Life Insurance Blog News: Insurers Getting More Personal

The political bickering about health care is nowhere near complete, but that doesn’t mean your health insurance is sitting idle.

Regardless of what happens in Washington, experts say, people insured through an employer should be braced to bear more costs and more intrusion into their personal choices.

More than 59 percent, or 177 million Americans, had employment-based private insurance plans in 2007, the U.S. Census Bureau reported. As those plan costs routinely jump more than 10 percent annually, insurance companies and employers are desperate to find ways to trim the bottom line.

One popular and potentially “positive and invasive” cost-cutting route is health care incentives, programs that encourage or require employees to curb smoking or obesity, said Jay Wolfson, a University of South Florida public health professor. It’s also good business.

“Large employers have an opportunity to save money as an organization by helping people become more productive on the job,” said Wolfson, the associate vice president at USF Health.

Employer interest in wellness programs has exploded in the past five years. An estimated 70 percent of major U.S. employers now offer incentives ranging from smoking-cessation classes to offering gift cards or cash in exchange for completing a detailed health risk assessment.

This cost-cutting strategy quickly is evolving beyond educational posters in the company lunchroom, according to several major Florida insurers, including Cigna and Humana. Some companies are requiring workers to complete health surveys as a condition of employment or continuing coverage. More companies are choosing to add a surcharge on plans for people who use tobacco.

Insurers are allowed to ask

An employer can’t ask particular personal questions about its workers, but health insurance is a business contract between an individual and a third-party insurer, Wolfson said. Those companies have a legal right to know about the people they cover. The details are critical for insurers to calculate future medical care costs and set fees in the group plans.

“Expect to be asked these questions,” Wolfson said.

These assessments and surcharge fees work because it’s appealing to corporations to encourage employees to improve their health, and it’s morally acceptable to shun people who smoke, said Bill Allen, director of the bioethics and medical professionalism at the University of Florida’s College of Medicine. Employees, however, may change their attitudes if incentives start treading on more accepted personal choices.

“They may not go after smokers if they know that charging for drinking Big Gulps was the next step,” Allen said.

Free services and screenings

Incentive programs already in place don’t go that far, advocates say. Humana, which insures 300,000 Floridians, has one large employer that waives the cost of diabetes supplies if the employee completes a diabetes management class and complies with related care, said Jill Sumfest, Humana’s Central Florida market medical officer. The result is savings for the employee and the insurer.

For Tampa’s employees, incentives come in the form of free services and screenings, risk manager Michael Laperche said. Through Humana, the city began offering six major cancer screenings a year, free. The tests can help identify disease earlier and thus reduce medical costs, he said. Participation in the voluntary program varies.

Laperche said his focus is on the roughly 12 percent of city employees who are heading toward chronic disease, people who just started taking medications and likely are 30 to 40 pounds overweight. Turning around their health now can affect the bottom line of a group plan estimated to cost about 15 percent more in 2011.

“If we can identify them, then the health plan can intervene,” he said.

One Humana incentive offered to city employees has raised some eyebrows for having a Big Brother feel to it, Laperche said. Some employees have been startled by phone calls from Humana nurse case managers, who can track a person’s medical activity such as failing to fill a prescription. Laperche said it’s important employees know it’s the insurer calling, not the city’s human resources department.

For some, there has to be a line

Self-insured companies such as Tampa’s Pepin Distributing have to clearly separate the handling of incentive programs, said Natalie Mealey, employee relations manager. She is the only Pepin employee who knows details about employees participating in company incentive programs, which include smoking cessation and weight loss.

“In no way are we crossing the lines,” she said.

For example, nearly 100 of 300 eligible employees signed up a year ago for a voluntary weight loss incentive program. Pepin agreed to cover about $2,000 in doctor visits and consultations if the employee lost and maintained a predetermined amount of weight for a year. If he or she didn’t follow through, the employee would be responsible for paying Medi-Weightloss Clinics.

Fewer than five employees have failed to meet the goal, Mealey said.

Increasing intrusion into a person’s health may lead some to assume costs for procedures themselves, Allen said. That increases the risk that someone might not seek treatment or that a doctor goes unpaid.

There’s also the serious risk that people won’t share medical information with their insurance companies, which then can claim fraud.

“If somebody is going to pay for the treatment themselves, they don’t need to let the insurance company know,” he said.

“We’re not as comfortable saying this in health care because it’s a matter of life and death,” Allen said. “People need to realize that if they want insurance, they need to share (personal information). If they don’t and it comes up, they may end up losing their coverage.”

Source: Tampa Tribune, Fla.

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Erwin Chua

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