Going solo Featured

7:00pm EDT December 26, 2009

In the past, people who were self-employed, who worked for small companies that did not offer group plans, or people who had exhausted their COBRA benefits were the only ones that chose individual health insurance plans.

However, health care reform may change people’s perception of the usefulness of the individual plan.

Anthony Benevento, vice president of sales and marketing for UPMC Health Plan, says that the upcoming changes may signal a renewed interest in individual health insurance plans.

“Any health reform plan that includes some sort of a mandate for persons to have insurance will bring with it more of a demand for individual plans or individual family plans,” Benevento says.

Smart Business spoke to Benevento about how individual plans are changing the health insurance field and what business owners need to know about them.

What role will individual plans play in the health insurance landscape in the years ahead?

Individual plans have been around for a long time. But, with all the changes that are expected to come with health care reform, there will likely be an increased need for individual plans. Any health reform plan that includes some sort of a mandate for persons to have insurance will bring with it more of a demand for individual plans or individual family plans.

Persons who work for small companies that cannot afford to offer health insurance or choose not to offer group insurance, or persons who are self-employed as well as those persons who are unemployed will need to examine their options in terms of individual health plans. As a result, the individual product could prove to be especially important in this era.

As individual plans become more well-known, will more employers look at dropping health care and letting their employees get health insurance on their own?

That answer will, of course, vary from employer to employer. However, the concept of having employees purchase individual plans has been available to employers for a long time and it has not drawn much interest.

The biggest reason large numbers of employers have dropped their health care plans is that employers continue to see the health benefits that they offer employees as one of the most important tools they have in terms of recruiting and retaining top employees. That is not likely to change.

What are the most important factors consumers have to consider when it comes to the individual product?

The two most important factors are quality and service. For consumers, the key issues in buying health insurance revolve around affordability, qualification and benefits. First, you must take a look at what you can afford and are willing to pay. Once you make a clear determination of what you can afford, the next step is to look for health insurance that will give you and your family the best health coverage at that price.

How can people determine what health insurance plan is best for them?

The type of plan that would be best for a person will vary based on individual preference. One will have to examine not just the monthly premium but also other potential out-of-pocket costs. Some of these costs include the amount of the deductible, how much you would have to pay for co-pays for physician visits, as well as whether preventive care — such as flu shots and medical checkups — is paid for by the plan.

There are many tradeoffs involved with choosing a health insurance plan. If someone wants low premium payments, he or she has to understand that, while monthly payments will be low, out-of-pocket costs for office visits and health care services will most likely be higher. If you want to control costs, you can choose a plan that has a higher premium.

What other issues should consumers be aware of when choosing a plan?

Consumers also will want to know about cost sharing for drug coverage. As part of your plan, do you get a lower price for a generic as opposed to a brand-name drug? Will you be assessed a co-payment for services, or is there co-insurance, where you pay a percentage of the total cost? These are things that people might not have looked at as closely when they were covered by group plans.

Will brokers continue to have a role in individual plans?

The establishment of health care exchanges would seem to minimize the role of brokers, but there will probably still be consumers who would want to use a broker to help them navigate the complex parts of health insurance. It would be an individual’s choice.

Anthony Benevento is vice president, sales and marketing for UPMC Health Plan. Reach him at beneventoa@upmc.edu or (412) 454-7826.