Oct 2010 Financial News

Health insurance exodus

Oct 13, 2010

COK Sodality Cooperative Credit Union Limited last month cut ties with Sagicor Life Jamaica and joined Guardian Life's Medecus health scheme instead, saying it was a cost saving measure.

To date, 33 of 44 credit unions under the Jamaica Cooperative Credit Union League (JCCUL) umbrella, have made that switch according to Raymond Walker, chief executive officer of Caribbean Assurance Brokers Limited, whose company brokers group health insurance coverage for the small financing agencies through Sagicor.

COK Sodality, which offers its members insurance coverage, made the switch between the rival insurer providers on September 1, said member care manager Audia Hoo, after Sagicor proposed an increase in fees while benefits would have remained "static".

Hoo said more than 700 users of the Medecus health insurance product at COK Sodality will benefit from monthly savings of up to J$4,885 each by using Medecus instead of Sagicor.

The 700 COK users represents just a fraction, 0.33 per cent, of its 213,000 membership base.

Sagicor's spokeswoman Ingrid Card down-played the shift, saying the credit unions tend to act as a group, and so "the attrition must be viewed from that perspective".

JCCUL said the members who have remained with Sagicor do so out of loyalty.

Still, Eric Hosin, president of Guardian Life Limited, said the new business trending his way does not add much to existing volumes, despite the hundreds of thousands that make up the credit unions' membership base.

Hosin said they tend to be employed to companies that already provide health insurance.

Guardian Life still sees potential in developing the market, and continues to push for new members to sign up.

"We are hoping through our broker to get more persons to come on board," Hosin said.

Full range of services

Caribbean Assurance, a five-year-old, multi-line insurance brokerage selling the full range of insurance services and products - from a 'pin to an anchor' - according to Walker, offers service to the credit union movement through JCCUL.

Under the arrangement, individual credit unions determine whether to offer coverage through Medecus, Sagicor, or both, Walker said.

The gradual shift to Guardian Life's Medecus product has been ongoing since 2007 following two significant increases in benefits, first by Blue Cross of Jamaica and then by Sagicor which acquired Blue Cross' portfolio in December 2008.

"We started selling for all health providers, but when Blue Cross was acquired by Sagicor, we took the full block of credit union business that was formerly with Sagicor to Guardian Life," said Walker.

"It has grown from this point.''

Patrick Dorman, senior product administrator with Caribbean Assurance says that of the 37 credit unions now served by his brokerage, only four on-sell Sagicor health to their members — St Elizabeth cooperative, the police cooperative, the special constabulary force and the nurses' association.

The remaining 33 sell Medecus.

Both Sagicor and Guardian Life provide similar benefits for credit union members in some cases, including that of assistant surgeon's fee of 30 per cent of the cost of surgery and anaesthetist's fee of 40 per cent of cost of surgery. Both also cover 80 per cent of the cost for renal dialysis and 80 per cent for chemotherapy or radiotherapy.

But, according to a schedule of fees and benefits provided by COK Sodality that would have become effective September 2010, the major differences lie in the executive gold product — one of three offered by credit unions - with Medecus offering a lifetime maximum of J$5 million and Sagicor J$2 million to policy purchasers.

Under Medecus, for doctor's office visits and physical/wellness checks the payout is J$1,000 per visit while Sagicor offers J$700; and for specialist consultations, Medecus offers $2,000 per visit and Sagicor, J$1,500.

Additionally, for visits to the paediatrician, gynaecologist, chiropractor or podiatrist, Medecus covers J$2,000 per visit while Sagicor offers J$1,200.

Individual rates for Sagicor standard health package range from a member only fee of J$5,953 compared to J$7,172 from Sagicor. By making the switch to Medecus, said COK's Hoo: "The savings will be on a monthly basis and will vary from plan to plan. Most categories will benefit from increased coverage at a lower monthly premium."

The fees for a member and one dependent is J$11,905 monthly from Medecus compared to J$13,975 from Sagicor; and for member and multiple dependents it is J$16,669 compared to J$16,021 from Sagicor.

"Having reviewed the proposed increase in premiums for renewal and the static benefits available, other more affordable options were sought for the COK Sodality membership.

"Medecus health insurance provides more coverage for most of the different benefit categories at a lower monthly premium," said Hoo.

He said the switch to the new health scheme is automatic for all of COK's existing enrolees who will be converted to the Medecus Health Gold Series for Credit Unions.

In a notice sent to its membership, the credit union said that lower premiums will apply for similar coverage for most existing plan options as a result of the switch, but that coverage would vary for different benefit categories.

Walker said COK Sodality was the biggest cooperative member yet, to make the switch.


Source:
austanny@yahoo.com
Jamaica Gleaner
Wednesday October 13, 2010

http://jamaica-gleaner.com/gleaner/20101013/business/business1.html