Social Entrepreneurship in the Health Insurance Industry
Social entrepreneurship implies taking independent actions with the intent of making a change in the thinking of a larger community. This is not a concept that we usually associate with the health insurance industry. Yet, behind the scenes, health insurance companies have taken bold reform actions in 2009--without waiting for a consensus or passage of law.
Until recently, the only insurance firms cited for social entrepreneurship were exceptionally creative brokerage firms and software developers. But in 2009, there were many cases of paradigm shifts at the core of some health insurance company operations.
Here are a few examples:
Aetna's has made a commitment to wellness benefits. These programs range from fitness and weight loss to maternity coaching and geriatric care. Even during the past year, when employers are shaving benefits to bare-bones coverage, Aetna continued to invest in its specialty benefits programs. All of these programs are voluntary to its members, but the feedback from those who elected these plans has been overwhelmingly positive.
Oxford Health Plans
Oxford Health Plans operates on the belief that health insurance decisions should be under the control of individuals, rather than their employers. Instead of directing its focus primarily to its 1,600 employer clients, they now see the millions of individuals living in their target market of New York and Connecticut as their primary customers.
These individuals have a wide range of backgrounds and languages. Oxford is perhaps the first insurance company to have a member Web site entirely in the Chinese language. While there is no proof that individuals make better health insurance decisions than their employers, companies like Oxford are committed to empowering individuals to gain control their own health insurance future.
Even while the Obama transition team considered a proposal to eliminate Health Savings Accounts, United Healthcare's individual insurance units boosted their efforts to show customers that the plans really do make sense for some consumers. Policy deductibles of all insurance companies have risen (namely employer-provided insurance) to the point that it is feasible that the majority of health insurance may soon have the high deductibles required to have the Health Savings Account program.
Guarantee Trust Life Insurance (GTL)
GTL was one of the first to widely market a health insurance plan that may well be a model for the future of the entire insurance industry. Its "Core Health Insurance" mini-med is issued to every applicant regardless of health history. It is a "defined benefit," rather than a "major medical insurance" policy.
The same coverage is available throughout most of the United States. There are no deductibles or co-payments. It focuses on providing coverage for the expenses that plan members are most likely to use. There is no provider network or pre-approval required. Coverage is equally valid with any medical provider anywhere in the US. Preexisting conditions are covered after a short waiting period.
The insurance rates are stable and the company remains financially solid because the claim payments are effectively locked in through the defined benefit design. In contrast, major medical insurance is sometimes referred to a "blank check coverage."
Marketing this coverage took some courage because of criticism of mini-med plans by prominent politicians. Yet, the company has demonstrated its commitment to the trade-off of catastrophic coverage in return for coverage that members actually use.
Horizon Blue Cross
When this New Jersey company decided to make the transition from a non-profit to a for-profit franchise, the company faced massive public and political opposition. Clearly, many held the opinion that "for profit" is bad and "non-profit" is good. To make matters even more delicate, this was New Jersey's last non-profit insurance company.
Horizon set up a separate Web site designed specifically to explain the reasons for its decision, and the benefits to its members and the state. Almost four years later, the company is still working through the transition. But as a result of this prolonged debate and discussion, more politicians and industry experts now realize that non-profit is not necessarily the way to improve our health insurance system.
It turns out that access to capital markets may be more valuable than access to government support. Likewise, accountability to public shareholders and investment regulators may prove to be more effective in driving efficiency than accountability to state insurance regulators.
This lesson, and the initiatives of these health insurers, may prove to be valuable in the coming months as plans continue to develop for health care reform.