The Copay Mystique

Jul 4, 2008

  1. somarco
    Offline

    somarco GA Medicare Expert

    Posts:
    29,445
    Likes Received:
    3,279
    State:
    Georgia
    I have posted most (if not all of this before) but still I get calls from folks on this forum who want to know how I make presentations that result in 95% of my clients buying HDHP plans. Most of my clients are families, most are women, but I do have a few that are men.

    Here is info from a shared lead that came in earlier in the week.

    Male 41, female 40, 2 kids (youngest is 3).

    Currently have a Copay Select and paying $640 per month. He feels like he is throwing away his money since "GR doesn't pay for anything". He is on chol meds which are ridered. The meds run $90 monthly bringing his total outlay to $730.

    He wanted a lower deductible for less money.

    Like that is going to happen . . .

    I priced a few plans that are similar to GR, with deductibles in the $2000 - $2500 range.

    Aetna had a $2000 deductible copay plan (limit 6 visits at $40 each) for $460.

    He liked the $180 savings.

    That savings gap would close once Aetna rated up for chol meds as the premium would increase to around $480. Still, a savings of $140 monthly.

    I then walked through a side by side comparison, showing him Copay Select, Aetna 2000, and . . . Aetna HSA 3000.

    We talked about the 6 visit limit and what would happen if he used up his limit.

    We also talked about the $40 rate up . . . and the $200 Rx deductible.

    For his $90 med he pays an extra $240 over the remaining months plus the full cost of the med for the next 2+ months until he satisfies the $200 Rx deductible. Once he satisfies the deductible he pays a $40 copay.

    So . . .

    For the next 6 months his med costs $600 under the Aetna copay plan . . . the same as he currently is paying.

    Next year his med will cost him $1260 (premium + deductible + copays).

    So where is the benefit of the copay?

    It does not exist.

    Now what happens on a major claim?

    His Copay Select has $4500 OOP (including deductible) + copays.

    The Aetna copay plan has $4000 OOP (including deductible) + copays.

    But what about the HSA plan?

    For the $3000 HSA the premium is $351 before loads; about $380 after loads. That's an $80 savings vs the copay plan from Aetna.

    What does he get with his $80 savings?

    When he does go to the doc he pays $60 instead of the $40 copay.

    What about his Rx?

    It cost's $1330 including the added premium.

    Net savings?

    About $900.

    OOP on a major claim?

    $3000 vs. $4000.

    If he opted for the $5000 HSA his net savings would be another $1000 per year.

    Bottom line is, he went with the $3000 HSA.

    I have yet to find a situation where the HSA does not beat the copay plan. It's all a matter of educating the client.
     
    somarco, Jul 4, 2008
    #1
  2. CHUMPS FROM OXFORD
    Offline

    CHUMPS FROM OXFORD Guru

    Posts:
    10,261
    Likes Received:
    50
    State:
    Ohio
    I love that approach, although, I don't use it as much here because of the lower premiums.

    Quick question...do you ever use one of the HSA/Copay comparison tools? I think I remember seeing them float around this Board in the past. One may be in an excel file.
     
  3. Crabcake Johnny
    Offline

    Crabcake Johnny Guru

    Posts:
    14,811
    Likes Received:
    19
    State:
    South Carolina
    My niece's situation beats a HSA - will not note the condition (HIPPA) but she's on an Aetna PPO - all in-office testing is a copay (in her case thousands) and meds are a copay.

    She's beating a HSA.
     
  4. dmiller90
    Offline

    dmiller90 Guru

    Posts:
    637
    Likes Received:
    7
    State:
    Illinois
    but still I get calls from folks on this forum who want to know how I make presentations that result in 95% of my clients buying HDHP plans

    Because you are Selling

    Its because you believe in Health Savings Accounts, And YOU think its Best for the Client, and its got nothing to do with "What is Best for the Client" and that should be your goal, but from your Post, it does not sound that way.

    Typical Old School Sales, Convince and Educate the Customer on what YOU Believe in.
    :no:

    Time for me to start selling in Georgia Again!!!!
     
    Last edited: Jul 4, 2008
  5. Crabcake Johnny
    Offline

    Crabcake Johnny Guru

    Posts:
    14,811
    Likes Received:
    19
    State:
    South Carolina
    I educate - they choose. I don't ram anything down my client's throats.
     
  6. dmiller90
    Offline

    dmiller90 Guru

    Posts:
    637
    Likes Received:
    7
    State:
    Illinois
    And that is exactly how it should be done. But like I said in an earlier post. Typical old school sales.

    Great Post you nailed it on the Head, Successful people in this buisness know this, others will write a book on Why they do what they do???????????:SLEEP:
     
  7. bluemarlin08
    Offline

    bluemarlin08 Guru

    Posts:
    1,926
    Likes Received:
    6
    When he does go to the doc he pays $60 instead of the $40 copay.


    Are you assuming the Aetna contract lowers doc visits to 60? Wow, that would would be a huge discount in my area, much larger than any other carrier by a ton.


    My approach is using best case/ worse case scenario's, and explaining that if they are use to a co pay plan they must shift how they view their insurance and remember the savings. I find some families just can't get comfotable with the HDHP, regardless of the savings.
     
  8. dmiller90
    Offline

    dmiller90 Guru

    Posts:
    637
    Likes Received:
    7
    State:
    Illinois

    I notice he post several amounts on Negoitiated Savings to clients, and I guarantee the information is not 100% Correct. Not a good thing to be quoting to your Client.
     
  9. Crabcake Johnny
    Offline

    Crabcake Johnny Guru

    Posts:
    14,811
    Likes Received:
    19
    State:
    South Carolina
    You cannot discuss the amount of a re-priced doctor visit when selling a HSA. It depends on the doctor, services rendered and discount.

    I sold a HSA just over a year ago - my client got slammed with a $600+ bill that otherwise would have been a flat copay.

    Just the doctor fees were over $400 - specialist and the discount was modest. He was highly pissed.

    If you're saying things like "don't worry...you'll pay around $60 for a visit after repricing" you're either lying to get the sale or you don't have a large enough book to have a lot of clients calling about claims experience.

    Get a few faxed EOBs from your clients then go on and on about HSAs to me.

    Let your client get a script for a $260 med that would have been a $30 copay then go singing about HSAs. At that point they don't care about your math - it's emotional. If you don't understand that then....
     
    Last edited: Jul 4, 2008
  10. myinsurebiz
    Offline

    myinsurebiz Guru

    Posts:
    4,552
    Likes Received:
    639
    State:
    Hawaii
    So dmiller - what is your approach to a sale when someone wants to lower their outlay?

    I'm curious to see how you would rebut Somarco if you followed him on a lead call?

    Give it to me baby . . .

    Tom
     
Loading...