Monday, September 14, 2009

GradMed Insurance Review

This morning I was looking at reports that in nine states of our fine Union, a history of domestic violence is considered a pre-existing condition and is therefore a reason to be denied coverage. Not worth commenting on: you get it. We live in a Franz Kafka story. "I've been beaten, may I see a doctor?" "No, you cannot see a doctor, because you have been beaten. We only allow those who have not been beaten to see doctors."

The subtler, more widely exploitative insurance industry practice that I really want to talk about is an insurance company called GradMed. Students that are right out of college are some of the people most likely to be uninsured -- there's often a long unemployment period after graduation, people are generally healthy, and there's not a lot of money to go around. It would seem like this is a perfect time for insurance corporations to step in and provide...well, about the worst decision a young person can make.

GradMed is marketed through the alumni associations of various colleges (this is the part of a college that, once you graduate, sends you all kinds of mail asking for donations). They pay colleges for the right to use the school's insignia and to market directly to their students -- and I made sure to call participating colleges to make sure that this is the system. Let me be specific: the 'sponsorship' that colleges engage in is an exchange of student trust and marketing opportunities for cash royalties. No school oversees, manages, or contributes to the insurance fund in any way.

But whatever -- schools raise money all the time. Schools need all the cash they can get -- marketing to their graduates is one of the many ways they raise it. Right? Not when the policy is the most exploitative insurance contract I have ever seen. Once you select your college at their website (pick any: the policies are all basically the same) they outline a short-term (30-180 days), medium-deductible policy that pays 100% of some claims above $5,000 dollars. Here, though, is the kicker, copied straight from the site:
If you need GradMed beyond the end of your first coverage period, depending on your state of residence, you may apply for additional periods of coverage.

Any condition which may have occurred under the first policy will be treated as a pre-existing condition under your next policy. A pre-existing condition is a condition for which an insured was treated or received medical advice during the 12-month period immediately preceding the effective date.
So if you have any condition which in any way lasts longer than your coverage period, you're dumped. And you're absolutely fucked because now you can't get real insurance because you have a pre-existing condition. And we are expected to pay for this -- the quote I got for a fictitious 21-year old St. Louisan was over $100/month. Even the testimonial on the website is a freaking train wreck -- as upbeat as she may sound, the student is still negotiating for her costs to be covered, and still has mobility problems from her accident that doubtlessly need physical therapy.

What happens to a person duped into a short-term, non-renewing insurance policy? This article from Time is a pretty good example -- a man signs up for several policies in a row with Assurant, and is never uninsured, but as soon as he was diagnosed with kidney disease, it is labeled as a pre-existing condition and he is denied coverage. The whole article is summed up by Karen Pollitz, project director of Georgetown University's Health Policy Institute and a leading expert on the individual-insurance market. "These short-term policies are a joke," she says. "Nobody should ever buy them. It is false security that is being sold. It's junk."

People talk about government waste, inefficiencies in Medicare, how slow the Post Office is, etc. -- but there is no comparison between those programs and the crimes of large, powerful corporations who put their full efforts into screwing people out of their paychecks. Part of me wants to call a series of alumni associations and complain -- but this is a completely legal product and they're not the real culprit for allowing it to be marketed -- the real culprit is the sociopaths in the board room who dream up this stuff in the first place, and the foot soldiers who hawk it to schools and young people who don't know better. At the heart of things, the real culprit is the system, which puts our health in the hands of the greedy.

To sum up, AVOID GRADMED LIKE THE PLAGUE. VIRTUALLY NO ONE SHOULD EVER BUY IT.

Edit: After I published this review, I had several entertaining and eye-opening run-ins with the people at Gradmed, which I describe in this entry and then in this one. Although they do nothing to protect your health or insure you in the event of illness or injury, they are very serious about marketing.

21 comments:

  1. This comment has been removed by a blog administrator.

    ReplyDelete
  2. I just removed the previous comment by GradMed customer service -- feel free to resubmit it without any advertising or contact phone numbers. I'm open to debate, but I'm not in the business of publicizing your service, because I think it's grotty.

    ReplyDelete
  3. I'll repost minus phone numbers.

    Hi, Nick. I work in customer service for GradMed. I can definitely understand your frustration over pre-existing exclusions. To say that insurance is confusing is an understatement. GradMed isn't renewable major medical coverage like you would get through an employer. It's not intended as permanent coverage. The reason it's marketed to new college graduates is because there is a gap in coverage that would likely occur between coming off of the student health plan and the beginning of an employer plan. By excluding pre-existing conditions, the insurer is able to keep the cost down. If someone knows that they will need more permanent coverage, many alumni associations sponsor a renewable major medical program through us as well. Our customer service reps are trained to discuss all of the options when they receive calls. There are times that we recommend going with a plan not through our company at all.

    ReplyDelete
  4. Thanks for coming back. I have some questions:

    1) What are the circumstances in which you would recommend that a young person /not/ enroll in GradMed? I don't see them on your website.

    2) What's your income-to-benefits ratio? I.e., how much do you pay out in health care for every dollar that you take in?

    3) In which states is your insurance policy illegal? Why is it illegal in these states?

    4) Am I right in my understanding that GradMed is a product offered by USI Insurance Services, your employer, which then contracts with actual health insurance companies, who provide insurance? Is this the reason that the woman in your testimonial still hasn't had her airlift expenses paid -- that you're in negotiations with the real insurer (not you -- you're a reseller) to try to get coverage?

    5) How much do you pay alumni associations in royalties per policy?

    ReplyDelete
  5. Thanks man. The ads at my school made it seem like this was what the school recommended, and I didn't know they got paid.

    ReplyDelete
  6. Nick,

    Like many companies, we do search the web for comments about our brands – because if a customer is having a problem, we want to try and fix it. You are correct. Many here have viewed your post. Why? Because after 20 years of selling this product, yours is the first complaint we came across online. Since your complaints are more about this particular type of health insurance rather than anything our company has done, we did have a few people view it to determine how best to answer your questions - rather than engage in a healthcare reform debate.

    To answer your questions:

    1)For example, if someone has a persistent pre-existing condition, we might recommend other options. Giving specific examples is problematic because someone might read this as advice, and without hearing all of their particulars, we do not want to steer them wrong. Our customer service reps are licensed agents and are not commissioned. Each situation is unique and they are trained to help the customer figure out what fits their needs best.

    2)As you astutely noted, we are not an insurer and therefore do not have this information. However, I can tell you that what you are referring to are loss ratios. Insurance is regulated at the state level. Many states dictate to insurers what this ratio needs to be.

    3)There are four states that our insurers choose not to do business in. Massachusetts is the only state (at the time of this post) that requires all health insurance be guaranteed renewable – which our product is not.

    4)We are an agent – just like who you likely buy your car insurance through. We are compensated in the same manner for providing customer service, marketing and billing and collecting premium payments. As I mentioned with loss ratios, many states mandate how much of each premium dollar can go towards paying agents, marketing, etc. This compensation in no way affects the payment of claims – which again, is highly regulated at the state level.

    5)Our compensation to associations is protected by contract. I am unable to share that information with you.

    I wish you well in your efforts to find full-time employment and health coverage.

    ReplyDelete
  7. Just a quick rundown, for those of your employees who use email links to come directly to this page and don't read the rest of the blog:

    Preface: I am not your customer. What you are doing now is not customer service, it's marketing. The fact that your customer service division is actually spending their time doing marketing is a huge red flag.

    1)I am under the impression that the only reasonable time to take out a GradMed policy is as a bridge between the end of school and the beginning of a job that you already have -- in order to prevent an HIPAA-ineligible gap in coverage. You, however, seem to market the program to all recent graduates, including the unemployed: this is bad faith, because you will drop them cold at the end of their coverage period, and if they're sick, they won't be able to get other insurance.

    2) This is information that is required by customers to allow them to make informed decisions. Practically the only good thing about a broker is that they can research and provide information about the companies whose policies they sell. I know you don't consider it your responsibility, and legally, it's not: it is your ETHICAL responsibility to your customers to know and to share information about the insurers whose policies you sell.

    3) "Choose"? Please. "Are forbidden to do business in by state law." By my count, New York, Connecticut, Hawaii, Massachusetts, New Jersey, and Vermont make six states that don't allow policies of the type that you sell.

    4) Allow me to ask again. Why didn't the woman in your online testimonial get her helicopter evacuation covered? What do you actually do, other than write ad copy for alumni associations to put on their websites, and hang out here?

    5) I'll translate this for you. "Because information about our royalty program would heavily discourage people from signing up with GradMed, and decrease trust in university alumni associations, we have created and signed a contract with them agreeing that none of us will ever talk about it."

    Thanks for all the well wishes! Stay classy, you crazy kids!

    ReplyDelete
  8. Little Pencil WritingJune 3, 2010 at 11:44 AM

    Nick,
    Thanks for bringing GradMed's fine print to light. The fact that it pays royalties and may punish those who seek treatment while being insured by later labeling it as pre-existing doesn't sit well with my family. We chose another company as a result of your blog.

    ReplyDelete
  9. Thanks for this post. My son's university has sent the GradMed flyers several times since he graduated in December 2009. I called them to find out more since he needs short-term coverage and wasn't impressed. This blog post confirms my impression about this company.

    KarenM in NC

    ReplyDelete
  10. what's up with this new policy of dropping people for 64 days who have had GradMed for more than 2 years? smells fishy and me thinks GradMed is in violation of the new health insurance law. Need to do more research on the subject.

    ReplyDelete
  11. Nick,
    Thank you for your blog.
    My daughter is one of those targets, oops, people who Gradmed is aimed at; just graduated, no job, no insurance.
    She had a bike accident this summer, slightly injured her leg and ran up $4000 worth of ER and other charges, so we've been looking for coverage for her.
    She got a Gradmed flyer from her college, and asked me to look into it.
    When I read their web site, and realized that they only sell short term policies, I thought "Why would anyone want that?"
    When I read the part that says "If you get sick while you have our policy, we'll call that a pre-existing condition and you won't be able to renew" I thought "I must have read that wrong. Nobody should buy that."
    So I did a Google search and found you, and of course you confirmed my suspicions.
    Buying individual health insurance in the United States is like waltzing in a mine field. There's really no reason, except greed, that it should be so difficult.
    You are performing a humanitarian service by exposing these jerks.
    Thank you.

    ReplyDelete
  12. Nick,
    Sorry to double-post, but here's a thought:

    The customer service guy said

    "The reason it's marketed to new college graduates is because there is a gap in coverage that would likely occur between coming off of the student health plan and the beginning of an employer plan."

    Ah, come on. If that were true, they could make it permanent and let the consumer re-up periodically and cancel when they become employed.

    The reason it's marketed to healthy young people in short, nonrenewable chunks is that they're betting that in any given 30/60/90 day period, almost none of the kids will get sick, and Gradmed will get to keep all of the premium.

    Considering the risk they're taking, Gradmed ought to cost about 25 bucks.

    ReplyDelete
  13. I live in Connecticut, I have a pre exsisting illnes, I have lost my job and I could not afford the COBRA cost and I needed something short time and this policy is just that. Health Insurance for the middle aged is impossible..It would make zero since for a healthy young person to buy this policy but for folks like me, it works. It is insurance meaning I am insured if a major medical occurs during my unemployment...nothing more. I am very grateful to have

    ReplyDelete
  14. Hi, Anonymous in Connecticut!

    I'm so sorry about your unemployment and your situation. We all get along the best way we can, and you're absolutely right that insurance for the middle-aged unemployed is terribly difficult.

    I do still think Gradmed might not be the best option -- especially if you don't know how long you're going to be unemployed. If you get sick, they only have to take care of you for the length of your current policy (usually 90 days, shorter than the duration of a lot of major medical problems) -- after that, they'll drop you. You will also be better off buying insurance directly from an insurance company -- Gradmed isn't an insurer, they're a broker, and they take a cut (that might be a significant amount of money -- they won't say how much).

    When your next Gradmed plan term is up, try using the free resources at http://www.healthcare.gov/using-insurance/low-cost-care/index.html -- they might be able to help you find a better, cheaper plan, or a way to get some free care. You might even qualify for Medicaid.

    Best of luck to you --

    ReplyDelete
  15. Nick,

    Just wanted to let you know that your blog post is still doing a good job of helping people avoid being deceived by their alumni associations. I was a click away from paying for GradMed before I Googled it. This post is the second result.

    Thanks.

    ReplyDelete
    Replies
    1. Hey Niran!

      This is so good to know -- I check in every so often, and your comment is really encouraging.

      Good luck finding insurance that's right for you!

      Delete
  16. I came across this as at the end of this month I will be off my schools insurance which has prob been the best insurance I ever had! I was considering this becaus I have until the end of the month but now I am hesitant especially because I have monthly prescriptions

    ReplyDelete
  17. damn..thank you for bringing this to light for me.. i just wish i had researched earlier but i was in a huge rush since my school's insurance coverage for me ran out on Aug 31 2013, and i just fell for this bullshit in a hurry to have something start the next day.. my fault for leaving it till last minute and being unaware of my policy's end date, but the United States private health care system is confusing as fuck, excuse my language, yes i am pissed as I am an international student and navigating this shit is very unreasonable. is your private health care industry a money making scandal or what? can you believe Stanford's very own Vaden health care clinic (which has been greatly helpful otherwise) insurance office actually recommended this shit to me! can't believe it. i just trusted them point blank.
    what is the best i can do now to resolve this? i think i have the 6 month policy and am job searching right now and legally have about 6 months left to stay in the US on my F-1 visa/OPT unemployment days if I don't find a job. but if I do.. and say something might happen to me in those 6 months.. will it be almost impossible to find a employer whose health insurance will cover me because i will then have a "preexisting condition"? Even though I am a perfectly fit and healthy recent graduate, only 22 yrs old and suspect i shouldn't be paying nearly so much for such freaking misleading insurance provision? (sorry for such a long, upset post but thank you for educating me).

    ReplyDelete
    Replies
    1. Hi, anonymous! I'm sorry I haven't gotten back to you -- my job's taken me away from keeping up with the blog, so I only check in every so often. You may want to look into COBRA, Cal-COBRA and HIPAA which continue insurance for people in California who have lost their previous insurance. I'm not an expert, but you have 60 days from the end of your previous plan to elect into them if you're eligible (and not everybody is) -- so you'd still have something like 22 days to get it done (if you get this). It can be expensive. An alternative, more short-term option might be whatever kinds of traveler's insurance you can get from your home country; some nations with universal health care regulate these systems in a way that make them quite reasonable. You also might want to go back into Vaden and politely decline the offer of GradMed, and see what they recommend after it -- I don't know of many other services that pay schools to promote themselves, so you might get something workable as the "second option".

      I hope this helped. I'm sorry that the system is such a massive fucking clusterfucking fuckshow.

      Delete
  18. wow..thank you for bringing this to light for me.. i just wish i had researched earlier but i was in a huge rush since my school's insurance coverage for me ran out on Aug 31 2013, and i just fell for this GradMed nonsense in a hurry to have something start the next day.. my fault for leaving it till last minute and being unaware of my policy's end date, but the United States private health care system is confusing as !!!!, excuse my language, yes i am pissed as I am an international student and navigating this shit is very unreasonable. is your private health care industry a money making scandal or what? can you believe Stanford's very own Vaden health care clinic (which has been greatly helpful otherwise) insurance office actually recommended this shit to me! can't believe it. i just trusted them point blank cause of the Stanford Alumni Associations link up with them.
    what is the best i can do now to resolve this mess? i think i have the 6 month policy and am job searching right now and legally have about 6 months left to stay in the US on my F-1 visa/OPT unemployment days if I don't find a job. but if I do.. and say something might happen to me in those 6 months.. will it be almost impossible to find a employer whose health insurance will cover me because i will then have a "preexisting condition"? Even though I am a perfectly fit and healthy recent graduate, only 22 yrs old and suspect i shouldn't be paying nearly so much for such misleading insurance provision? (sorry for such a long, upset post but thank you for educating me).

    ReplyDelete