Medical GAP Coverage

PLEASE MUTE YOUR PHONETHANK YOU!

Oberlin MarketingFort Wayne, IN(260) 486-9739

What is GAP and where did it come

from?

A product designed to help

bridge the “gaps” in traditional

insurance. A solution to rising healthcare costs.

Helps employers save premium

dollars and helps employees protect themselves against

financial strain created by

increased out of pocket costs.

Healthcare Costs are out of

control. Fifteen years ago, GAP

was not needed. In today’s

market, agents and their clients are being forced

to find alternatives.

Why Now?

The following slides give a great visual effect of the direction our group health market is headed. In order continue positive growth, agents and their clients must be willing to adapt to the changes.

This slide shows how in just over 10 years, the cost of healthcare has risen almost 175%, with a good portion of that increase coming in the last 5 years.

Benefit Features and Options

Inpatient Hospital Benefit- $500 - $10,000 annual maximum per insured

person.- The max for an insured’s family is 3x the above

coverage.* This coverage is for inpatient stays, inpatient surgery, in-hospital physician charges, and emergency room treatment if admitted to hospital.Outpatient Hospital Benefit- 40%-70% of the inpatient hospital benefit per

insured.- The family benefit is 3x this coverage as well.* This coverage is for services rendered in hospital emergency room, hospital outpatient facility, outpatient surgical facility, or MRI facility.Physician Office Visit- $10-$50 per visit per insured person; 1-3 visits per year.Ambulance Benefit (Accident Only)- $50-$350 per person. 3x the benefit per family.

How does this help you?- Retention – When renewal cases have increases,

GAP gives the agent another option to help renew the case.

- New Business – When an agent can bring a fresh idea to a prospect that they have never seen before, it differentiates that agent from the competition. If the agent can show the employer a savings and keep the out of pocket expenses down, the odds of winning that case are much higher.

- Commission – Agents and agencies will earn commissions when a GAP is sold. This is a way to earn additional money on top of the commission earned in the sale of the group case itself.

Presentation of how gap fits with the proposed medical plan (21 enrolled lives)

  Renewal Medical Plan Proposed Alternate Plan with Gap

Deductible $500 $4,000Coinsurance 100% 100%

Out-of-Pocket Max $1,500 $5,000     

Monthly Premium(based on census) $17,505.87 $9,404.00

Savings Created   $8,101.87     

RECOMMENDED GAP PLAN    

  Inpatient Hospital Max $5,000  Outpatient Hospital Max $3,500       Gap Monthly Premium $3,025.88

  TOTAL COST OF PROPOSED PLAN WITH GAP INCLUDED $12,429.88

  Net Savings $5,075.99 (29% savings)

Annual Commisions: Major Medical: $7,560 (based on $30 per head)

CMB Gap: $3,631 (48% extra commission)

Pros and Cons Against the Competition

- No deductible with our gap plan- Outpatient benefit can go all the way up to $7,000- Rates are extremely competitive.- Will pay benefits for deductibles, coinsurance AND

copayments covered by the health benefit plan.- Family limit is 3x the insured benefit. (Opposed to 2x)- Guaranteed Issue with no pre-ex.

Competitor Medical Bridge Crescent Medical BridgeCurrent Plan (37 Employees) $500 Deductible $500 Deductible

Coverage Amount

Hospital Confinement = $1,000Outpatient Surgery ONLY = $250 - $1,000(This will pay out as low as $250 or as high as $1,000 depending on the type of surgery).Emergency Room = $100Ambulance = $100Diagnostic Testing = can be added but significantly increases the rate. The benefit pays only $100-$200 depending on the test).Dr. Office Visit = $25 one time

Inpatient Hospital Benefit = $1,000Outpatient Benefit = $700 (covers surgery, emergency room visits, andradiological diagnostic testing. Will pay up to benefit max ($700) towards any deductible, copayment, or coinsurance amount covered by the Insured Person's Health Plan.)Ambulance = $100Diagnostic Testing = Covered under Outpatient Benefit. This is very important as the average MRI costs over $1,000).Dr. Office Visit = $25 twice a year

Underwriting

_Birth in first nine months NOT covered._Pre-existing conditions period of 12 months after the effective date of coverage._Coverage not provided for employees over the age of 64.

_No employee maternity exclusions_No Pre-existing condition exclusions_No age limit for employees_Policy is Guaranteed Issue

Plan Type Indemnity - Pays a lump sum benefit,regardless of claim amount.

Supplemental Medical Expense Plan(Traditional Gap) - Follows the Insured's Health Benefit Plan and only pays the applicable deductible, coinsurance, or copayment charge up to the benefit max.

Rates $2,227 $1,620

Money Saver HRA Crescent Medical Bridge Gap

What makes them different?

First Dollar Coverage

Employees must satisfy a $1,500 deductible before any money is paid out. Will not cover

the per occurrence copays associated with hospital stays, outpatient surgeries, and

outpatient diagnostics.

No deductible. Gap will pay First Dollar for eligible expenses. This includes

deductibles, copays, and coinsurance. This will also cover the $500 per occurrence for Hospital stays and the $250 per occurrence for

outpatient surgery, as well as the $300 copay for outpatient major diagnostics.

Coinsurance Plan usually has coinsurance built in whichcan increase the total out-of-pocket. No coinsurance. Gap pays first dollar.

Aggregate Coverage MaxPlan has a max coverage of $8,500 for

Inpatient and Outpatient expenses combined.

Inpatient = $10,000Outpatient = $7,000

Monthly Rate based on census $5,791.27 $4,390.12

$1,401.15 savings

This group switched to a $10,000 deductible plan with copays and per occurrence deductibles . They implemented a very common HRA plan that will pay a max of $8,500. The employees have to satisfy a $1,500 deductible before any benefit is paid out. The below chart shows why switching to a Crescent Medical Bridge Gap Plan may be a better option.

Money Saver HRA Crescent Medical Bridge Gap

MRI = $1,400Plan has $300 Copay

MRI = $1,400Plan has $300 Copay

Employee pays $300 Gap pays $300 copay

Outpatient Surgery = $6,000Plan has $250 per occurrence

deductible. MoneySaver has $1,500 deductible

Outpatient Surgery = $6,000Plan has $250 per occurrence

deductible.

Employee pays $250 per occurrence deductible Gap pays $250 per occurrence deductibleEmployee pays $1,500 Money Saver deductible Gap pays $6,000 for cost of surgery

Total Cost for Employee = $2,050 Total Cost for Employee = $0

Claim example using a typical shoulder injury followed by an MRI and

surgery.

Quoting Procedure

- Name and brief description of group.

- Census with name, birthdate, and coverage level.

- Copy of current and renewal plan including rates.

- List of several alternate plans with higher deductibles and lower premiums.

- We also need to know what state the business is headquartered in.

Gena Gilleo – (800) 486-9739

For more information:

Sources:

- Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005-2001

- Sally Pipes, President of the Pacific Research Institute. “Forbes Magazine” 10-10-2011