- The Washington Times - Thursday, June 30, 2005

Maryland today begins requiring major insurance carriers to provide limited health plans for uninsured companies in the state.

The plans, which are part of a law that was passed last year, are meant to be viable options for companies, especially small businesses, that cannot afford standard health insurance, said Brenda Wilson, with the Maryland Insurance Administration, the state’s insurance licensing and regulatory agency.

“I haven’t seen the rates [for the plans], but they should be cheaper,” said Ms. Wilson, the agency’s chief for health insurance and managed care.

Under the law, carriers that have at least 10 percent of the small-group health care market, which includes CareFirst BlueCross BlueShield and Mid Atlantic Medical Services LLC (MAMSI), will sell capped benefit plans.

The plans are available only to businesses that pay an average annual wage that is less than 75 percent of Maryland’s average salary.

Maryland’s average weekly wage reached $792 in the third quarter of 2004, according to the state’s most recent labor statistics.

Companies buying the plan must not have offered health insurance in the past 12 months.

The new law comes as health insurers increasingly offer starter-kit plans to uninsured employees in the hope of picking up more customers while making a dent in the nation’s uninsured population of 45 million.

The insurance plans generally have rates that are half of those for traditional managed-care or physician-network plans. But they have strict limitations on coverage.

“People in the uninsured population are vastly different, with the majority being insurable and making a decent income,” said Scott Krienke, vice president for individual markets at Assurant Health, a Milwaukee-based health insurer that started offering a limited-benefit plan earlier this month.

So far, the RightStart plan has enrolled 11,000 consumers in the District, Maryland and Virginia, Mr. Krienke said.

The plan has a deductible, which is what a consumer must pay before the insurer starts paying, of $500 to $2,500, about 50 percent less than deductibles for Assurant’s traditional plans.

The plan has coverage for doctor visits, prescription drugs and hospital stays, much like traditional health insurance. But the benefits are capped and employees start paying out-of-pocket once they exceed the coverage.

For example, one optional benefit limits members to two doctor visits annually, which are each covered by a $25 co-payment for doctors within a certain network, before they must start paying the total cost of the visit.

The program is meant to be a “stepping-stone” plan for uninsured workers, giving them enough affordable coverage to stay healthy, Mr. Krienke said.

But minimal health coverage could cause workers to become “underinsured” and more likely to forgo needed medical care and prescription drugs to stretch their health insurance dollars, according to a recent study.

Nearly 16 million Americans between 19 to 64 were underinsured in 2003, according to the study published this month in the health policy journal Health Affairs.

The study defined the underinsured as people whose medical expenses amount to at least 10 percent of their income.

Philadelphia-based health insurer Cigna Corp., Minneapolis-based insurer UnitedHealth Group, and Louisville, Ky.-based insurer Humana Inc. will start offering a limited health plan for businesses in the fall.

The companies developed the plans, part of a National Health Access program, with the HR Policy Association, a Washington trade group for senior human resource executives.

The health plans will be available to part-time, seasonal and contract workers who normally cannot be covered through their jobs, said association spokeswoman Marisa Milton. Details are still being finalized, she said.

Aetna Inc., the Hartford, Conn.-based health insurance company, also introduced a limited health plan this year.

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