California Blue Cross offers different approach to health insurance coverage to young people

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CBS-TV Evening News

JOHN ROBERTS, anchor: Millions of carefree young Americans don’t think about health care until they sick or hurt. Jerry Bowen tells us a new way the insurance industry is looking to change that.

JERRY BOWEN reporting: John Grover would seem to have it all–the California good life, a great wave now and then, everything but health insurance.

Mr. JOHN GROVER: In the back of my mind always, it’s, like, ‘Yeah, well, maybe you shouldn’t try that trick. It’s pretty difficult. You don’t have any health insurance if something happens.’

BOWEN: His job doesn’t come with benefits. At 27, he’s no longer eligible to be on his parents’ plan, and when he looked for something affordable, he came up empty.

Mr. GROVER: I think the least expensive one I found was about $150 a month and it was, like, minimal coverage.

BOWEN: And Grover is doing what millions of people his age do, going without any health insurance at all, an age group 19 to 29 that represents nearly one-third of the nation’s uninsured, risk-takers that are now in the bull’s-eye of Blue Cross, a bloc of potential customers too large to ignore. So Blue Cross is reaching out online in California with health coverage that fits a lifestyle
named Tonik. With one click, customers can choose among three plans. Thrill-Seeker comes with the lowest monthly premium, $64, and the highest deductible, $5,000. Coverage is basic but doesn’t include maternity costs.

Mr. STEVE SYNOTT (Blue Cross of California): There is no paper application to this. You do everything online and that’s different.

BOWEN: Observers say the plan points toward a disturbing trend in the insurance industry. With fewer employers providing benefits, more people are forced to pay out of their own pockets for individual plans. Blue Cross, they say, is cherry-picking the healthiest segment of the market.

Mr. JAMIE COURT (Consumer Rights Advocate): So the insurance company knows it’s got you going and coming. If you’re healthy, they’ll keep taking your money and never pay a benefit, and if you get very, very sick and they don’t want you, all they have to do is raise your premiums a thousand percent.

BOWEN: Maybe, but personal trainer Mitch Harrington says the bigger risk for him was going without insurance. And now that he’s got it…

Mr. MITCH HARRINGTON (Tonik Member): Definitely I can sleep better at night knowing that, you know, if anything should happen, you know, God help us nothing will, definitely I’m covered.

BOWEN: And if it catches on, the California good life may have a new dimension–sun, surf and a safety net.

Jerry Bowen, CBS News, Los Angeles.

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