Island Health Insurance Climate Takes a Nose Dive
-Thousands of Rhode Island residents, businesses and over 130 insurance agents
received notices this week that JohnAlden/Fortis has decided to withdraw its
individual health and small group health products from the state of Rhode
Island. The letter from Steve Cain, Vice President of Product Management at John
Alden, addressed to certificate holders states the reason for leaving was
arrived at "after thorough consideration of all pertinent health care
delivery, financing, administrative and regulatory issues in the state".
Emily Harding of Newport, an independent insurance agent whose agency, Health Plan Specialists, specializes in quality health insurance alternatives, said,"This evidently has to do with a managed care regulation Rhode Island has that states that once a health plan has "1000 enrollees" that the plan, in order to be certified, needs to be "responsible for the quality of care of its doctors", The problem John Alden/ Fortis has with this is that it is as if Rhode Island is trying to force life insurance companies with no doctors of their own to act like an HMO and all of a sudden be responsible for doctors malpractice once they have a certain market share".
This is terribly unfortunate for Rhode Islanders who now have few if any reasonable choices left for health insurance. Conseco was another health insurance alternative that as also decided to leave Rhode Island. "It will just be a matter of time before there will be nothing left In Rhode Island except for Blue Cross and HMO's" Harding said " I've researched what is going on in other states and right now in Maine there are only three companies left and many businesses can't afford group health at all because their employees can't afford to contribute their share and the employer can't afford to take up the slack",
Currently the Rhode Island Blue Cross plan available to individuals called
"Direct Pay" or " Select Blue" provides a lifetime major
medical maximum of only $25,000 in benefits. The plans underwritten by the
private companies did include stop- loss protection and various levels and
generous lifetime maximums plus the ability to see any doctor anywhere in the
country with minimal additional out of pocket costs depending on the plan you
Currently the Rhode Island Blue Cross plan available to individuals called "Direct Pay" or " Select Blue" provides a lifetime major medical maximum of only $25,000 in benefits. The plans underwritten by the private companies did include stop- loss protection and various levels and generous lifetime maximums plus the ability to see any doctor anywhere in the country with minimal additional out of pocket costs depending on the plan you chose.
" An independent agent and fellow National Association of Health Underwriters' (NAHU) member I talked to in Maine yesterday said a $2250 deductible health plan for a person under age forty costs $365 a month in Maine." Harding predicts that Rhode Island might be headed down the path that Maine, New Hampshire and a few other states have taken. "This is what we can look forward to if something isn't done right away to fix this, either by reinterpreting this managed care law or by amending it. I certainly can't imagine any private insurance company being amenable to such restrictions ".
took New Hampshire three years before they finally rectified all their problems.
Before that time an average family plan cost $1100 per month. John Alden/ Fortis
actually helped New Hampshire rewrite their health insurance regulations and
their rates have in some cases already have or are expected to drop by 40% to
The agents appointed with John Alden/ Fortis were notified that new applications for coverage would not be accepted after March 29th. Certificate holders are being given until October 1 st or the 15th or December 1stI or the 15th to obtain other coverage. John Alden Life Insurance Company has been offering individual and group health insurance in Rhode Island since the 1970s. It wasn't until they began offering a PPO option leasing the Health Care Value Management PPO (preferred Provider Organization) used by many companies that Rhode Island decided that this managed care regulation would apply.
John Alden is owned by Fortis and John Alden /Fortis is the largest underwriter of individual and small group health insurance in the country and does business in 44 states. Fortis is a Fortune 25 company based in the Netherlands with over $450 billions of assets and one of the 50 largest companies in the world.