Insurance Update

Summer 2010 CSANews Issue 75  |  Posted date : Jul 20, 2010.Back to list

Let me first say that Medipac is fine!

But the 2009-2010 travel season appears to be a disaster for most other travel health insurers and their various plans. At a recent Travel Health Insurance Association (THIA) meeting in Florida, our senior staff and I spoke to most of the people involved in the travel health insurance business and they were very, very unhappy campers. The reinsurers were saying that this was one of the worst travel seasons that they have ever had, and that is quite a statement from this small, yet volatile, reinsurance market. They stated that they had never seen so many claims over $500,000 and that the claims over $200,000 were too numerous to count.

Most of the traditional insurers were in prayer mode, hoping beyond hope that a miracle would appear to save their loss ratios. The improved dollar helped a little, but most snowbird travel claims had already occurred. A dejected representative from one of the major insurers said, "we lost millions of dollars in the first quarter." And I know that the second quarter showed very little improvement.

There are lots of reasons for the losses but, in reality, they are very difficult to overcome. The continued "hollowing out" of plans and the cutting of benefits (to try and offer better rates) simply does not work in the long run. The attempt to underwrite only the most healthy of people does not work either. Unfortunately, very healthy people have lots of claims too! In some cases, the very healthy people only seem healthy because they do not go to doctors since they have no symptoms. In their naiveté, insurers think that they can solve this problem by charging a higher rate if you have not seen a doctor recently.

As an aside, I would encourage everyone to have an annual checkup with a doctor. The simple things to catch are high blood pressure, diabetes and high cholesterol. These three often show no symptoms but, if left untreated, they can cause serious damage that will shorten your life. Women, in particular, can have blood pressure problems as they get older and this should be routinely monitored. These health issues are usually very simple to fix and/or control and, in their early stages, they will not even affect your insurance rates, at least not with Medipac.

Another reason that some plans get in trouble is their misuse of emergency assistance calls. When a client calls in a medical emergency, they need medical attention - not a call-centre representative who may be able to find them a nurse and, on a good day, maybe a doctor. The first minutes and hours of a medical emergency, if handled properly, can save an insurer a lot of claim dollars. The real advantage, however, is for the client who calls! Fast and proper medical advice can often prevent an event from ever becoming an emergency. And proper treatment at the outset of a medical emergency can arrest a deteriorating medical situation very quickly.

You would also not believe the number of people who call us for some minor issue (our medical staff often thinks that it is not a minor issue) but are then reluctant to go to a hospital or doctor. We actually have to cajole some people into getting the proper care - that's part of our job, too.

Now we have to talk about the U.S. medical system, in particular. A client with proper insurance, walking into a U.S. emergency room, is a winning lottery ticket. The doctors and hospital administration know that they have won the lottery, but they do not know how much, yet. The first level of winnings is testing. How many tests can they do? Can they justify the really expensive ones? They know that they have to phone the insurance company and they hope to get a call centre! Why! Because call centres invariably know very little about the testing requirements and the interaction with various symptoms. With pressure, they may approve all sorts of unnecessary tests. Even better is when the doctor recommending the tests actually owns the testing machines - a very common occurrence and a huge conflict of interest. If they get a serious medical person on the emergency telephone line, they will have to justify both their actions and their medical reasoning.

Part two of the lottery is the need for surgery or intervention of some form. If you send a patient to a surgeon, he will operate; if sent to a neurologist, he will perform a brain scan; if sent to a cardiologist, the patient will often end up with a stent insert, and so on. That is how these people get paid! No operation - no money. Well, not quite; there are still those exorbitant consulting fees to pay. When my mother recently visited an emergency room in Florida, she was quickly fixed and the matter was over and totally resolved. The doctor came in a little later, as we were preparing to leave, and said that he had called several of his colleagues and they were coming over for a consultation to ensure that everything was fine. Fortunately, I was right there and I knew what was happening. The insurer saved about US$15,000 in stupid and unnecessary consulting fees and my mother was saved the embarrassment and discomfort of more "probing." This is very, very common practice and very unethical, in my opinion. We use our own doctors for those "extra" consulting opinions and they are on pure salary, with no reason or incentive to sway their thoughts. They are also very, very good at what they do.

I forgot to mention that they wanted to admit my mother for observation for a few days. The third part of the lottery ticket! I asked what they were going to observe and got the standard answer that it would be best, just to be safe, to leave her. Admission to a hospital can be a necessary and life-saving decision and it is usually very safe. But what they do not tell you is that a very large percentage of people admitted to hospital are discharged with a disease or illness that they did not have when they went in. Hospitals are dangerous places with virulent bugs hiding everywhere, and I have previously written about C.Diff and MRSA and the other superbugs. The real reason to admit my mother, of course, was to make more money... to scratch off that last winning number. To be fair to the U.S. medical system, the lawyers and courts have forced them to perform "unnecessary" tests and provide "over-treatment" care to avoid multimillion-dollar malpractice suits. What a waste of resources!

The above issues are far more sophisticated than we would ever expect. They require experts who are very knowledgeable about the workings of the U.S. health-care system; doctors and nurses and case managers who deal in, and with, these life events every day. These people are our staff at Medipac Assist and I hope that you never have to meet them but, if you do, you will be in the best hands that I know of anywhere in this business.

As a bottom line, insurers have had a very difficult year and appear to have sustained severe losses. This always leads to several plan "revisions" - higher rates, tighter and more restrictive policies and a claims-paying department that will be quite harsh. Medipac has escaped these problems for many reasons (some of which are implied above) and we have made only minor adjustments to our upcoming travel insurance program. If you are not insured with Medipac, you should definitely consider our Early Bird Program, which is available right now. If you wait this year, you may find some unpleasant surprises. If you are insured with us, then you already know what to do. Have a great summer!