President's Page

Back to the Future

By Loren Golden

One of my goals during my year as president is to determine whether the ISBA can present a meaningful, competitive health insurance program for our members. Please consider this President's Page as a newspaper article with me, your humble scribe, as the cub reporter, reporting on where we have been, where we are now, where we hope to go, and how we might get there.

The ISBA has one of the best, most competent staffs on the face of this planet. (I am given to hyperbole on occasion, but I really mean it.) I asked Director of Bar Services Janet Sosin, General Counsel Dennis Rendleman, and Executive Director Bob Craghead to put together a report on health insurance and the ISBA. They came back with the following information.

It has been the policy of the ISBA Insurance Program to offer the best coverage available to the members, regardless of health. For many years, the ISBA offered a health insurance program and malpractice insurance through Pearl and Associates. In 1989, the ISBA switched administrators to DRIASI (formerly PBA, Inc.) to offer HMOs, major medical, and small group plans.

Over the years it has become very difficult to find HMO plans offering an open enrollment period annually to associations. After termination of the ISBA group by several HMOs, the ISBA has offered United Healthcare (UHC) (formerly Chicago HMO) and Unicare (formerly Rush-Presbyterian/Anchor) since 1995. In addition, the ISBA Insurance Program has always offered individual underwritten and small group plans.

In 1999, the Insurance Committee, chaired by Patrick Kronenwetter of Chicago, began a review of administrators because of frustration with DRIASI on customer service issues and for not providing proposals for new health products to offer ISBA members. Based on the proposals received and interviews conducted, Seabury and Smith of Park Ridge (now known as Marsh Affinity Group Services) was selected to become the new administrator of the ISBA Program. Marsh took over on June 1, 2001. At conversion, UHC HMO was the largest plan with over 1,100 insureds and $3.9 million in premiums. (Note: the 1,100 insureds consisted of about 400 ISBA members and 700 employees and family members.)

Because of adverse selection of insureds and open enrollment, the claim-to-premium ratio had been steadily climbing in the UHC plan to 144 percent. As a result, our insureds experienced a premium increase in January 2001 of 56 percent, in January 2002 of 60 percent, and in April 2002 of 17.5 percent. Also, in 1999 UHC changed to a gender, age, and number-of-dependents rating for the ISBA group, which also caused an increase in premiums.

A couple of years ago, UHC instituted a policy that it would only insure association members and not employees or family members. Because of this new policy and the increase in premiums, the number of insured members dropped under 250 in March 2002, resulting in termination of our group by UHC effective May 31, 2002. ISBA members were offered conversion options to other UHC plans and Unicare HMO.

Meanwhile, the Insurance Committee, chaired by David Sosin of Palos Heights, recommended to the Board of Governors last year that a member survey be conducted on health insurance needs to better determine the direction the Association should go. After a search of qualified insurance consultants, the committee recommended and the Board approved the Center for Association Resources (CAR) of Palatine to conduct the survey. Specific objectives of the survey are to

(1) gather information and data on selected current members within smaller firms and their outlook on their current health insurance coverage and other options they might consider,

(2) analyze the data to determine how best to provide a tailored insurance product to selected members of the ISBA,

(3) analyze whether the insurance market is such that the ISBA should continue to provide a health insurance program to its members, member firms, and their families, and

(4) provide recommendations to the ISBA for future use in conjunction with this strategic marketing process.

It has become nearly impossible to find an HMO that will provide coverage to associations. The ISBA is unique among associations in that it offered UHC HMO (until May 31, 2002) and still has a program with Unicare HMO with an annual open enrollment period. Years ago, associations could offer traditional policies with simplified enrollment. Over the years these programs experienced spiraling claims that caused premiums to increase. The fallout is the loss of healthier people in the program who changed insurance for lower premiums, leaving associations with insureds who have medical problems, high claims, and very few healthy insureds to drive premiums down. This process is referred to as an "insurance death spiral."

Up until 1998, there were six "A" rated insurance carriers writing association business. In 1998 there was only one remaining, CNA Insurance. In 1999, CNA cancelled all association policies. Our current administrator, Marsh, is the largest broker for the association market. It works with over 700 associations, of which only a very few state associations have a group HMO. With Marsh's expertise in the association market and the responses from the survey, the committee hopes to be able to recommend a strategy on health insurance needs for ISBA members. Through the ISBA Mutual Insurance Company, the ISBA has provided a stable, quality product to many attorneys at a fair price. Such goals may be hard to achieve in the health insurance market.

The members of the 2002-2003 Standing Committee on Insurance Program and Services are David B. Sosin of Palos Heights, Thomas J. Ahern of Arlington Heights, Phillip B. Lenzini of Peoria, Marc E. Abramson of Chicago, David N. Dailey of Moline, John T. Fankhauser of Woodstock, Patrick J. Kronenwetter of Glen Ellyn, Michael J. Maslanka of Chicago, Andrea M. Schleifer of Chicago, Richard M. Seligman of Chicago, Mary C. Stark-Hood of Oak Brook, Laurence A. Swanson of Oswego, Dwayne Thompson of Park Ridge, and Evette J. Zells of Durham, North Carolina.

The ISBA health programs do not reach a large segment of the membership. We believe it is worthwhile to investigate the possibility of revamping our programs to provide a variety of coverages at market-competitive prices. We are working hard to ascertain whether the Association can make health insurance a vital, broad-based member service. I hope to have more to report on with regard to health insurance by the Midyear Meeting in December.