GHLIT health insurance for veterinarians to end by 2014

Obamacare killed association-based plans, officials say

December 26, 2012 (published)
By Jennifer Fiala

The American Veterinary Medical Association’s Group Health and Life Insurance Trust (AVMA GHLIT) will stop offering medical insurance after Dec. 31, 2013, sending some 17,500 veterinarians and their families on the hunt for new health care coverage.

The change was spurred by GHLIT insurance underwriter New York Life Insurance Company's decision to exit the medical insurance market in response to federal health care reform that takes effect on Jan. 1, 2014.

“The GHLIT is deeply saddened by this decision, as we know how important medical insurance is for you and your family,” officials said in a media statement. “If you’re affected by the (New York Life) decision, you undoubtedly have questions. GHLIT has posted numerous resources on its website for your information, including the letter explaining NYL’s decision, answers to frequently asked questions and a press release.”  

The GHLIT sent letters dated Dec. 14 to policyholders informing them of the decision. GHLIT disability and life insurance programs — accounting for approximately 29,000 non-medical policies — will continue unchanged.

The GHLIT has held a master insurance policy underwritten by New York Life Insurance Company for 20 years, enabling AVMA members to purchase insurance under the group arrangement. Last January, officials warned that the GHLIT health insurance program might become a casualty of the Patient Protection and Affordable Care Act (PPACA), commonly called Obamacare. At the time, they were waiting to see how the U.S. Department of Health and Human Services (HHS), charged with implementing and promulgating the PPACA’s statutory language, might treat “bona fide associations."

Bona fide associations are comprised of association-built entities that organize their own health insurance programs. The classification, defined in title XXVII of the Public Health Services Act, allowed New York Life to design a national plan exclusively for AVMA members.

As the AVMA’s indemnity arm, the GHLIT has managed the association's health insurance offering since 1957.

By 2014, however, association-only programs will be upended. Enactment of the PPACA forces New York Life Insurance Company to enter the individual health insurance market and open its brand of association medical coverage to the general public.

What’s more, association health insurance plans and premiums will need to be approved by departments of insurance in every state and the District of Columbia. Individual medical insurance is not a product New York Life Insurance Company offers, so the company is closing its business with bona fide associations, including the GHLIT.

The GHLIT’s nine trustees learned of New York Life's decision to get out of the health insurance market on Nov. 30. Their move to follow suit “wasn’t made lightly,” GHLIT CEO Libby Wallace said.

"We have looked for other underwriters, and because of the way the Patient Protection and Affordable Care Act is written, companies aren’t willing to underwrite groups like ours,” she said. “We’ve been to several major carriers, and they weren’t willing to assume the business.”

Wallace stressed that the AVMA and GHLIT didn’t simply give up on the ability to offer medical coverage to veterinarians.  

“We knew that without clarification, the law was going to adversely affect us,” she explained. “Over the past year, we hired a lobbyist in Washington who was working with agencies, lawmakers, departments and HHS, having conversations specifically about bona fide associations.”

Their efforts didn’t work. In the aftermath, GHLIT hopes to help members find substitute insurance.  

“We really want to be there for the membership, so as part of this change, we want to help our members navigate this process,” Wallace said.

Plans on how the GHLIT will do that are still in the works, and it’s likely that new information will be announced next week during the AVMA Veterinary Leadership Conference in Chicago.

The GHLIT's expressed commitment to help policyholders has done little to ease the worries of some veterinarians.

“They’ll spend the next year compiling a list of phone numbers we can call,” said Dr. Kate McDuffee, wryly.

The veterinarian from Dahlonega, Ga., joined dozens of her colleagues on the Veterinary Information Network (VIN), an online community for the profession, to discuss how the GHLIT health insurance debacle impacts them.

Many veterinarians blamed the AVMA and GHLIT directly. Others lambasted the Obama administration and other government leaders for not addressing the “unintended consequences” of such a controversial health care mandate.

Some on VIN lamented the end of an era.

“I have had AVMA GHLIT since birth, literally, and I’m 53,” wrote Sarah Brown of Mills River, N.C. “My father signed up before I was born, and I have continued it throughout my life. I feel like I’m having to join the masses in fighting and juggling insurance companies. Bummer.”

Brown suspects that without the health insurance draw, AVMA membership numbers will suffer. Roughly 90 percent of all U.S. veterinarians are AVMA members, and membership is required to access the association’s indemnity offerings, including life and disability insurance as well as malpractice coverage.

Frustrated by the prospective loss of GHLIT health insurance, Dr. Michael Berkenblit of Riviera Beach, Fla., might soon be an AVMA defector.

“I already had a fairly negative view of the AVMA,” he wrote in a VIN discussion. “This ... does not make me like them any more. As others have said, this will probably be the end of my membership.”

Wallace advises veterinarians to continue their GHLIT-sponsored health insurance policies until more is known about what states will be offering in terms of health care options.

“Terminating the GHLIT coverage too early may result in a lapse in medical coverage for some, thus resulting in penalty fees later,” she explained by email. “In order for individuals to be able to get medical insurance without regard to pre-existing conditions (which is not effective until 1/1/2014 when the new regulations take effect), they must be able to show continuation of credible coverage.”

She urges GHLIT medical insurance policyholders to hold off on shopping around until the states roll out their health insurance exchanges — marketplaces where individuals and small businesses can compare policies and premiums and buy insurance. All state exchanges must be certified and operational by Jan. 1, 2014, in accordance with federal law.

“The states have not yet developed their public exchange options (final development is due next summer) and most insurance carriers are still working on their options for the open market,” Wallace said by email. “I understand there will be an enrollment period for most exchanges in the third/fourth quarters of 2013.”

Wallace added that the GHLIT, in its commitment to continually seek alternatives, might consider developing a private health insurance exchange. In the meantime, she said, “we have every intention of providing members with guidance to help work though the process.”

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