Q. We notice that ValuMed plans offer a PPO. Many medical plans penalize an insured for not seeking treatment from a participating physician. Why doesn’t ValuMed?

A. ValuMed is a limited benefit medical plan. Reducing payable benefits for not using a PPO participating doctor has a two-fold effect on the unsuspecting insured. First, lowering benefits results in greater out-of-pocket expense; and as if that penalty isn't enough, the gap between billed (undiscounted) charges and insurance benefits widens even more.

Using a “non-directed” PPO network (one not requiring that the insured use the network in order to receive full insurance benefits) provides the insured with a choice of using a participating doctor and enjoying a lower balance bill if one is necessary, or going out-of-network and still receiving the same level of benefits but accepting that there may be a larger balance. ValuMed insureds are fully informed of this valuable benefit in their Summary Plan Description.

Q. How is the PPO access fee paid?

A. The cost of the PPO access is part of the premium. There are no “extra” charges. And the PPO feature is integrated into ValuMed. It is not an option. Because Core & More is a fixed-indemnity benefit plan, there is no PPO.

Q. Some limited benefit medical plans include prescription drug coverage as part of the Outpatient coverage. Why do the ValuBenefits plans separate this coverage?

A. The objective of insurance should be to provide the most coverage for the least cost. Any well-constructed insurance plan should try to “balance” the coverage while keeping costs in line. When the cost of prescription drugs is included in the Outpatient coverage, it is possible that a few trips to the drug store will erode, or even exhaust, the coverage for all other Outpatient benefits – doctor visits, diagnostic procedures, emergency room visits, etc. The ValuBenefits plans are designed to eliminate that danger by separating these coverages. 

Q. What happens at the drugstore?

A. With ValuBenefits, the out-of-pocket payment at the drugstore is reduced because the insured is presenting a prescription drug card with insurance benefits built into it. The insured pays the required co-payment and the drugstore accepts the pre-determined card payment.

For plans with the prescription drug benefit inside the Outpatient coverage, because there is no insurance built into the card, the insured must pay for the entire prescription and then submit a claim for reimbursement. In either case, the drug card acts as a discount card as well. 

Q. But is $35 or $50 per month enough?

A. There is no easy answer. For someone who has a chronic condition requiring a monthly prescription of a top-branded drug the answer is obvious. But, our goal is to design the plans for balance in coverage and to help cover unexpected costs. We are told that the average generic drug script costs around $25, while the average branded script is approximately $95. The ValuBenefits plans encourage the use of generic drugs while providing a balance between the need to reduce the out-of-pocket costs of drugs and keep coverage affordable.

And remember, each covered family member has a separate monthly maximum.

Q. Does my client have to subsidize part of the employee cost?

A. There are two answers, depending on which plan you’re going to present.

O         If you are presenting a Core & More plan, and if the weekly Employee Only premium is higher than $25, we do require the employer to pick up the amount in excess.  (This requirement can be waived with underwriting approval).

O         For all ValuMed plans (including Series II), there are no employer subsidization rules.  However, your role as the agent is key in determining whether or not subsidization will be critical to the offering’s success.

Q. When should ValuMed premiums be subsidized by the employer?

A. You know your client’s employee profile, so we leave that up to you.  Our advice, however, is that the overall program’s success will be compromised if the premium is too high for the employees to pay comfortably.  Affordability of benefits is key to enrollment success. Participation (and your commissions!) suffer if the right balance isn’t struck.

A rule of thumb we use: part-time, non-benefited employees are usually comfortable paying a weekly premium equal to or less than about twice their hourly pay.  So, if an employee is paid $8 an hour, a weekly premium of about $16 is usually considered affordable.

Therefore, you may want to consider presenting your client with a subsidization requirement on any premiums that exceed this guideline.  Again, it’s up to you.