Copyright 2005 Knight Ridder/Tribune Business NewsCopyright 2005 The Indianapolis Star (Indiana) The Indianapolis Star (Indiana) December 25, 2005, Sunday
IN-HEALTH-INSURANCE-20051225
1734 words
Insurance plan targets 'invincibles'
By Daniel Lee
Matt Reiswerg is young, active and healthy. He hasn't spent a night in the hospital since he was born.
The 25-year-old former college and professional soccer goalkeeper works out regularly at a fitness club near his home in Indianapolis to stay in shape. He also is busy searching for a job in the sports industry.
One thing that Reiswerg has not done, though, is buy health insurance to replace his policy, which expired earlier this year. That puts him among the estimated 45 million Americans without health benefits. Reiswerg, who recently has worked as a youth soccer coach, said his decision largely has been a financial one.
"It seems like I have a million things that I'm spending money on," he said, adding that he plans to find coverage soon.
WellPoint Inc., the nation's largest health benefits company, is targeting people like Reiswerg. If you're young and fairly healthy, WellPoint wants you. The Indianapolis company next year will roll out a product line, called Tonik, which targets what WellPoint has called "young invincibles" -- those age 19 through their early 30s who are likely to go without health insurance. Some are students no longer covered by their parents' plans. Others are without jobs or working in positions that don't provide benefits.
Such individual plans are part of a new line of insurance products sprouting up as fewer Americans are getting health insurance from their employees because of the rising costs of health care.
WellPoint's hunt for youthful members is attracting praise and criticism.
Some supporters say it's an attempt to reduce the number of uninsured. "There are a number of folks who choose to be uninsured. I think it reaches that demographic," said Jim Atterholt, commissioner of the Indiana Department of Insurance. "Nobody was going after this segment until these products came out."
The insurance chief in Tonik's home state of California, however, sees little more than WellPoint trying to pad its profits.
"It's a slicing and dicing of the marketplace to identify those individuals who are willing to buy a policy and are not likely to need it," California Insurance Commissioner John Garamendi said. "It's called cherry-picking."
Garamendi said the PPO products within WellPoint's Blue Cross of California, which includes Tonik, have a profit margin of roughly 25 percent. At the same time, he said, people who need more comprehensive coverage are finding it harder to get as many employers cut or reduce benefits because of higher costs.
"It's a process that will ultimately lead to a further decline in the entire health systems," Garamendi said.
WellPoint, however, defends Tonik as an effort to reduce the number of the uninsured. About 70 percent of those signing up for Tonik previously were without coverage, said Steve Synott, general manager of individual services for WellPoint's West Region.
One expert downplayed those claims. People seeking individual policies usually do so only because they can't get better coverage through an employer, said Gary Claxton, vice president of the Kaiser Family Foundation's Health Care Marketplace Project.
"Most people view non-group insurance as kind of a last refuge," he said. "It's not surprising that they might be currently uninsured."
Claxton said Tonik is a basic individual policy -- with its relatively low monthly premiums and high out-of-pocket costs -- that's been spiffed up with savvy marketing. For example, Indianapolis-based Golden Rule Insurance Co., part of UnitedHealth Group, said it offers similar individual plans through its Saver Plans launched this year for individuals and families in need of coverage.
Tonik, though, targets a very specific demographic.
"You're young. You're healthy. But, hey, life is unpredictable," Tonik promotional literature reads. "All it takes is one slip, one fall, one biff, and the financial pain can outweigh the physical."
Pictures of snowboarders and mountain bikers adorn Tonik's promotional materials. WellPoint touts Tonik at surfing contests and ski festivals. It advertises on Web sites including climbing.com and skateboarding.com.
Tonik's brochure, for example, hits readers with selected prices for health care if they don't have insurance: $ 7,175 for an average day in the hospital, or $ 48,302 for knee surgery and care.
The message is clear: Going without health coverage can bring financial ruin.
WellPoint launched Tonik last year in California and recently offered the product in Colorado. The company plans to offer Tonik or similar products across the country and expects the product to be available in Indiana by the end of 2006.
In many ways, it's an effort to make health insurance seem, well, hip.
People can pick from three Tonik plans: "Thrill Seeker" (the cheapest), "Part-Time Daredevil" (midpriced) and "Calculated Risk Taker" (the most expensive).
To design Tonik, WellPoint hired an outside researcher to interview young adults on their views about health insurance, specifically asking them why they might choose to go without coverage and what sorts of services are most important.
For instance, Synott said, the company learned that many of its target customers put a high priority on regular care for their teeth and eyes, even if they rarely went in for a medical checkup. As a result, Tonik includes limited dental and vision benefits.
They also wanted insurance that would be inexpensive and easy to sign up for, he added.
Most everything about Tonik can be handled online. WellPoint says about 60 percent of those who apply -- people who are generally healthy-- are approved quickly over the Internet and can print out an ID card.
Premiums for Tonik's three plans typically range from $ 64 to $ 123 a month depending on a person's age, location and medical history. The deductible, or out-of-pocket cost before coverage kicks in, can range from $ 1,500 to $ 5,000.
Tonik does not include maternity benefits, an exclusion the company said was needed to keep the plans affordable. If a Tonik member were to become pregnant, she would be able to transfer to another, likely much more expensive, plan that provides maternity benefits, company spokeswoman Leslie Porras said.
Garamendi, California's insurance commissioner, blasted WellPoint for marketing a policy that does not include maternity benefits to women in prime childbearing years. Women who can't pay, he said, likely would have their bills paid for by taxpayers.
Other medical needs that young adults commonly seek treatment for include addictions to alcohol or drugs and mental disorders such as depression, said Dan Hodgkins, executive director of health promotion for Community Health Network of Indianapolis.
WellPoint said Tonik's coverage does include caring for mental health and addiction disorders.
Lisa Ristvedt, 31, San Francisco, said Tonik is a great fit for her while she's between jobs. She said she considered extending the benefits from the telecommunications job she left in April through COBRA, a program that continues health coverage for former employees. But doing that, Ristvedt said, would have cost her about $ 250 a month. Instead, she opted for Tonik, which costs her $ 106 a month.
"I was actually without insurance for a couple months until I spoke with my mother, and she said you cannot be without insurance in San Francisco or anywhere else, for that matter," Ristvedt said. "I was so stressed out trying to get a job, I wasn't worrying about health insurance."
Reiswerg, the uninsured former soccer player, said he feels much the same way. The Indiana University graduate hopes to land a job with benefits soon. Otherwise, he said, he wants cheap, but not "super cheap," coverage to meet his medical needs.
"I do plan on covering myself soon," Reiswerg said. "For someone like me, who's not being provided health insurance by someone else, it's not terribly consumer-friendly. I have to go out and seek the best deal."
ABOUT TONIK:
--What it is: Tonik is an individual health policy designed for young adults, primarily for those ages 19 through their early 30s. It is provided by Indianapolis-based health insurer WellPoint Inc.
--When it was rolled out: The plan was launched last year in California and is now available in Colorado. Tonik, or similar products, will be offered across the country in the coming months.
--When it will be in Indiana: By the end of 2006.
--What it costs: Tonik users can pick from three separate plans: "Thrill Seeker," "Part-Time Daredevil" and "Calculated Risk Taker." Monthly premiums range from about $ 64 to $ 123, depending on a person's age, location and medical history. The deductible -- or out-of-pocket costs -- run from $ 1,500 to $ 5,000, depending on the plan. Doctor visits cost $ 20 to $ 40.
--Other features: Tonik plans include limited dental and vision benefits.
--Who buys it: WellPoint said about 70 percent of those enrolling in Tonik were uninsured. Most are in their 20s or 30s, and slightly more than half are male. For more information: tonikhealth.com
OTHER PLANS:
--Other options are available, including those from the Golden Rule Insurance Co. of Indianapolis, which this year unveiled its Saver series of health plans designed for "individuals and families struggling to find affordable health insurance." More information is available at goldenrule.com.
--WellPoint, through its Anthem subsidiary, also offers other individual plans already available in Indiana. One example is its Blue Access Economy. For more information, visit Anthem.com. Many other options are available.
ABOUT THE UNINSURED:
--Roughly 45 million Americans, or almost 16 percent of the population, did not have health insurance in 2003.
--People 18 to 24 years old are the least likely of any age group to have health coverage, with 30 percent uninsured in 2003.
Source: National Coalition on Health Care
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December 28, 2005
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