Anthem Lumenos Health Plans - Indiana

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Anthem Lumenos Commentary

We offer some perspectives on the Anthem Lumenos health insurance plans for Indiana residents:

Superior Benefit Designs

With enhanced preventive care benefits, 100% network coverage and and an unlimited maximum , it's tough to beat Anthem Lumenos coverage.  For consumer-driven health insurance plans with high deductibles, these benefits are about as good as it gets.

Thumbs up for the Lumenos HSA

We especially like the Anthem Lumenos Health Savings Account (HSA) plan -- particularly Plan 1 with 100% network coverage.  In our view, this is what an HSA-compatible health insurance product should be.

Lumenos HIA and HIA Plus are decent products that provide the same great preventive care benefits and contain nice financial incentives for healthy behavior.  However, from our perspective, these plans seem a little "gimmicky."

With Lumenos HIA and HIA Plus, you're essentially paying Anthem extra money so they can set it aside for you -- though you may never use it, and you'll definitely lose it if you terminate the plan.  We prefer the straightforward nature of the Lumenos HSA, through which you can have full ownership of a tax-advantaged Health Savings Account.

On the other hand, many people DO purchase the Anthem HIA and HIA Plus plans.  We're not saying they've made lousy decisions, because the HIA and HIA Plus are quality products competing against plenty of terrible products.  However, we think the vast majority of consumers will achieve superior long-run financial results with the Lumenos HSA.

Mellon Trust HSA Administration

Since the start of HSAs in 2004, we've been unenthused about packaging high deductible plans and HSA administration.  Our philosophy has been that these are distinct products and you should choose the best of each.

Our philosophy hasn't changed, but we think it's reasonable to purchase the combined Anthem Lumenos health plan and Mellon Trust HSA.

Mellon Trust is a full service administrator with affordable fees.  Plus, you can manage both your Anthem Lumenos health plan and Mellon HSA through a single website and with a single customer service organization.  In addition, when you purchase an Anthem Lumenos policy, Anthem provides real assistance in establishing your Mellon Trust HSA.

Long-term Rate Stability

Health insurance rate increases are a fact of life.  However, because of Anthem's size, financial strength and risk pooling approach, we believe -- over the long run --  Anthem health insurance rate increases will tend to be more moderate than the rate increases required by most other health insurance companies.

Also, we're cautiously optimistic there'll be reduced rate increase trends for consumer-directed health insurance products.

Medical Underwriting

We view Anthem as an overall generous underwriter which strives, within their risk assessment guidelines, to offer health insurance to all applicants.

There are some areas where Anthem medical underwriting guidelines are rather stringent.  For example, a person undergoing counseling for depression is going to be declined when applying for most Anthem plans.

On the other hand, an otherwise healthy person taking hypertension medication is likely to get -- in comparison to other health insurers -- a superior underwriting outcome from Anthem.

Favorable Rates for Smokers

Persons with medical conditions will not qualify for "preferred" rates and, depending on the specific situation, Anthem may not agree to provide comprehensive prescription benefits.  Anthem's standard rate load for smokers is 20%, which is low compared to most other health insurers.

"Super Preferred" Rate Discount

If you provide favorable responses to the questions on Anthem's Healthy Lifestyles Questionnaire (included with Anthem Application forms), you may qualify for a 5% discount off Anthem's "Preferred One" rate that is typically quoted online.

No Condition-Specific Waivers

Unlike most other Indiana health insurers, Anthem will not place
condition-specific exclusion amendments in their policies.  These amendments, or "waivers,"  can -- for up to ten years -- exclude coverage for some pre-existing conditions.

These "waivers" are not always bad for the consumer, as they enable some people, who would not otherwise qualify, to obtain private health insurance.  However, we're pleased Anthem doesn't engage in this underwriting practice, which is not, in our view, part of a long-term health care solution for Indiana residents.

Accommodates Pre-existing Conditions

Anthem will credit, against the 12-month pre-existing condition exclusion waiting period, time a member was covered by a prior qualifying health insurance plan. In doing this, Anthem follows guidelines of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), though HIPAA does not mandate health insurers to follow this procedure in administering individual polices.

You won't get this accommodation from most of the health insurance companies doing business in Indiana.

The Application Process

Anthem's handling of applications is relatively prompt,.  This has something to do with Anthem making extensive use of phone interviews and medical-condition specific questionnaires.  This reduces the need for medical record review -- a primary cause of delay in processing health insurance applications.

Customer Service

With sufficient staffing and knowledgeable representatives, Anthem Customer Service is good.  Telephone hold times are generally short, and minor administrative problems are usually addressed quickly.

Summary

We have difficulty coming up with bad things to say about Anthem.  Because of their size, they're occasionally a little ponderous and bureaucratic, but no more so than other large insurance companies.

Anthem is, by far, Indiana's largest health insurer -- and getting bigger.  This wouldn't be occurring if Anthem weren't doing a lot of things right.  Anthem operates with a fundamental cost advantage, and they've designed superior products satisfying a wide range of health insurance preferences.

In our view, Anthem senior management believes they have an important societal obligation to Indiana residents, and it shows in the way they conduct business.