By Samantha Wright
The insurance industry is adapting to the shifting healthcare liability marketplace by continuing to pitch a variety of new products at both the personal lines and commercial liability markets.
Starr Companies, for example, is staying out of the space that is regulated by the ACA by selling affordable, supplemental insurance solutions to defray out-of-pocket expenses incurred by millions of individuals who are opting – mostly out of necessity – for insurance plans with super-high deductibles.
“What’s happening in the market in the US today is that you have a situation where more and more households have bought plans with high deductibles and copays that add up to between $5,000-$10,000,” said Jeffrey Herman, head of Accident & Health at Starr. “At the same time, almost 50 percent of households in the US have less than $10,000 of savings at any one time.”
Starr has found an opportunity within this conundrum. “We can provide a backdrop to those expenses, and help prevent personal bankruptcies,” Herman said. “Still to this day, even with ACA, sickness is the biggest cause of personal bankruptcy in the US.”
On the other end of the spectrum, IronHealth has capitalized on one of the most complex new market niches of the healthcare sector that has emerged in this era of unbridled consolidation. It just launched a product that provides coverage for actual or alleged breach of the healthcare representation and warranty in a purchase and sale agreement involving a healthcare organization.
Medical billing issues stemming from the ACA present further opportunities for new products in the healthcare liability sector.
“When Obamacare was created, one of the things that was planned to help fund it was a significant crackdown on improper medical billing practices in regard to Medicare and Medicaid,” said Brad Rosgen, healthcare practice leader for Burns & Wilcox, the largest independent wholesale broker and underwriting manager in the US.
This, in turn, has created a new uncovered exposure for market classes throughout the healthcare sector.
“I would say that along with cyber and data privacy, errors and omissions for billing is a huge uncovered exposure right now, because it’s not something that a lot of people in the industry on the practitioner’s side think about,” Rosgen said. “I don’t think they realize you can actually purchase insurance for that.”
In fact, they can. Burns & Wilcox, for example, is working with Lloyd’s of London on a new program that covers fines and penalties associated with improper billings. “It’s not going to cover outright fraud or criminal acts, but it covers a significant amount of exposures that any healthcare organization faces,” Rosgen said.
