Singular Pay Loophole

[blaze1x]

I work for an agency and we only sell Assurant. There's a guarantee issue that's coming up on the horizon, but mainly just Assurant. Anyway, when we do a presentation and we take a look at our competitors we work through the high price by pointing out that they have a singular pay loophole. Depending on the carrier the singular pay loophole basically says that in a situation where you have multiple surgeons (like a car accident or serious major surgery) the insurance carrier will pay 100% for the first surgeon and a fraction for all other surgeons (usually that fraction is half). We also tackle the "allowable" charge and the reasonable and customary charge. We have a huge binder where we carry copies of all the policies.

My question is, as insurance agents have any of you collected a lot of stories where these loopholes have caught somebody in the wallet? Obviously we have several.

 

[Crabcake Johnny]

Interesting post. When I first left Mega I noticed Carefirst Blue Cross had similar language for their Personal Comp policy - that if more than 1 surgery was involved for the same accident/illness the "largest" surgery was paid at 100% and the rest were paid at like 50% or something to that affect. Common sense told me something must be up since complaints and lawsuits would be filed all over the place.

I called Carefirst. They told me that clause only states how doctors are compensated. So you get into a car accident and severely break your arm and leg. The leg is the most expensive paid at 100%. The arm is paid at 50% - which would lead an agent or client to believe they eat the rest.

Not correct...at least in Carefirst's case. In their contract balance billing is not allowed for any doctor or hospital in network. So doctors basically have to eat it. Out of network you're screwed.

An analogy would be Medicare. Say out found out before a surgery that Medicare only allowed $5,000 for a surgery that's estimated to be $10,000. You do not owe the other $5,000 - you cannot be balanced billed if the doctor/hospital is accepting Medicare since by default they are agreeing to the Medicare fee schedule.

 

[somarco]

I know agents who go to extremes to promote how much better their policy is vs. another. In fact, I worked with a guy early on when I transitioned from large group to individual MM and he was quick to point out how the CGI plan was much better than BX, Humana, KP and others.

Of course (as I figured out on my own) the CGI policy was also lacking in some areas where the competitor had richer benefits for a better price.

Most consumers don't have the patience or willingness to learn the intricacies of their policy. If they did, they would never buy a Mega plan.

Consumers are broad brush folks who tend to discount things they don't understand or believe they will ever need. Why would anyone ever need more than $5000 in Rx benefits during a year? Everyone knows the hospital bill is the largest portion of your claim. So what if the plan caps outpatient expenses at $2500 per year or has an annual cap of $100,000? Who needs that?

Assurant is a good company with a good contract. That does not mean they are the best, or even the best option for your client.

I have 7 different carriers that I use on a regular basis. (Some more regularly than others). When I talk with a client I may want to put them with Golden Rule (since I place about 60% of my business with them) or KP (where another 10% or so goes) but just because that is what I want doesn't mean it is good for the client.

I really like Aetna. Perhaps more so than any other carrier. Their customer service is A+ in my book with KP & Golden Rule a close second.

Everyone else is an also ran.

But Aetna doesn't fit everyone. They have a narrow market focus (at least here in GA) and it is rare that they even come in to play.

A long time client is rolling off COBRA in another month and the best fit for him is Time. Their 3 year rate guarantee bridges him over to Medicare. Even though Time is charging slightly more for lesser benefits than Coventry (the spreadsheet winner) both of us are more comfortable going with Time vs. the other options.

This week I submitted 5 apps. Two went to Aetna, one to Coventry, one with KP, one with BX. To even consider BX is a rarity but it was a fit for the client. This was a very unusual week in many regards.

I personally think you do a disservice to your client when you only show one carrier, no matter how good that carrier may be.

 

[Crabcake Johnny]

I personally would love to sell more Aetna. However, when a family age 45 is $696 a month for a $2,500 deductible plan it's kinda tough. Their HSA prices are obscene. I can now only fit singles into Aetna.

 

[CHUMPS FROM OXFORD]

I notice that very few peoplw talk about "Celtic." I haven't written a policy with them in about three years. But about five years ago, I placed about 75 policies with them.

Does anybody here use them?



Will he tie the record tonight?

 

[Crabcake Johnny]

Are they still a company?

 

[somarco]

Celtic was never a player in GA, at least not in recent memory. They had the only STM that did not ask if you had ever been turned down for coverage and as such, wrote a fair amount of STM business for years.

I have placed exactly 1 MM policy with them in the last 3 years. The only reason they show up now is because their numbers look good on a spread sheet, at least some of the time.

I really have no need for them and don't see any in the future.

 

[Crabcake Johnny]

Mediocre plans with mediocre rates and mediocre underwriting for horrible commissions? Not likely. I don't see how this outfit gets 1 app a year.

 

[blaze1x]

Interesting post. When I first left Mega I noticed Carefirst Blue Cross had similar language for their Personal Comp policy - that if more than 1 surgery was involved for the same accident/illness the "largest" surgery was paid at 100% and the rest were paid at like 50% or something to that affect. Common sense told me something must be up since complaints and lawsuits would be filed all over the place.

I called Carefirst. They told me that clause only states how doctors are compensated. So you get into a car accident and severely break your arm and leg. The leg is the most expensive paid at 100%. The arm is paid at 50% - which would lead an agent or client to believe they eat the rest.

Not correct...at least in Carefirst's case. In their contract balance billing is not allowed for any doctor or hospital in network. So doctors basically have to eat it. Out of network you're screwed.

An analogy would be Medicare. Say out found out before a surgery that Medicare only allowed $5,000 for a surgery that's estimated to be $10,000. You do not owe the other $5,000 - you cannot be balanced billed if the doctor/hospital is accepting Medicare since by default they are agreeing to the Medicare fee schedule.

This addresses the singular pay loophole issue and has an alternative theory for the language. Does anyone else agree with this interpretation. I've read the clauses. In Blue Cross Florida, Humana of Florida, Continental or Florida, Golden Rule, Aetna, etc., they ALL have language that says in an instance with multiple surgeons, the first gets paid at 100 hundred percent and everyone else either gets fifty percent or less, depending on the carrier.

Thoughts?

 

[Crabcake Johnny]

Better darned well contact the carriers with those clauses and find out the scoop. If you run around telling clients falsehoods about the competition that's no only unethical but opens you up for a lawsuit. In the case of Carefirst it's a non-issue if it's in network. If you're having a major surgery out of network it's neither her nor there since you're screwed with any company.

If you have Assurant managers telling you to trash talk the competition I'd walk off that job in a day. Sitting down with clients and whipping out "competitors" plans and trashing them is no way I'd want to make a living.