Today's Wall Street Journal
October 22, 1999
Health Insurance on the Web Gives People More Options
Point-and-click shopping has come to health insurance, giving people who work outside the umbrella of large corporate health plans new options.
Already entrepreneurs, the self-employed and small business groups can get comparative benefit and premium data and even purchase policies online. HealthAxis.com, eHealthInsurance.com, InsWeb.com and Quicken InsureMarket.com are among the companies letting consumers take a more active role in choosing their health coverage, a process that has traditionally been mediated by agents.
Don't expect the ambience of a wild Web auction. Insurance companies are licensed -- and their rates are regulated -- by state insurance departments. While e-marketers can trim agents' fees, the basic premium structure remains in place.
"Many people who go to the Web expect they're going to get a better deal than in traditional channels," and those people are going to be disappointed, says Larry Leisure, a partner with Andersen Consulting in Palo Alto, Calif. "The prices they will get on the Web are no different than if they comparison-shopped with a good [independent] broker." Mr. Leisure predicts there will be deeper discounting in the future as Web health insurance becomes increasingly competitive.
The process isn't all-electronic just yet either. California and New York recently joined the minority of states that have passed laws sanctioning electronic signatures, or strings of digits replacing handwritten identification. Other states, including Texas, are weighing the issue. But most still don't recognize e-signatures, so most transactions will require your real one on paper.
And e-insurers haven't abandoned the practice of risk assessment. Past illnesses can still trigger demands for physician statements, physicals or tests.
Still, e-insurance has been a boon for people like Stanley Kysela and Shellie Francis. Mr. Kysela, 40 years old, of North Riverside, Ill., ran his family's Bohemian restaurant for 20 years until it was sold. Soon to be between jobs and weary of rising premiums, he went online and eventually found his way to HealthAxis.com. There, he bought a policy for himself, his wife and their two children, with a monthly premium of $447, an amount he felt he could live with while he looked for work as a computer specialist or engineer.
So far, the Kyselas have used the policy for dental work and found HealthAxis's personnel "really friendly and easy to work with," Mr. Kysela says. But, he adds, "you never know how insurance is until you use it" when a major illness is involved.
In Tyler, Texas, Ms. Francis bought insurance for her husband, a concrete contractor, and two stepchildren from HealthAxis. A novice with a lot of questions, she frequently dialed the company's seven-day-a-week telephone line. "No one was ever impatient with me," she says. "They guided me through it and called me back or e-mailed me."
The insurance companies that have ventured online are taking a variety of approaches, from quotes to referrals to actual sales. EHealthInsurance.com sells policies to consumers in 25 states and aims to go nationwide. It offers policies from Prudential, Blue Cross of California, Blue Shield of California, and PacifiCare, among others. Chief Executive Vip Patel promises the "best available price" that states allow. The carriers pay the company fees that range from 8% to 10% of the premium, but the service is free to consumers.
HealthAxis.com, a unit of Provident American Corp., now sells Provident policies in 20 states and the District of Columbia and Fortis policies in 42 states, and it will soon add Aetna in certain states. It says it aims to cut the normal agent commission in half, though its price breaks vary from state to state.
InsWeb.com doesn't sell insurance, but it matches buyers and sellers of individual and Medicare policies. Consumers fill out health forms, and the site offers quotes from multiple companies. The companies can then contact consumers by phone or e-mail. InsWeb is paid for the referrals, which are free to consumers, says Art Young, senior vice president.
With the momentum growing, traditional insurers like Blue Cross and Blue Shield and HMOs like PacifiCare are now selling online, too.
But consumers have to be wary. The ease of buying insurance online could lead them to let down their guard. Caveats that apply to any online transaction are even more appropriate for health coverage, regulators say. Check with your state insurance department to confirm that an insurance company is licensed in your state. Ask about any complaints or enforcement actions. Look for stable brands with a track record.
"It's very easy to set up a Web site that is phony or a scam," says a spokesman for California's insurance commissioner. "If a company is unlicensed, recourse for a consumer is much more limited."
You should also make sure your personal health information is conveyed in a password-protected environment. Inquire about how a site ensures privacy. Quality companies will be happy to discuss their policies.
And Dana Palmer, a Web expert with the Texas Department of Insurance, says that even though you have done all the paperwork online, you should be sure to get a paper copy of the policy and find out how to reach an agent on the telephone. |
