Looking for the least expensive medical coverage? How about one free year from the state's largest health maintenance organization?
There's just one catch: Thanks to a new benefit being offered by Columbia-FreeState Health System, dependents of state employees receive a year's worth of free medical insurance if the employee signs up with the HMO and dies next year.
"We thought it was a really interesting and unique need that people had," said Zelda Lipton, marketing vice president with Columbia-FreeState, a subsidiary of Blue Cross and Blue Shield of Maryland. "We think that it's particularly attractive to families."
The benefit, offered to state employees who sign up during the current enrollment period for Columbia-FreeState coverage next year, applies whether the worker is actively employed or retired. There are no waiting periods and no restrictions based on pre-existing conditions, the company said.
Columbia-FreeState executives said the program could be extended to the market as a whole if this initial yearlong trial proves fruitful. A number of companies have already expressed interest, Ms. Lipton said.
With competition always stiff for new members, HMOs and other health insurers have often turned to new and different products to attract subscribers. But industry observers, none of whom had heard of the free-insurance benefit anywhere else, say it is particularly unusual.
"I assume it's more a total gimmick than anything real," said Merwyn R. Greenlick, director of Kaiser-Permanente Health Research and chairman of the Department of Preventive Medicine at Oregon Health Sciences University in Portland. "On the other hand, it would be very strongly appreciated and probably a socially useful thing to do."
Unless Columbia-FreeState can redesign the offer, however, the new benefit could be short-lived. Strictly speaking, it is considered a life insurance benefit to state employees, and state laws prohibit HMOs from offering life insurance.
An initial attempt by the company to provide a backup insurer to share the financial risk of the benefit was rejected by the state's insurance division on grounds that Columbia-FreeState remained the primary insurer. Talks between regulators and the company are planned.
"We're still waiting for them to submit what they want to do," said Philip Wickenden, associate insurance commissioner in charge of life and health policies. "We're working with them. We'd hate to see them renege on the state employees."
Catherine K. Austin, assistant secretary for administration at the state Department of Personnel, said she welcomes the new benefit for her employees and hopes that other insurers follow suit.
"No other company has ever come up with this kind of idea," she said. "I think it's a great opportunity for an employee who is new to the system
who dies from natural causes and doesn't have sufficient time to leave retirement benefits to a spouse or children."
Ms. Austin said the benefit was added to the insurance contract after the premiums had been set and thus was being offered to employees at no additional charge.
It is difficult to estimate how many employees will find the new benefit useful.
The state has 70,000 employees and 20,000 retirees. Columbia-FreeState covers 3,500 of these employees, providing insurance for a total of 8,000 people. Sixty percent of those employees have dependents, Columbia-FreeState said.
Although no statistics were immediately available on how many state employees die each year, the Maryland State Retirement and Pension Systems, which includes state employees, said that about 285 of its 163,000 members died over the past 12 months. Nearly 1,680 of 51,000 retirees died during the same period, said J. Barry Schaub, director of benefits processing.