Health insurance: Veterinarians wonder what to do now?

Veterinarians who are facing the inevitable loss of the health insurance they've relied on for years have several options—some plagued with an unsettling level of ambiguity—and a single certainty. "The one thing we do know; it won't be the way it used to be," says veterinary consultant Fritz Wood, CPA.

Approximately 17,500 veterinarians and their dependents currently hold medical policies through New York Life. Most have had this insurance for their entire careers—decades, in some cases—but New York Life is eliminating health coverage for professional associations as of Jan. 1, 2013.

This leaves many American Veterinary Medical Association (AVMA) Group Health Life Insurance Trust (GHLIT) members facing unwelcome change amidst the unknowns of a new healthcare system. For peope who are young and healthy, individual policies may be the answer. Others may need to turn to private and public health insurance exchanges—which have been promised but have not yet materialized.

Options

"It's not something we do every day—shop for health insurance," says John Volk, an analyst with Brakke Consulting. "I think people always feel a bit inadequate about it." Many may not even know where to begin.

For those who are overwhelmed by the prospect, Wood suggests finding an independent insurance agent. "Think of them like a personal shopper," he says. Insurance is regulated at the state level, so people who want to do the legwork themselves can also look to state insurance commissions' websites, many of which have a variety of resources.

Individual plans may be the best alternative for people who are young and healthy, even if the coverage isn't identical to what they currently have. "If it was me, I'd rather be ahead of the game—even now—getting in touch with an independent insurance agent," Wood says. "The important thing is, you can't afford to go any time without health insurance."

Veterinary practice owners have additional options. Jim Arensburg, an independent insurance agent with Benefit Brokers in Overland Park, Kan., says that if a veterinarian has some health issues and is at least part owner of his or her business, "they should do a group plan through the business. They're not going to get declined."

Arensburg says it takes at least two employees to qualify for a group plan and the policy may get more expensive depending on preexisting conditions, but individuals won't be declined coverage due to medical status.

Unfortunately, not everyone will qualify for an individual policy or have a group plan to join. Rhea Morgan, DVM, DACVIM, DACVO, who works as an independent contractor at Village Veterinary Medical Center in Farragut, Tenn., is at a frustrating standstill. "When you're in my age category—I'm 60—the vast majority of us can't do anything at this time. We're stuck," she says.

Preexisting health conditions (which are much more likely with increasing age) make it much harder to obtain individual coverage. Even if someone does qualify, he or she may face a waiting period of a year or more before the benefits kick in. "That's the problem with the individual policy," broker Arensburg says. "If you cough or sneeze, they're going to decline you."

If an individual or a group plan isn't possible, securing affordable medical coverage becomes much more uncertain. "Those are the two options," Arensburg says. "Those who don't own are left in limbo."

Most veterinarians caught in this gap are forced to wait until the proposed health insurance exchanges, introduced by the Patient Protection and Affordable Healthcare Act of 2010, become reality.

The exchanges

Right now, the public health exchanges intended to function as competitive insurance marketplaces aren't scheduled to be operational until Oct. 1. "We're entirely dependent on the new exchanges being ready to go in October, and if there's a problem with them being ready there's a fear there will be a gap in coverage," says Morgan, the independent veterinary contractor.

In addition to the uncertainty of the timing on the new exchanges, there's no way to know if rates will be affordable. "It's coming down to the wire," Morgan says. "Will the exchange in my state have a sophisticated website ready in October and will we be able to purchase policies by the end of the year? That's a big question mark."

Carin Smith, DVM, of Smith Veterinary Consulting in Peshastin, Wash., refuses to panic. "I am not freaking out," Smith says. "I will do what I advise others to do: keep up with the info on health insurance exchanges [and] what is happening in my state. For better or worse, there was no action taken on creating exchanges until after the presidential election, thus we don't yet have all the details. Once those are up and running I will look into what works for me and make a choice."

Arensburg is not as optimistic. "Our approach has been cautious because it's all speculation right now," he says of the exchanges. "Nobody really knows what's going to happen."

A GHLIT alternative

In the meantime, the AVMA GHLIT is making good on its promise to help members transition to new coverage by establishing a private health exchange with HealthPlan Services' (HPS) benefit platform. According to a February release, the GHLIT private insurance exchange will provide tools and support to help AVMA members shop, compare costs and benefits, and purchase a medical plan. "Our new Web-based insurance exchange marketplace will enable our members to .... review and compare medical insurance options, and is an innovative solution to the challenges created by recent events impacting GHLIT medical coverage," says James H. Brandt, DVM, GHLIT chair. The first phase of the GHLIT exchange is scheduled to roll out in early March and will focus on the needs of members age 65 and older. The second phase, to be live in late spring, will expand to cover the remaining membership.

Until the exchanges are operational and policies are available to consumers, the reforms are seen by some as both the illness and the cure of medical coverage. "It's kind of a Catch-22," Volk says. "The new healthcare law has precipitated New York Life pulling out of the group insurance business, but on the other hand, because of the healthcare law, there will be insurance available; everyone has to be covered."

In the end, the abrupt elimination of health coverage—a significant benefit to AVMA membership—has been a hard pill to swallow. "To me, the membership is something I've had my entire career," Morgan says. "These policies have become more important over the years, but it's just not going to be there anymore."

This story is the first in a dvm360 series on the state of health coverage for veterinarians. To reach content specialist Julie Scheidegger, e-mail her at jscheidegger@advanstar.com. Visit http://www.dvm360.com/community, @dvm360 on Twitter, or https://www.facebook.com/dvm360 to comment.