Insurers targeting individual customers

As companies scale back on employer-sponsored health benefits, several big insurers are stepping up efforts to sell coverage to Nevada's uninsured.

Their plan: Offer individual policies that let consumers elect higher deductibles and savings accounts, among other components, to lower premiums to as little as $54 a month.

Observers say the expanding individual-insurance market comes courtesy of a rise in the number of companies, especially smaller businesses, that have pared coverage as a result of double-digit cost increases.

A study from the Rand Corp., a California research nonprofit, revealed that health-insurance expenses rose nearly 30 percent from 2000 to 2005 for companies with 25 or fewer workers. Companies with 25 to 49 staff members saw a 16 percent jump in coverage prices, while businesses with 50 to 99 employees experienced a 25 percent cost gain.

Rand Corp.'s researchers said the pricier coverage didn't make small businesses likelier than large companies to cancel health plans, but a separate report showed stark declines in the ranks of smaller employers providing insurance.

A recent survey from SurePayroll, a Glenview, Ill., paycheck-processing company, found that 44 percent of U.S. businesses with 100 or fewer workers offer health insurance, leaving more than half of small-business employees without coverage through their jobs. What's more, the number of small operations providing health insurance dropped 32 percent compared with a year earlier. Also, research from the University of Minnesota found that 59 percent of all employers in Nevada offered health insurance to workers; that number dropped to 53 percent in 2005.

Insurers see opportunity in those figures.

When employees aren't losing coverage altogether, they're facing restricted plans that don't insure dependents, said Ellen Laden, a spokeswoman for Golden Rule Insurance Co., a UnitedHealth Group subsidiary that last week entered the Nevada market to provide individual coverage.

About 19 million Americans buy their own health plans today, up from 17 million two years ago, Laden noted. An additional 45 million Americans -- 15 percent of the country -- lack insurance altogether. In Nevada, the proportion of uninsured is even higher, at about 21 percent, or 456,000 residents, the Robert Wood Johnson Foundation reports.

And numbers from the Kaiser Family Foundation show 70 percent of uninsured Nevadans either work or live with a full-time worker. Nationally, 40 percent of individuals who bought Golden Rule plans with health-savings accounts in 2007 said they were previously uninsured.

"Nevada has a huge pool of working people who have to buy their own health insurance, particularly those who work for small business," Laden said. "Add to that group the self-employed, particularly those who own retail shops or businesses that involve tourism. Outside Las Vegas, you have farmers, ranchers, truckers, self-employed consultants -- all of those people also have to purchase their own health insurance."

So insurers are responding with lower-cost individual coverage.

Golden Rule's plans include high-deductible options with lower premiums, policies linked to health-savings accounts and more traditional coverage with co-pays. The price breaks can be substantial. Golden Rule's "saver" plan covers often-costly treatments such as in-patient hospital visits, outpatient surgeries and CAT scans, while limiting coverage for routine doctor visits. With a $2,500 deductible, the saver plan can cost as little as $54 a month in premiums. For $95 a month, deductibles can fall to $1,500.

Other insurers are aggressively targeting the demographic segment that Mohit Ghose, a spokesman for trade group America's Health Insurance Plans, called "the young and invincible" -- the 20-somethings who frequently opt out of company health insurance because they believe it's an unnecessary expense.

Anthem, the state's second-biggest insurer after UnitedHealth's Sierra Health Services, created its Tonik line of plans for people ages 19 to 29. The policies cover preventive treatments, serious emergencies, dental care and eyeglasses for premiums ranging from $91 to $178 a month. Other Anthem plans for individuals include Lumenos, which emphasizes preventive care and starts at $96 a month, and RightPlan PPO, which features $40 co-pays on doctors' visits and no medical deductibles.

About 95,000 of Anthem's 270,000 or so members in Nevada purchased individual plans, and the insurer expects both individual and group lines to grow in the Silver State thanks to sustained population growth, said Scott Workinger, Anthem's regional vice president of sales for California, Nevada and Colorado. The company is developing a new individual-oriented product line with up to 10 plan choices. Executives have scheduled a rollout before the end of 2008.

"Statistics indicate employer-sponsored coverage nationwide continues to decline," Workinger said. "As a response, Anthem Blue Cross and Blue Shield wants to offer as many different options to folks as we can, and also to reach the uninsured."

Aetna officials weren't available to discuss specific plans by press time, but the company did send a statement noting that it entered the individual market here with its Aetna Advantage Plans for Individuals and Families in May 2007. The program's eight choices include hospitalization plans, high-deductible policies, health-savings accounts and traditional PPO coverage.

America's Health Insurance Plans is also promoting individual insurance. The association's research found that many consumers believe individual coverage is far too expensive to afford, so the group published statistics showing that the average individual health plan costs $2,613 a year, or $217.75 a month, in premiums. It's also taken on the widespread belief that insurers apply conditions that make individual coverage tough to obtain: Its research showed roughly 90 percent of consumers who seek individual policies will get them.

But one reform in particular would bolster the sale of individual plans, Ghose said.

He'd like to see individual consumers reap the tax benefits that consumers and businesses enjoy when they buy employer-sponsored insurance.

"The system treats the employed person better than it does the individual who seeks out coverage on their own," Ghose said. "You and your employer get a tax break, but you don't get any tax break if you go out and do the right thing for yourself and your family. Maybe a tax incentive might be the last bit of sweetener to get people to purchase coverage."

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.