332-8591.


        Return to the Celtic Education Series articles on individual health insurance


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