Limited Medical Plans:Unlimited Possibilities

William KramerReliance Standard Life Insurance Company

March 22, 2007

Why should we care?

As Americans:Percentage of Nonelderly Americans Without Health Insurance Coverage, 1987-2004

Why should we care?

As Americans:

Uninsured Nonelderly Population by Family Poverty Status, 2004

Why should we care?

As Employers:

Annual Growth Rates for Health Insurance Premiums,

Workers Earnings, and Overall Inflation, 1988-2005

Why should we care?

As Benefits Producers:

Nonelderly Adult Uninsured Workers by Firm Size, 2004

What are options

Big GovernmentMore lawsMore taxes

Big InsuranceHigher deductibles/HSAs

Limited Medical

History of Limited Medical

25-plus years

Origins in Big-Box, Retail, Restaurant industries

Designed for part-time, seasonal, hourly and temporary employees

Differentiator for employers fighting turnover, lost productivity

Nonelderly Adult Uninsured Workers by Industry, 2004

Workers in wholesale and retail trade and personal services account for 63.4 percent of all uninsured workers!

Nonelderly Adult Uninsured

Workers by Work Status, 2003

More than half of all working uninsured are employed full time!

Today’s Plans

Guaranteed acceptance/no adverse selection

No Pre-Ex

No deductibles

Wellness care included

Rx discounts

Ancillary and dependent coverages available

COBRA eligible

HIPAA, ERISA compliant

Why Limited Medical WorksOut-of-Pocket Spending as a Percent of Total Private Spending, 1960-2014

Health insurance has replaced out of pocket spending on medical expense

Percentage of Covered Workers Facing Various HMO Copayment Amounts for Physician Office Visits, 1996-2005

Doctor copays are going up!

Why Limited Medical Works

Average Copayments Per Prescription in Multi-Tier Arrangements, 2000-2005

Drug costs are outpacing other health expenses

Why Limited Medical Works

What’s Next?

Increasing, maybe explosive growth

Mini-Major PlansSplit the difference

Gap PlansGet employees to a place where they can

participate in their Major Medical

How to Evaluate

1 2 3 45

Unfavorable Favorable

Access

1 2 3 45

Barriers to Access Open Access

Flexibility

1 2 3 4 5

Off the shelf Customized to my work force and

company culture

Value

1 2 3 4 5

Out of reach/Irrelevant Affordable/Valuable

Ease of Administration

1 2 3 4 5

High-touch Turnkey

How to Evaluate

15-20 = BUY IT! This is probably a best-in-class plan

12-15 = Consider it You may want to shop around or push back

8-12 = Keep an eye on it Something about the case could change, but it’s

not a match right now

0-8 = Forget it

Q&A