Friday, April 22, 2011

Industry News: Life and Health edition

■ First up, some (good?) news from the Medical Information Bureau (MIB):

"U.S. life insurers researched more requests for individual coverage in March than they did in March 2010, and activity for older applicants continued to be strong."

That's interesting on several levels. First, it suggests that more folks are buying life insurance (although at least some of these are likely replacements for older policies). Second, it may also be a reflection on the decline of the economy: if folks had been counting on their investments to fund their estates, then life insurance can be an attractive means of making up for unexpected shortfalls.

■ Next, Aetna's making some interesting changes in how they'll handle individual medical insurance going forward:

"1. New 15-day lead time requirement"

When applying for a new policy, the earliest effective date one can claim is two weeks out. So if you're thinking about switching to an Aetna individual plan, don't wait 'til the last minute.

[ed: United Healthcare requires a month has changed their issue date policy to 15 days, as well]

"2. A requested effective date can no longer be changed to an earlier date"

On its face, this makes sense: backdating is problematic. But what they're really talking about is a case where, for example, you apply today (April 22nd) requesting a June 1 effective date (obviously observing the new 15-day rule). Your approval comes back on May 3rd, and you decide that you'd really rather have the new plan effective May 15th. Nope: no can do. This makes no sense, since the 15-day rule is still being met, and it's not a question of new claims in the interim.

And last (but definitely not least):

"3. 90-day limit for choosing a future effective date following an appeal"

This one's kind of (unnecessarily) complicated: what it applies to are cases where an applicant is turned down for coverage and appeals the declination. Under the new ObamaCare© rules, the applicant has 180 days to appeal the decision. But Aetna's added a twist: "the applicant must choose an effective date within 90 days of the original signature date on the application." Here's the example given:

"An applicant signs an application on 12/31/2010 and is declined for coverage on 1/15/2011. The applicant has 180 days from 1/15/11 to appeal his/her declination ... If Aetna overturns the declination decision and approves the coverage, the applicant may be enrolled for an effective date that is within 90 days of the signature date on the application."

They then give various dates from January through April. The problem is that one could end up paying for many months where there was no coverage in force. So one could win the battle, and ultimately lose the war.
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