Large Employers Join To Create Mini-Med Benefits

Six large employers have pooled resources to offer a low-cost, limited-benefit health plan for workers who would otherwise be uninsured. The companies are IBM, Sears, General Electric, Avon Products, Federal-Mogul, and EMC, a computer storage company. They've started a company called HR Policy Association that is being administered by UnitedHealth Group.

"Because our health system is primarily employment-based, it makes sense for large employers to take collective action to try to come up with innovative, collaborative solutions to this pressing problem," J. Randall MacDonald, a senior vice president for human resources at IBM, tells the New York Times.

Enrollees will be provided a medical card that allows a discount for prescription drugs as well as medical and dental checkups for $6.99 a month. They will also have access to a 24-hour phone bank staffed by nurses.

Interestingly, the addition of the nurse phone bank raised the price of the limited-benefits plan from $4.41 to $6.99, an increase that was welcomed by the enrollees. Focus groups of potential enrollees "expressed skepticism that any card that costs less than $5 would be worth having," according to the Times.

The newspaper also reports that UnitedHealth is "offering the discount card and four levels of limited coverage in all 50 states at monthly premiums ranging from $59 to $149. In 15 states, UnitedHealth will also offer high-deductible policies that cover major medical costs, under the same group rules with no add-on charges for people with preconditions."

The business rationale behind limited-benefits health plans is just as basic as the coverage: Something is better than nothing.

On the other hand, limited-benefit plans — also called mini-med plans — are a natural magnet for the scorn of consumer advocates, many of whom have lambasted these sort of plans for leaving workers vulnerable to the multitude of medical catastrophes that could threaten us all.

Proponents counter that rising insurance costs are pushing most traditional plans even further beyond the reach of Americans on the bottom rung of the economic ladder.

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