BRONZE Plan's Large OOP = Big Need for Ancillary Products

[AllenChicago]

The majority exchange shoppers will experience rate-shock when they plug in their information and realize that the SILVER plan is priced above what they're willing to pay...even if they qualify for a subsidy.

Most will use their subsidy money to purchase the lower priced "Bronze" plan, instead. This may alleviate the rate-shock, but the moment they start having medical needs, Bronze plan members will experience Deductible, Co-Pay and Coinsurance Shock.

Story: Higher costs for PPACA's bronze plans | LifeHealthPro

You jump out of one frying pan and land in another. However, for our business, the Bronze plan is a golden opportunity for using Critical Illness and, particularly, Injury plans to eliminate the potential $12,000+ family out-of-pocket in any given year.

-Allen

 

[HealthGuy]

Yes Allen but will there be money left over to buy it?

 

[Justin Bilyj]

Good question! I have been wondering about this...

 

[ABC]

Good post,

It will be interesting to see how these plans look.

We know that the plan can not have more than a $2,000 deductible single and $4,000 family.

Out of pocket single $6250 & $12,500 family.

I wonder if the deductible is included in the OOP?

We could easily see a 30% co insurance of $20,000 in claims.

If you are selling the exchange then ancillary could an easy sell but are you going to have to deal with underwriting?

If you are selling people under the 250% FPL they are going to be eligible for cost reduction subsidies so I don't think they would buy. 300%-400% FPL they could be good candidates for some type of medical bridge policy.
It better be a really easy app with very little medical questions.
I doubt that will happen but who knows.

 

[Yagents]

The 2k deductible max is only for group. Bronze/silver on the exchange can have higher deductibles.

Yes, everything, including deductible and Rx and Dr copays, go towards OOP of $6350 for 2014.

 

[AllenChicago]

Yes Allen but will there be money left over to buy it?

HealthGuy, you make a good point, because even Bronze will be expensive compared to what people are paying now. Therefore it will be more difficult to add on the ancillary plans.

Over the past 5 years, I've added Injury and/or Critical Illness plans to 9 of 10 major medicals sold. But in each instance, I'm saving the person(s) significant amounts of money to begin with. So coming up with $100 a month or so for an Injury and Critical Illness plan combo is no big deal.

To make this work with Bronze, Silver, etc., you'll have to go back to your basic training, and use fear-based logic, because you won't be saving them anything in premiums. i.e.. "Mr. Smythe, if you're not comfortable owing many thousands of dollars to doctors and hospitals, I suggest you enhance your protection with Critical Illness and Injury riders that can eliminate your deductible. That's what most people are doing nowadays."

-ac

 

[Yagents]

You're biggest opportunity for ancillary sales??............people who decide to go uninsured and pay the paltry penalty. They'll have plenty of money, but are not stupid enough to go completely bare.

Shhhhhh...... don't tell anybody about this idea.

 

[TXINSURANCE]

Yes Allen but will there be money left over to buy it?

Some will.

Who is buying your ancillary products now?

My guess is you are not selling a ton of $40 CI and $45 accident on $80/mo health plans.

 

[Ann H]

To make this work with Bronze, Silver, etc., you'll have to go back to your basic training, and use fear-based logic, because you won't be saving them anything in premiums. i.e.. "Mr. Smythe, if you're not comfortable owing many thousands of dollars to doctors and hospitals, I suggest you enhance your protection with Critical Illness and Injury riders that can eliminate your deductible. That's what most people are doing nowadays."

Fear based logic isn't a favorite sales technique, but now it's a lot more logical. "Mr. Smythe, if you're not comfortable with the IRS controlling your premiums, and the HHS, DOL, IRS, and Homeland Security having access to your medical records and other private information, I recommend that you........"

 

[AllenChicago]

Some will.

Who is buying your ancillary products now?

My guess is you are not selling a ton of $40 CI and $45 accident on $80/mo health plans.

You're right TxInsurance, because I'm not selling to this market. My leads are for, and sales are to, small business owners who are older individuals, or older families. They understand and appreciate the HDHP/HSA concept and the need for fixed-priced ancillary products as part of the package.
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You're biggest opportunity for ancillary sales??............people who decide to go uninsured and pay the paltry penalty. They'll have plenty of money, but are not stupid enough to go completely bare.

Shhhhhh...... don't tell anybody about this idea.

That's an interesting concept, YAgents. I don't come across many of the "kinda stupid" prospects now, but I'm sure that there will be a whole new category of people who decide to let their health insurance go in 2014. I'm thinking a $5,000 deductible Short Term Medical (STM) for them along with C.I. & Injury ancillary, if appropriate.
-ac