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Major Medical Expense Benefits
Fall 1960
Bulletin No. 1293
UNITED STATES DEPARTMENT OF LABOR
Arthur J. Goldberg, Secretary
B UREAU O F LABOR STATISTICS
http://fraser.stlouisfed.org/
E w a n C l a a u e . C o m m is sio n e r
Federal Reserve Bank of St. Louis
HEALTH AND INSURANCE PLANS
UNDER COLLECTIVE BARGAINING
Major Medical Expense Benefits
Fall 1960
Bulletin No. 1293
M a y 1961
UNITED STATES DEPARTMENT OF LABOR
Arthur J. Goldberg, Secretary
B U R E A U O F L A B O R S T A T IS T IC S
E w a n C la g u e , C o m m issio n e r
For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington 25, D.C.
- Price 20 cents
Preface
This study of m a jor m edical benefit features of health
and insurance plans under collectiv e bargaining, based on an
analysis of 300 selected plans, is the fourth in a s e rie s of
5 reports by the Bureau of Labor Statistics dealing sepa
rately with the various components of health and insurance
plans. The first report d escrib ed accident and sickness bene
fits (BLS Bull. 1250, published in June 1959); the second, h o s
pital benefits (BLS Bull. 1274, March I960); and the third,
surgical and m edical benefits (BLS Bull. 1280, November I960).
The final report (forthcoming BLS Bull. 1296) will deal with life
insurance and accidental death and d ism em berm ent benefits.
A s a whole, this se rie s brings up to date the Bureau’ s e a rlier
Analysis of Health and Insurance Plans Under C ollective B a r
gaining, Late 1955 (BLS Bull. 1221, November 1957).
Each of the 300 plans analyzed c o v e re d at least 1, 000
w ork ers.
The selected plans provided benefit cov era g e to a
total of alm ost 5 million w ork ers, or about two-fifths of the
estimated cov era g e of all health and insurance plans under c o l
lective bargaining. The p rovisions of these plans do not n e c e s
sarily reflect the p rovisions of sm aller plans under collectiv e
bargaining or those in nonunion situations.
Since this is the Bureau's first bulletin on m a jor m edical
plans, a b rief description of their ch a ra cte ris t ics and of their
m o re important advantages and disadvantages is also included.
This study was conducted and prepared in the Bureau's
Division of Wages and Industrial Relations by Donald M. Landay
and Dorothy R. Kittner, with the assistance of Stanley S. Sacks.
Contents
Page
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o o u j i
1
o o o o o o
Introduction -------------------------------------------------------------------------------------------------------Scope of study----------------------------------------------Prevalence --------------------------------------------------Financing -----------------------------------------------------Supplementary major medical plans ----------The deductible ---------------------------------------Coinsurance -------------------------------------------Length and application of benefit periods
Maximum benefits----------------------------------Comprehensive major medical plans --------Tables:
1.
2.
3.
4.
5.
6.
7.
8.
Health and insurance plans studied in manufacturing and
nonmanufacturing industries by number of workers
covered and type of bargaining unit, fall I960 ----------------------------------Health and insurance plans studied by industry and groups
eligible for major medical benefits, fail I960 ----------------------------------Number of plans studied with major medical benefits for
eligible groups, fall I960 and late 1955 --------------------------------------------Method of financing 43 major medical benefit plans by
groups eligible, fail I960 -------------------------------------------------------------------Type and amount of deductible in 3 7 supplementary major
medical plans by eligible groups, fail I960 --------------------------------------Length and application of accumulation period and deductible
amount in 37 supplementary major medical plans by
eligible groups, fall I960 -------------------------------------------------------------------Length and application of benefit period and deductible
amount in 37 supplementary major medical plans
by eligible groups, fall I960 --------------------------------------------------------------Maximum benefits payable and length of benefit period in
37 supplementary major medical plans by eligible groups,
fall I960 -----------------------------------------------------------------------------------------------
10
11
11
12
12
13
14
15
A pp en d ix:
Digest of 6 comprehensive major medical plans under collective
bargaining, September I960 ---------------------------------------------------------------------
v
16
Health and In su rance Plans Under Collective B arg a in in g
Major M edical Expense Benefits, Fall 1960
Introduction
Major medical expense or catastrophic illness insurance has been the
fastest growing type of health insurance since it was introduced about 10 years
ago. 1 In late 1959 and early I960, about one-fifth of the plant workers in the
metropolitan areas included in the Bureau of Labor Statistics community wage
survey program had major medical expense insurance— usually as a supplement
to basic hospital, surgical, or regular medical insurance. 2 Despite its apparent
appeal, it has been opposed by some health insurance experts in the labor move
ment. 3 There are signs, however, that this opposition is subsiding, especially
toward major medical insurance as a supplement to, rather than as a substitute
for, basic hospital, surgical, and medical insurance. 4
Major medical expense or catastrophic illness insurance provides pro
tection against the expenses of virtually all types of personal health care rendered
or prescribed by a physician.
Unlike "basic” health insurance, which is largely,
though not entirely, restricted to in-hospital treatment, major medical insurance
covers almost all necessary personal health services and supplies regardless of
where they are rendered or dispensed.
The chief services usually excluded are
the maternity expenses ordinarily covered by basic plans and dental care. 5
The protection in the covered area, however, is not complete.
All plans
have a "coinsurance feature" under which the insurer pays 75 or 80 percent of
covered expenses and the insured, the balance.
All but a few plans also require
that the insured pay an initial part of his expenses— a "deductible"— before any
benefits begin.
If he is also covered by a basic health insurance plan, the de
ductible and coinsurance in nearly all major medical plans are applied only to the
expenses not met by the basic plan.
Furthermore, the insured must bear all
costs over the maximum amount— usually between $5,000 and $10,000— allowed
for each disability, for each benefit period, or over his lifetime.
1 The Extent of Voluntary Health Insurance Coverage in the United States.
(A survey conducted annually by the Health Insurance Council, New York. )
For extent of coverage among office and plant workers in metropolitan
areas, see Supplementary Wage Benefits in Metropolitan Areas, 1959-60, Monthly
Labor R e v i e w , April 1961, pp. 379-387.
5 Catastrophic Illness Insurance: A Barrier on the Road to Health (AFLCIO publication No. 51, May 1957) and Jerome Pollack, Major Medical Expense
Insurance: An Evaluation (in American Journal of Public Health. March 1957,
pp. 322-3 34).
Mr. Pollack is a health consultant on the staff of the United Auto
mobile, Aircraft and Agricultural Implement Workers of America.
See, for example, Jerome Pollack, Organized Labor*s Future Benefit
Objectives (a paper read to the Council on Employee Benefit Plans, October I960).
In addition, only the following types of disabilities and benefits are com
monly excluded: Cosmetic surgery, unless required because of an accident occur
ring while the insurance was in effect; and eye glasses and hearing aid expenses.
2
Major medical plans are of two types: (l) Supplementary plans which
coinsure expenses in excess of both the deductible and those covered by a basic
plan, and (2) comprehensive plans which replace a basic plan by coinsuring
medical expenses exceeding the deductible.
Both types place ceilings on the
amount of benefits payable for each insured person.
The following tabulation
illustrates how $5,000 of covered expenses incurred through a single major ill
ness might be divided between the insurer and the insured under each type of plan.
Basic and
supplementary
Comprehensive
$5,000
$ 5,000
Total medical ex p en se-------------------------------Insurance company pays—
j
Basic plan b en efits-------------------------------$2,100
Major medical benefits
'80 percent coinsu rance)---------------------2,240
T o ta l-------------------------------------------------Employee pays—
Deductible---------------------------------------------- .
Share of major medical
(20 percent)------------------------------------------Total
None
$3,960
$3,960
$4,340
$100
$50
560
990
$660
$1,040
1 Approximately the maximum reimbursement offered by the average hospital,
surgical, and medical insurance plan.
Despite the deductible, the coinsurance feature, and the ceiling on the
amount of benefits, major medical expense plans are said to have several ad
vantages over basic benefit coverage:
1.
Major medical plans are comprehensive in that instead of covering
certain enumerated expenses only, they cover all personal medical expenses
(with the few exceptions previously noted) whether incurred in or out of a hos
pital.
They are, therefore, fairer because thay reimburse virtually all patients
by the same formula regardless of the specialties of the physicians serving them
or where they are treated or with which drug or diagnostic techniques. 6 It is
also frequently claimed that, unlike most basic plans, major medical plans do not
distort medical practice or stimulate unnecessary or prolonged hospitalization by
covering a service only if it is performed in the hospital.
2.
The maximum amount of benefits payable is much higher than under
basic plans, particularly in respect to physicians* and surgeons* fees.
As pre
vious reports in the Bureau*s series on health and insurance plans under collective
bargaining have shown, the maximum cash reimbursements payable to active
workers per disability averaged $1,000 for hospital room and board, $300 for
hospital extras, $307 for the most expensive surgical procedure, and $517 for
6
Patients with mental and nervous disorders are, under some plans, a
further exception to this generalization.
See also footnote 5.
3
in-hospital medical care— a maximum of $2,124 for all expenses.7 As already
indicated, the typical maximum under major medical plans is $5,000 or more.
3.
Insurance companies and consultants maintain that only partially re
imbursing the insured— the combined effect of the deductible and coinsurance— has
three advantages over basic plans insofar as the latter provide full reimbursement:
a.
It discourages overutilization of services and indul
gence in unnecessarily expensive treatments and facilities.
b.
It gives patients an incentive to police medical fees,
which the profession itself admits needs to be policed.
c.
It eliminates the payment of many small claims, which
in turn reduces administrative costs and thus saves . . . money
which otherwise would be wasted on higher insurance premiums
to offset such costs. 8
These advantages are denied or minimized by union spokesmen who em
phasize that major medical insurance does not assist the worker in budgeting his
ordinary health care expenditures.
Most medical bills
. . . are small, but much more frequent than the big bills.
They are under the deduction limits of major medical and they
add up to a large proportion of total medical cost.
In any one
year only a small percentage of wage earners could take ad
vantage of major medical coverage. What the wage earner wants
is comprehensive coverage that starts right at the bottom, cov
ering all the small bills and works upward toward the infre
quent major expenses.
From this point of view, major medical
misses the real problem.
It is a frill that diverts resources
away from the essential need.
*
*
*
While acknowledging the need to pool resources for the large
and unexpected risks, /The A F L .-C IQ 7 insists that the first need
is to provide a method of budgeting in advance for all forms
of medical care. 9
It is also maintained that where medical bills are large— the situation at
which major medical protection is primarily aimed---. . . the wage earner has to pay a large slice of those big
bills because of the deductible and coinsurance provisions—
and when you haven*t got it, one or two thousand dollars looks
as bad as a lot more . . . 10
7 Health and Insurance Plans Under Collective Bargaining: Hospital Bene
fits, Early 1959. BLS Bull. 12 74, pp. 20 and 21, and Surgical and Medical
Benefits, Summer I960, BL.S Bull. 1280, pp. 17 and 31.
(These bulletins were
summarized in the Monthly Labor Review for February, June, and July I960.)
The hospital benefits would be somewhat greater if the value of the semiprivate
room and of the extra services furnished by 132 service plans were included in
the averages above.
Major Medical Insurance— An Analysis of Evolving Patterns (New York,
Industrial Relations Counselors, Inc. ), IRC Memo 134, October 1957, p. 5.
9 AFL-CIO, Catastrophic Illness Insurance, op. cit. , pp. 6-8.
10 Ibid. , p. 9.
4
In addition to its limited pocketbook protection, labor spokesmen claim
two other shortcomings for major medical insurance:
(l)
Major medical insurance does not encourage prompt
use of medical facilities in the early stages of illness.
The
deductible feature actually discourages timely recourse to med
ical attention and gives a financial incentive for waiting until
the illness is a major one. 11
Although this argument applies to all comprehensive major medical plans
(which completely replace basic benefits) and to most supplementary plans, it
does not apply to the small number of plans that supplement basic plans covering
the initial expenses of a wide range of health benefits. It is as much a criticism
of basic plans as it is of major medical plans. 1
The other objection is that:
(2) . . . major medical insurance is likely to inflate medi
cal costs.
Physicians raise theii* charges with the patient's
ability to pay.
In the eyes of the physician, this insurance
greatly increases the patient's ability to pay and is likely to
lead many physicians to charge patients considerably more than
they would in the absence of such coverage. 13
Considerable statistical evidence has been compiled by insurers, medical
societies, unions, and consultants, in support of this charge. 14 To counteract
such inflationary tendencies, most plans cover charges to the extent that they
are "reasonable and customary. n One plan, for example, excludes "charges in
excess of those usually made for the services, treatments or supplies in the
absence of insurance, or in excess of the general level of the charges in the
area. " Since such restrictions are difficult to enforce without incurring the dis
favor of the insured, who makes up the difference, some insurers have gone back
to the principles of basic health insurance underwriting by inserting into their
policies maximum limits ("inside lim its") for specified expenses.
For example,
some plans place a restriction on daily hospital room and board expenses, and
others set limits on the amount the plan pays per visit for psychiatrists services
outside a hospital.
The two replies most often made to the charge that coinsurance has an
inflationary tendency are: (l) The uninsured percentage (20 or 25 percent) is
too small to influence the patient's selection of services, and (2) the patient's
sophistication in medical economics is rarely adequate for the task he is asked
11 Ibid. , p. 6.
12 This "shortcoming" of comprehensive major medical plans is shared, to
some extent, by nearly all basic plans except for the comprehensive service plans
such as the Kaiser Foundation, the Health Insurance Plan of Greater New York,
and the several Group Health associations— the health care programs usually
advocated by the labor critics of major medical plans. See, for example, speeches
of Nelson Cruikshank, Director of the AFL-CIO Social Security Department.
j* AFE-CIO, Catastrophic Illness Insurance, op. cit. , pp. 9-10.
14 Some of this evidence is summarized by Jerome Pollack, Major Medical
Expense Insurance, op. cit. , pp. 330-333.
5
to perform .15 Partly to overcome the first difficulty, some plans coinsure a
smaller fraction of charges for services where patient cooperation in policing
them is particularly important.
Many plans, for example, pay only 50 percent
for the out-of-hospital treatment of mental and nervous disorders, compared with
75 or 80 percent of other charges.
Scope of Study
The 300 health and insurance plans under collective bargaining studied
by the Bureau of Labor Statistics, were selected to provide a broadly repre
sentative view of the type of protection provided by plans covering 1,000 or
more w orkers.16 Factors given primary consideration in the selection of the
sample were industry, geographic location, type of bargaining unit, and size of
plan as measured by active worker coverage.
The 300 selected plans, which
ranged in coverage from 1,000 to a half million workers, provided health and
insurance benefits to a total of 4 .9 million workers (table 1), or about 40 per
cent of the estimated number of workers under all health and insurance plans
under collective bargaining agreements. All coverage data reported in this study
relate to the number of active workers (men and women) covered by the plans.1
Virtually every major manufacturing and nonmanufacturing industry was
represented in the sample studied (table 2).
Almost 3 out of 4 plans (219),
covering two-thirds of the workers, were in manufacturing industries.
Nearly
a third of the plans (95), covering more than 40 percent of the workers, were
negotiated by multiemployer groups.
The 43 major medical plans covering active workers found among the
300 health and insurance plans studied included the supplementary major medical
plan covering about 500,000 nonoperating railroad w orkers.18 Since this plan
accounted for almost half the active workers under supplementary major medical
plans, it greatly affects the worker coverage shown in the tables.
Prevalence
Of the 300 health and insurance plans under collective bargaining studied,
43, covering about 1,200,000 workers, provided major medical benefits for active
workers (table 2).
Dependents of active workers were covered by 39 plans.
Nine plans continued coverage for retired workers and eight for their dependents.
15 Ibid., p. 331.
See Health and Insurance Plans Under Collective Bargaining: Hospital
Benefits (BLS Bull. 1274), and Surgical and Medical Benefits (BLS Bull. 12 80).
For example, when reference is made to dependent coverage, the ex
tent of such coverage, is expressed in terms of the number of active workers
covered by plans which extend or provide the specified benefits for dependents.
No attempt was made to determine the number of women workers, dependents of
active workers, retired workers, or dependents of retired workers covered by the
plans in this study.
18
This plan extended major medical benefits to dependents, effective March
1961; this change is not accounted for in this report.
6
The number of plans covering active workers has tripled since the Bu
reau's 1955 study (table 3)— substantially less than the increase during the same
period in the number of major medical plans covering employee groups in gen
eral. 19 Major medical plans are still so uncommon among collectively bargained
health and welfare programs that only in the petroleum refining, electrical ma
chinery, and transportation industries did they apply to half or more of the work
ers under the selected health and insurance plans studied by the Bureau for each
industry (table 2).
Of the 3. 3 million workers in manufacturing industries in
the 300 plans studied, approximately 18 percent were covered by major medical
benefits.
The proportion in nonmanufacturing was twice as great (36 percent)
owing chiefly to the weight of the railroad plan covering 500, 000 nonoperating
railroad workers.
Except for the railroad plan and four others, all of the plans providing
major medical benefits were with single employer units.
On the other hand,
many multiemployer plans provided comprehensive service benefits requring little,
if any, supplementation. 20 Most of the major medical plans, as shown below,
were supplementary plans, i .e ., they extended the scope of existing basic hos
pital, surgical, and medical plans. 21
Groups covered
Active workers -------------------------------------- ----------Dependents of active workers ---------------- ---------Retired w orkers--------------------------- — - ---------Dependents of retired w ork ers----- — — ---------table
1 1
2.
Total
43
39
9
8
Supplementary
plans
1 37
34
5
5
of these plans covered only dependents of maritime workers.
Comprehensive
plans
6
5
4
3
s ee footnote
1
F inane ing
The entire premium for active workers was borne by the employer in
less than one out of three major medical plans (table 4) as contrasted with about
two out of three of the basic benefit plans studied in 19 5 9 . 22 Moreover, while
no basic benefit plans for active employees were financed solely by the worker,
19 The current sample is comprised of 271 plans also covered in the Bu
reau's 1955 study, Analysis of Health and Insurance Plans Under Collective Bar
gaining, Late 1955 (BES Bull. 1221, November 1957) and 29 replacements that
were required because of a decrease in plan coverage to fewer than 1,000 work
ers, company merger or shutdown, or lack of sufficient current data. The re
port on the 1955 study presented only summary information on certain aspects
of major medical plans.
For growth in major medical plans in general, see
Health Insurance Association of America and Institute of Fife Insurance: Group
Insurance Coverages in the United States, a series of annual reports previously
issued by the Life Insurance Association of America.
20 For summary descriptions of some of the comprehensive service benefit
plans, see Digest of One Hundred Selected Health and Insurance Plans Under
Collective Bargaining, Early 1958 (BES Bull. 1236, October F958 appendixes,
pp.
2 4 8 - 25 1 ) .
After this analysis was completed, it was learned that one plan was
converted from a comprehensive to a supplementary plan with basic benefits.
Op. c it., BLS Bull. 1274, table 5 and BLS Bull. 1280, tables 6 and 7.
7
five major medical plans (nearly one out of nine studied) were so financed. The
burden of financing major medical benefits for dependents was also more often
borne by the worker than the employer, when compared with basic benefits.
Even if the comparison is limited to single employer plans (all but five of the
major medical plans were in single employer bargaining units), the employer
paid the entire cost of basic plans more often than that of major medical plans.
He paid the entire cost of active workers* benefits, for example, in half the
basic plans in single employer units, but in only one-fifth of the major medical
plans. On the other hand, while one out of three plans in single employer units
required retired workers to pay the entire cost of basic benefits, only one out
of nine major medical plans covering retired workers required them to pay the
entire cost of major medical benefits.
Supplementary Major Medical Plans
The chief characteristics of the 37 supplementary plans covering almost
1 million workers are described in some detail below; those of the 6 compre
hensive plans covering about 200, 000 workers are separately summarized.
The Deductible. ----Nearly all of the supplementary plans had a ’’corridor1'
type of deductible, that is, an uninsured area between basic and major medical
benefits (table 5). Two plans, however, had an ’’integrated" deductible whereby
the value of the basic benefits was subtracted from the deductible amount; in other
words, major medical benefits were payable for expenses in excess of basic
benefits or the deductible amount, whichever was greater (table 5).
In all plans, the deductible has three dimensions: (l) The dollar amount,
(2) the time period over which the amount of deductible expense may be accumu
lated, and (3) the number of different disabilities that may be included in a single
accumulation.
The dollar amount was usually uniform for all workers covered
by the plan, but in six plans covering active workers and their dependents, it
was based on the workers* earnings. 2
The number of plans applying the deductible to each disability was about
the same as the number applying it to all disabilities occurring within a given
time (table 6). The latter type usually had a $100 corridor deductible and used
the calendar year as the accumulation period. To reduce the effect of using an
arbitrarily selected 12-month period, most of these plans credited toward the de
ductible unreimbursed expenses incurred in the last 3 months of the preceding
year, even though they may have been used to satisfy that year’ s deductible.
The accumulation period in the plans on a per-disability basis began
on the first day of medical expense and continued for 2 to 24 months. Six of the
nine plans with a deductible of $ 100 had a 2-year accumulation period, while
four of the six plans with a deductible of $ 15 0 or more had an accumulation
period of one-half year or less.
Thus, instead of offseting a large deductible
with a long accumulation period, the plans with the larger deductibles also had
the shorter accumulation periods.
Coinsurance. — About half the plans reimbursed the active worker and
his dependents for 75 percent of medical expenses in excess of the sum of basic
benefits and the deductible, and half covered 80 percent.
One plan stipulated
90-percent coverage. Two out of three plans that accumulated the expenses for
all disabilities coinsured 80 percent, while two out of three providing benefits on
a per-disability basis reimbursed only 75 percent of the expense. However, under
23
To simplify the analysis, the deductible for a $ 4 ,000-a-year worker is
given in all tables for these six plans.
8
some plans, certain expenses incurred outside a hospital were reimbursed at a
lower percentage or, occasionally, not at all.
Seven plans, for example, paid
only 50 percent of physicians* charges for out-of-hospital psychiatric treatment
and one plan excluded this type of care from plan coverage.
Length and Application of Benefit Periods. Slightly over half the plans
(2 0) covered expenses incurred by active workers during a specified period of
time— usually a calendar year----for all disabilities, regardless of their number
(table 7).
If a disability continued from one calendar year into the next, an
additional deductible would have to be satisfied before benefits would be payable
for the second year, and a third deductible would be payable for the third year, etc.
To reduce the effect of arbitrary beginning and ending dates, all but 5 of the
16 plans using a calendar year provided that expenses incurred in the last 3 months
of each calendar year might be applied against both the deductible expenses for
that year and those for the next.
Somewhat fewer than half the plans (17) geared the length of the benefit
period to the length of each disability.
Most of these plans covered expenses
incurred during the 2 years following the onset of the disability (five plans) or
from the time that expenses exceeded the deductible (eight plans).
Although
only a single deductible was applicable, expenses incurred after 2 years were
not covered.
The length and application of benefit periods for active workers* de
pendents had about the same characteristics as those of the active workers be
cause all but four plans covering active workers also covered their dependents.
Retired workers and their dependents, however, were covered by only five plans.
All but one of these covered all expenses incurred in a calendar year as a
single benefit period to which a single deductible was applicable.
Maximum Benefits.~~—All but 3 of the 2 0 plans that accumulated expenses
for all disabilities during an entire benefit period (12 to 24 months) had no direct
limit on the benefits payable in each benefit period.
Instead, they set lifetime
limits of $ 10,000 (nine plans covering active workers), $ 7 ,5 0 0 (one plan), or
$ 5,000 (seven plans) (table 8). Ten of the 17 plans providing benefits for active
workers on a per-disability basis had no lifetime limit, and with one exception
paid a maximum of $5, 000 per disability.
The remainder had a lifetime limit
of $5 , 000 or $10, 000.
While reimbursable expenses of more than $ 5 ,0 0 0 per disability are
probably rarely incurred, lifetime limits of $ 5 ,0 0 0 or $ 10, 000— which for the
young worker may extend over 45 years of employment— may be restrictive in
a significant number of instances.
Two out of three plans had lifetime limits
of $ 10, 000 or less for active workers.
The restrictive effect of such limits,
however, is somewhat mitigated by a provision found in virtually all plans per
mitting the reinstatement of the maximum amount for those in good health ( i .e .,
nupon satisfactory evidence of insurability” ). This provision would seem to ex
clude workers with recurrent or chronic disabilities— in other words, those with
the greatest need for additional benefits.
Comprehensive Major Medical Plans
Six of the 43 major medical plans covering active workers were of the
comprehensive type; i . e . , they supplanted rather than supplemented basic health
benefit plans. 24 These plans ranged in coverage from 2,400 workers to 116, 000
24
After this analysis was completed, it was learned that one plan was con
verted from a comprehensive to a supplementary plan with basic benefits.
9
workers, and covered a total of about 200,000 workers.
Five of them also
covered the dependents of active workers, four covered retired workers, and
three covered their dependents.
The details of these six plans are presented
in the appendix on pages 16 and 17.
Benefits were more frequently forthcoming from these plans than from
the supplemental plans because the deductible was easier to satisfy.
The de
ductible was smaller— $25 or $50 rather than $100 or more 25— and, with one
exception, applied to the expenses of all disabilities incurred during a specified
period— usually a year or more— rather than just those incurred as a result of
a single disability, a limitation found in almost half the supplementary plans.
Moreover, no more than one deductible was payable by the insured each year;
nearly all the comprehensive plans accumulated all expenses in a calendar year
(or longer) into a single benefit period against which a single deductible was
applied.
While benefit periods of a year or longer, during which the expenses
of all disabilities were accumulated, were also found among the supplementary
plans, they were contained in only about half of the supplementary plans, com
pared with nearly all the comprehensive plans.
Three of the six plans reimbursed the active worker for 80 percent of
most covered health care expenses, and two plans, 75 percent.
However, a
higher percentage of specified hospital charges was paid by all six plans.
Two
paid the entire first $300 or $500 of all hospital charges, one paid the entire
room and board charges for a semiprivate room, and another paid the entire
bill up to $300 for all extra services.
All six plans limited the amount of daily
room and board benefits.
One plan, for example, limited it to the lowest rate
for a private room; another specified that it paid up to $20 a day, regardless
of the type of accommodation.
There were several other exceptions to the general rule that all pre
scribed personal health care expenses are reimbursed to the same extent re
gardless of how, where, why, or when they are incurred.
For example, the
four plans that had a maternity benefit for normal deliveries provided, as in
many basic plans, a fixed reimbursement allowance to cover all maternity ex
penses incurred in a normal delivery.
A smaller reimbursement was paid by
two plans, as it was by seven supplemental plans, for the expenses of mental and
nervous disorders incurred outside a hospital.
One plan excluded such out-ofhospital expenses even though they were fully covered when incurred in the hos
pital.
One plan— the largest of the six— paid 85 percent of surgical expenses
and of all covered expenses incurred in the hospital, but only 75 percent of
physician*s services (except surgery) and of covered out-of-hospital expenses.
In addition, this plan had an annual deductible of $50 for physician^ and outof-hospital expenses, compared with $25 for surgical and in-hospital expenses. 26
All but one plan had a lifetime maximum benefit per person, which
ranged between $10,000 and $20,000 for active workers and their dependents.
Two of these plans also provided that only half the lifetime limit could be used
in a single disability or benefit period, and one had a maximum for each disability
equal to 30 percent of the lifetime limit.
These limits were considerably higher
than those under the supplementary plans.
On the other hand, three of the four
plans covering retired Workers and their dependents had lower lifetime limits
than the lowest limit ($2, 500) provided by the supplementary plans.
5 One plan with a $25 deductible for active workers and their dependents
had a ^$100 deductible for retired workers and their dependents.
Only the $50 deductible was applicable to patients with expenses in
both areas.
10
Table
1.
Health and insurance plans studied in manufacturing and nonmanufacturing industries by number of w orkers
covered and type of bargaining unit, fall I 9 6 0 1
(W orkers in thousands)
A ll industries
W orkers covered
T otal
Single em ployer
M ultiemploye r
Plans
W orkers
Plans
W orkers
____ -
300
4, 9 3 3 .2
205
2, 8 0 6 .7
95
2, 126. 5
1, 000 and under 5, 000 w orkers
_______
5, 000 and under 10, 000 w orkers _______
1 0 ,0 0 0 and under 15, 000 w o r k e r s ____ _
15, 000 and under 2 5 ,0 0 0 w o r k e r s ______
2 5 ,0 0 0 and under 50, 000 w o r k e r s ______
50, 000 and under 100, 000 w orkers _____
100, 000 w orkers and o v e r _______________
137
59
34
26
28
5
11
3 5 1 .7
419. 1
387. 0
472. 0
928. 8
306. 6
2, 068. 0
102
39
20
17
17
4
6
262.
272.
224.
302.
532.
250.
962.
4
0
6
9
0
8
0
35
20
14
9
11
1
5
89. 3
147. 1
1 6 2 .4
169- 1
396. 8
55. 8
1, 106. 0
A ll plans studied ____________________
Manufacturing
Single e m ployer
Plans
W orkers
N onmanufac tur ing
M ultiem ployer
W orkers
Single employe r
M ultiem ployer
Plans
Plans
W orkers
Plans
W orkers
Plans
A ll plans studied __________________________
179
2, 6 5 0 .4
40
672. 5
26
156. 3
55
1 ,4 5 4 . 0
1, 000 and under 5, 000 w o r k e r s _________
5, 000 and under 10, 000 w orkers _____ _
1 0 ,0 0 0 and under 1 5 ,0 0 0 w orkers
1 5 ,0 0 0 and under 25, 000 w orkers _
2 5 ,0 0 0 and under 50, 000 w orkers _ ____
50, 000 and under 100, 000 w orkers _____
100, 000 w orkers and o v e r _______________
86
34
17
16
16
4
6
218. 6
2 4 0 .7
188. 6
287. 9
501. 8
250. 8
962. 0
14
11
8
1
3
1
2
39. 5
7 7 .6
90. 8
18. 0
109. 8
55. 8
281. 0
16
5
3
1
1
43. 8
31. 3
36. 0
15. 0
3 0 .2
21
9
6
8
8
49. 8
6 9 .5
71. 6
151. 1
287. 0
-
-
-
W orkers
3
-
825. 0
1
A ll coverage data reported in this study relate to the number of active w orkers (men and women) covered by the plans
which provide the specified benefit.
No attempt was made to determine the number of women w orkers, dependents, retired
w orkers, or dependents of retired w orkers covered by the plans.
NOTE:
This report is based on a study of 300 health and insurance plans under collective bargaining.
11
Table 2.
Health and insurance plans studied
by industry and groups eligible for m ajor m edical benefits, fall I960
A ll plans providing m ajor m edical benefits foi---A ll plans
Dependents
of active
workers
Active w orkers
Industry
Number Workers
Plans
W orkers
Dependents
of retired
w orkers
Retired
w orkers
Plans
W orkers
Plans
Plans
W orkers
l 39
W orkers
612. 0
9
183.7
8
162. 5
27
535. 8
7
166. 3
6
145. 1
A ll plans studied ----------------------------------------
300
4, 9 3 3 .2
43
M anufacturing_______________________
_
219
3 ,3 2 2 .9
30
Food and kindred products ---------------------Tobacco m anufactures __________________
Textile m ill products _ __________________
Apparel and other finished p r o d u c ts ____
Lum ber and wood products, except
fu rn itu re __________________________________
Furniture and fixtures _______________ _
Paper and allied products _______________
Printing, publishing, and allied
industries _____ ________ ________ ____
C hem icals and allied products _ _______
Petroleum refining and related
industries __ -------------------------------------------Rubber and m iscellaneou s plastics
products
__ ------------- ------------------------ _
Leather and leather p ro d u c ts -----------------Stone, clay, and glass products ________
P rim ary m etal industries _______________
Fabricated m etal products ______________
M achinery, except e le c t r i c a l____________
E lec trica l m achinery, equipment,
and supplies _________ __ ____________ _
Transportation equipment _______________
Instrum ents and related products
_____
M iscellaneous manufacturing
industries ______________________ _______
17
3
11
6
168.
24.
44.
395.
-
-
-
-
-
-
-
-
-
-
-
-
1
-
4. 5
-
1
-
4. 5
-
Nonman ufac tu r in g _____________________
Mining, crude petroleum , and natural
gas production
________ ________ ____
Transportation __ _________________________
Com m unications ________ ______________
U tilities: E lectric and g a s ______________
Retail and wholesale trade ______________
H otels and restaurants ___________________
Services __ ________________________________
Contract co n stru ctio n ____ _______________
M iscellaneou s nonmanufacturing
industries ________________________________
1
0
7
1
1, 185. 1
6 0 0 .7
_
3
5
13
44. 5
68. 1
49. 5
1
1 5
1
1. 5
6
10
2 1 .7
10 9 .4
1
1
4. 5
10. 0
1
1
4. 5
TO. 0
9 2 .7
5
63. 7
4
4 2 .5
2
3 7 .0
1
15. 8
8
11
10
21
11
22
108. 3
68. 7
76. 8
4 9 9 .2
98. 1
147. 0
1
4
2
4
1. 5
16. 8
13. 5
16. 7
1
4
2
4
1.5
16. 8
13. 5
16. 7 •
2
1
4. 8
4. 0
2
1
4. 8
4. 0
16
23
8
3 3 0 .2
902. 0
3 3 .4
3
7
1
267. 8
195. 2
9. 5
3
5
1
1
-
116. 0
-
1
-
116. 0
8
267. 8
151.5
9. 5
-
-
-
-
7
4 1 .4
-
-
-
-
-
-
81
1, 610. 3
13
584. 4
1 12
76. 2
2
1 7.4
2
1 7.4
4
22
2
11
12
194. 9
87 0 .7
38. 3
35. 2
6 0 .4
67. 1
140. 1
19 6 .4
2
1
-
13. 6
500. 0
13. 0
3. 0
2 1 .0
33. 8
1
11
-
3. 6
1 .8
4
13. 0
3. 0
2 1 .0
33. 8
1
1
_
15. 0
2 .4
5
9
15
1
7 .2
4
1
2
3
-
“
1
2
3
-
-
-
-
1
1
1 5 .0
2 .4
_
~
"
1 1 plan covering 1,800 w orkers in the m aritim e industry provided m ajor m edical benefits for only dependents of active
w orkers who receive free care in U .S . Public Health Service hospitals and out-patient facilities.
N OTE:
This report is based on a study of 300 health and insurance plans under collective bargaining.
Table 3. Number of plans studied with m ajor m edical
benefits for eligible groups, fall I960 and late 1955
Late 1955
Eligible groups
Fall 1960
A ll plans studied -------------------- -------
300
300
43
39
9
14
9
1
Groups eligible for m ajor
m edical benefits:
Active w orkers _ ------------------ __
Dependents of active worker s —
Retired w o r k e r s _________________
Dependents of retired
wo rke r s -------------------------------- __
8
1
NOTE: This report is based on a study of 300 health
and insurance plans under collective bargaining.
12
Table 4.
Method of financing 43 m ajor m edical benefit plans by groups eligible, fall I960
^ W ojdcers^inthousam b*^,
Dependents
of active
workers
Method of financing1
W orkers
Plans
W orkers
Plans
Dependents
of retired
workers
R etired w orkers
Active w orkers
W orkers
Plans
Plans
^ W orkers
A ll plans providing ben efit_________
43
1, 185. 1
39
6 1 2 .0
9
183. 7
8
162. 5
E m ployer o n ly -------------------- ------Jointly ________________________________
W orker o n ly -------- -----------------------------
2 12
226
5
6 8 6 .9
4 5 9 .3
3 8 .9
38
224
37
5 1 .3
4 3 2 .0
1 2 8 .7
45
3
1
1 4 8 .1
1 9 .8
1 5 .8
24
3
1
1 2 6 .9
1 9 .8
15. 8
1 If the worker contributed toward the cost of the health and insurance program as a whole (with the em ployer paying
the remaining co st), the benefit was cla ssified as jointly financed.
2 Includes 3 com prehensive plans.
3 Includes 1 com prehensive plan.
4 Includes 4 com prehensive plans.
N OTE:
This report is based on a study of 300 health and insurance plans under collective bargaining.
Table 5.
Type and amount of deductible in 37 supplementary m ajor m edical plans
by eligible groups, fall I960
(W orkers in thousands)
Amount of deductible 1
plans
Type of deductible
Num
ber
W ork
ers
$100
Plans
$150
W ork
ers
Plans
$200
W ork
ers
Plans
$300
Other 2
W ork
ers
Plans
W ork
ers
2
11. 5
Plans
W ork
ers
Active w orkers
All plans providing benefit _______________
37
979. 3
26
881. 3
2
34. 8
3
23. 7
C orridor deductible 3 ........ _ _ ._
_ . ...
Uniform amount _______________________
Amount dependent on earnings ......
Integrated deductible4
_ _.
Uniform amount _______________________
35
29
6
2
2
967. 8
917. 1
50. 7
11.5
1 1.5
26
24
2
8 8 1 .3
855. 8
25. 5
2
1
1
'
34. 8
31. 8
3. 0
-
3
2
1
-
23. 7
19. 5
4. 2
-
-
-
-
-
-
-
4
28. 0
4
2
2
-
28. 0
10. 0
18. 0
-
-
-
2
2
1 1 .5
1 1 .5
1
1 .5
4
28. 0
_
4
2
2
2 8 .0
10. 0
18. 0
-
-
"
-
-
Dependents of active w orkers
A ll plans providing benefit _______________
34
4 2 7 .4
24
3 3 9 .4
2
34. 8
3
23. 7
C orridor deductible 3 ______________________
Uniform amount _______________________
Amount dependent on earnings ............
Integrated deductible 4 _____________________
Uniform amount _______ ______________
33
27
6
1
1
425. 9
375. 2
50. 7
1.5
1. 5
24
22
2
33 9 .4
313. 9
25. 5
2
1
1
-
34. 8
31. 8
3. 0
3
2
1
-
23. 7
19. 5
4. 2
All plans providing benefit _______________
5
40. 1
4
25. 1
-
-
-
-
-
1
1 5 .0
C orridor deductible 3 ______________________
Uniform amount . . .
. .. . .
Amount dependent on earnings _______
5
4
1
40. 1
25. 1
15. 0
4
4
25. 1
25. 1
_
_
_
_
_
_
1
15. 0
-
-
-
-
-
-
-
-
1
15. 0
-
-
-
-
-
-
_
-
-
-
-
1
1
1 .5
1 .5
Retired w orkers and their dependents
^
____
The deductible for 6 plans, which was based on the w ork e r's earnings, was computed for a $ 4 , 0 0 0 -a -y e a r w orker.
2 Includes plans with deductible amounts of $ 50, $ 6 2 .5 0 , $75, and $120.
3 Uninsured area between basic and m ajor m edical benefits.
4 Subject to reduction by amount of basic benefits.
1
N OTE:
This report is based on a study of 300 health and insurance plans under collective bargaining.
13
Table 6.
Length and application of accumulation period and deductible amount in 3 7 supplementary
m a jo r m edical plans by eligible groups, fall I960
(W orkers in thousands)
Application of accumulation period and deductible am ou nt1A ll plans
A ll disabilities
Accumulation period
Total
Plans
$10 0
O th er2
$2 0 0
Plans
W orkers
Plans
W orkers
Plans
W orkers
979- 3
19
646. 4
17
621.9
1
15
2
1
1
6 1 2 .3
9 .6
3. 6
_
W orkers
Plans
W orkers
9. 5
1
15. 0
1
15. 0
Active workers
All plans providing benefits-----Calendar y e a r --------------------------Specified number of m onths---3 m onths------------------------------12 months-----------------------------2 4 months-----------------------------Other-------------------------------------
37
3 16
21
4
6
48
53
3
0
7
4
6
3
6
3
2
1
62 7. 3
19. 1
427. 4
18
130. 9
16
1 0 6 .4
8
6
7
4
2
3
15
3
2
1
1 1 1 .8
19. 1
3. 1
6. 0
14
2
1
1
96. 8
9. 6
3. 6
6. 0
627.
352.
135.
81.
94.
40.
13. 1
6. 0
_
-
-
1
1
9. 5
9. 5
-
-
-
-
6.0
-
-
-
1
9- 5
Dependents of active
workers
All plans providing benefits------
34
Calendar y e a r ---------------------------Specified number of months-----3 m onths --------------------------------12 months -------------------------------2 4 months -------------------------------Other ----------------------------------------
3 15
19
3
6
47
53
111.
315.
125.
81.
68.
40.
1
1
9. 5
9. 5
-
-
1
15. 0
1
15. 0
-
Retired workers and
their dependents
A ll plans providing benefits------
5
40. 1
4
24. 3
3
9. 3
-
-
1
15. 0
Calendar y e a r ----------------------------Specified number of months--------12 months -------------------------------------------
*4
1
1
24. 3
15. 8
15. 8
4
24. 3
3
9.3
_
_
1
15. 0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Application of accumulation period and deductible am ou nt1------ Continued
Each disability
Total
$1 00
Plans W orkers Plans
$15 0
W orkers Plans
$2 00
W orkers Plans
$30 0 7
W orkers Plans
Other 2
W orkers Plans
W orkers
Active workers
A ll plans providing ben efits ---------
18
Calendar y e a r ----------------------------------------Specified number of m onths ------3 m onths ----------------------------------------------
-
3 3 2 .9
_
91
259 . 4
_
2
_
18
4
4
8
2
3 3 2 .9
135. 7
68. 3
94. 6
34. 3
A ll plans providing b en efits ---------
16
296. 5
8
Calendar year ----------------------------Specified number of m onths-----3 m onths --------------------------------12 m on th s-------------------------------24 m on th s-------------------------------Other ----------------------------------------
_
16
3
4
7
2
_
296. 5
125. 7
68. 3
68. 2
34. 3
_
8
1
2
A ll plans providing ben efits------
1
15. 8
1
15 . 8
-
Calendar year ----------------------------Specific number of m o n th s------12 m on th s----------------------------- ~
1
1
_
15. 8
15. 8
_
1
1
15 . 8
15 . 8
-
12 m on th s-------------------------------2 4 m on th s--------------------------------
Othe r
------------------------------------------------------
9t
6
259 .
120 .
50.
88.
-
-
1
2
4
0
8
6
34. 8
_
2
_
2
1
1
34. 8
3. 0
31.8
2
1
1
2
34. 8
2
14. 2
_
2
.
11. 5
_
2
-
14 .2
4.2
10. 0
-
2
_
-
11 . 5
11 . 5
-
-
-
-
3
_
13. 0
_
13. 0
-
-
3
1
1
1
1
1. 5
3
13. 0
1
1
_
_
-
1. 5
1. 5
3
13. 0
_
7. 5
3.0
2. 5
Dependents of active
w orkers
5
-
233
.
0
_
233 . 9
120 . 0
50 . 8
62 . 2
-
_
2
_
1
1
.
34. 8
_
3. 0
31.8
_
2
1
1
_
14 .2
.
14 .2
4.2
10. 0
_
-
_
-
_
1
1
1
7. 5
3. 0
2. 5
Retired w orkers and
their dependents
_
-
_
"
-
-
-
_
_
_
_
_
_
_
-
-
-
-
-
-
_
_
-
-
.
-
1 See footnote 1, table 5.
2 See footnote 2, table 5.
Includes 1 plan on a policy year b asis.
12 plans perm itted unreim bursed expenses incurred during last quarter of
previous year to be counted toward deductible in current year.
4 A ll plans required total disability.
* 1 plan provided a 2-m onth accumulation period and 2 plans, a 6-m onth accumulation period.
3
plans permitted unreim bursed expenses incurred in last quarter of previous year to be counted toward deductible
in current year.
7 Integrated deductible.
NOTE:
This report is based on a study of 300 health and insurance plans under collective bargaining
Table 7.
Length and application of benefit period and deductible amount in 37 supplementary m ajor m edical plans
by eligible groups, fall I960
(W orkers in thousands)
Application of benefit period and deductible am ount1
Benefit period
A ll disabilities
A ll plans
Total
Plans
$200
$100
Each disability
Other 2
Total
$100
$150
$200
$300 3
Other 2
W ork
W ork
W ork
W ork
W ork
W ork
W ork
W ork
W ork
W ork
W ork
Plans
Plans
Plans
Plans
Plans
Plans
Plans
Plans
Plans
Plans
ers
ers
ers
ers
ers
ers
ers
ers
ers
ers
ers
Active workers
A ll plans providing b en efit-----
37
979. 3
20
648. 9
17
621. 9
1
9. 5
2
17. 5
17
330. 4
9
Calendar y e a r ________________ _
Specified number of months__
12 months _________ _____ ___
From incurrence of
expense in excess of
deductible--------------------From start of
disab ility---------------------24 months ------ --------------------From incurrence of
expense in excess of
deductible ------------------From start of
disab ility ------ ------ ---------
4 17
20
6
629. 8
349. 5
81. 4
17
3
2
629. 8
19. 1
13. 1
15
2
1
612. 3
9. 6
3. 6
_
1
1
_
17. 5
-
_
17
4
_
330. 4
68. 3
_
9. 5
9. 5
2
-
9. 5
-
_
-
-
-
-
4
36. 9
1
3. 6
2
14
44. 5
268. 1
1
1
9. 5
6. 0
1
3. 6
_
_
1
6. 0
1
-
1
6. 0
-
_
58
121. 1
5 »6 6
147. 0
1
6. 0
A ll plans providing ben efit-----
34
427. 4
19
133. 4
16
106. 4
Calendar year — ..........................
Specified number of months —
12 m onth s............ ......................
From incurrence of
expense in excess of
deductible ---------- --------From start of
disability --------------------24 months __________________
From incurrence of
expense in excess of
deductible --------------- —
From start of
disab ility ---------—......... —
4 16
18
6
114. 3
313. 1
81. 4
16
3
2
114. 3
19. 1
13. 1
14
2
1
96. 8
9. 6
3. 6
4
36. 9
1
3. 6
2
12
44. 5
231. 7
1
1
9. 5
6. 0
1
6. 0
_
9
2
259. 4
_
259. 4
50. 8
3
33. 3
1
15. 8
1
13
35. 0
262. 1
1
7
35. 0
208. 6
8
121. 1
4
73. 6
5
141. 0
3
135. 0
294. 0
8
233. 0
2
34. 8
2
14. 2
2
11. 5
2
10. 5
_
2
-
_
34. 8
-
_
2
1
_
14. 2
10. 0
_
2
-
_
11. 5
-
_
2
1
_
10. 5
7. 5
1
10. 0
1
7. 5
2
_
34. 8
_
_
_
_
_
_
1
4. 2
2
11. 5
1
3. 0
1
3. 0
10. 5
31. 8
1
4. 2
2
11. 5
i
3. 0
-
-
-
-
2
34. 8
2
14. 2
Dependents of active w orkers
1
9. 5
2
17. 5
15
_
_
9. 5
9. 5
17. 5
-
_
1
1
2
-
9. 5
-
-
.
-
-
_
1
3. 6
_
.
1
6. 0
1
-
1
6. 0
_
_
76
84. 7
6* 5 6
147. 0
A ll plans providing b e n e fit-----
5
40. 1
4
24. 3
3
9. 3
Calendar y e a r -------------- -----------Specified number of m onth s__
12 months from date of
incurrence of expense
in excess of deductible —
*14
1
24. 3
15. 8
4
3
-
9. 3
-
_
-
_
-
24. 3
-
1
15. 8
-
-
-
-
-
_
_
_
15
4
294. 0
68. 3
8
2
3
33. 3
1
15. 8
1
11
35. 0
225. 7
1
6
35. 0
182. 2
6
84. 7
3
5
141. 0
3
_
_
2
-
34. 8
-
_
2
.
34. 8
47. 2
1
135. 0
1
_
233. 0
50. 8
_
2
1
14. 2
10. 0
1
10. 0
1
1. 5
2
_
_
_
1
_
1. 5
-
2
1
10. 5
7. 5
1
7. 5
1
3. 0
_
.
1
4. 2
31. 8
1
3. 0
_
_
-
_
_
-
-
-
1
1. 5
4. 2
1
1. 5
_
_
_
1
3. 0
_
_
_
-
-
-
_
_
-
-
-
Retired w orkers and
their dependents
1
15. 0
1
15. 0
-
_
-
1
-
-
-
-
15. 8 ___ 1 _
_
_
15. 8
_
1
15. 8
1
15. 8
-
1
15. 8
i
15. 8
-
-
1 See footnote 1, table 5.
2 See footnote 2, table 5.
3 Integrated deductible.
4 Includes 1 plan on a policy year basis.
12 plans permitted unreimbursed expenses incurred during last quarter of year to be carried over into first quarter of next
year, and 1 plan allowed carryover of only 2 months.
5 4 plans required total disability.
6 1 plan specified a benefit period of 12 months if insured was not totally disabled.
7 3 plans required total disability.
8 3 plans perm itted unreimbursed expenses incurred in last quarter of year to be carried over to the firs t quarter of next year.
N OTE:
This report is based on a study of 300 health and insurance plans under collective bargaining.
T a b le 8.
M a xim u m b en efits payable a n d 'len g th of b en efit p e r io d in 37 su p p le m en ta r y m a jo r m e d ic a l p lan s
by e lig ib le g r o u p s , f a ll I9 6 0
(W o r k e r s in th ou san d s)
Application of benefit period
Length o f b en efit p eriod
12 months
Total
Maximum amount of benefit payable
A ll
disabilities
Calendar
year
Each
disability
Plans
W ork
ers
Plans
W ork
ers
Plans
W orker s
37
9 7 9 .3
20
648. 9
17
3 3 0 .4
3
28. 3
9 .5
15 .0
12 0 .0
133. 0
3 .0
5 8 4 .2
2. 0
84. 3
1
1
1
2. 5
9. 5
1 5 .0
2
25. 8
1
1
1
9
1
10
1
10
-
1
9
1
3
34
3
1
1
1
7
1
From
incurrence of
expense in
excess of
deductible
W orkPlans
ers
Plans
W orkers
17
629. 8
4
3 6 .9
2. 5
2
25. 8
24 months
F rom start
of disability
Plans
W orkers
F rom
incurrence of
expense in
excess of
deductible
W orkPlans
er s
From start
of disability
Plans
W orkers
6
147. 0
Active workers
All plans providing benefit
Per benefit period Per disability
$ 5 ,0 0 0
10,000
10,000
$ 5 ,0 0 0
5 ,0 0 0
1 0,000
Per lifetime
$ 1 0 ,0 0 0
15,000
2 0,000
10,000
-
-
-
-
-
7
1
9
537. 5
2. 0
82. 4
4 2 7 .4
19
1
1
1
1
10
28. 3
9. 5
1 5.0
12 0 .0
96. 6
3 .0
68. 7
2. 0
84. 3
. . _ _
5
Per lifetime
$ 2 , 500
3 3, 000
4 5, 000
2
1
2
$5,0 0 0
7, 500
10,000
-
-
1
1
2
44. 5
9. 5
-
_
_
-
_
-
-
-
_
-
2 1
-
-
-
-
-
-
1
_
-
1
15. 0
_
-
-
120. 0
1 33.0
3. 0
46. 7
120.0
18. 0
3. 0
-
-
-
-
-
-
-
-
-
-
-
-
6
-
-
-
-
-
-
-
-
1
7. 5
1
4. 2
_
_
_
_
.
1
1 .9
133.4
15
294. 0
1 16
114. 3
2. 5
9. 5
15. 0
2
25. 8
1
2. 5
-
1
7
1
-
121. 1
-
7
1
7
-
8
537. 5
2. 0
72. 8
-
1
35. 0
115. 0
3
1
-
-
-
-
1
3 .6
-
-
1
1 .9
1
6. 0
4
3 6 .9
2
44. 5
6
84. 7
6
147.0
2
25. 8
1
9. 5
Dependents of active workers
All plans providing b e n e fit ______________________
Per benefit period Per disability
$5 ,0 0 0
1 0,000
1 0,000
$ 5 ,0 0 0
5 ,0 0 0
1 0,000
Per lifetime
$10,000
15,000
20 ,0 0 0
10,000
-
$ 5 ,0 0 0
7, 500
10,000
-
-
9
-
-
_
6
1
-
-
-
-
-
-
-
1
15. 0
-
-
-
-
-
_
_
-
-
-
-
-
_
-
-
4
78. 6
_
_
_
21
3
1
1
4. 2
_
_
_
_
1.9
1
6. 0
_
-
9
22. 0
2. 0
8 2 .4
1
40. 1
4
24. 3
1
4. 8
15. 0
20. 3
2
1
1
4. 8
15. 0
4. 5
-
3
120. 0
9 6 .6
-
-
-
-
-
-
-
22. 0
2. 0
72. 8
-
1.9
6
1
7
1
3. 6
15. 8
4
24. 3
1
15. 8
_
2
1
1
4. 8
15. 0
4. 5
_
3 .0
46. 7
_
-
1
-
-
-
-
7. 5
_
1
-
-
35. 0
-
-
-
-
1
-
_
_
-
120. 0
18. 0
3. 0
_
Retired w orkers and their dependents
All plans providing benefit
Per benefit period
.
.
Per disability
-
"
1
15. 8
1
_
15. 8
-
_
_
_
“
-
-
-
_
-
1 In clu d es 1 plan on a p olicy y e a r b a s is .
2 If w o r k e r or dependent is not totally d isa b led , the b en efit p e r io d is 12 m o n th s.
3 T h is am ou nt is the d iffer en ce betw een the unused b alan ce of the life tim e m a x im u m a s an a c tiv e e m p lo y e e , or $ 3 , 0 0 0 , w h ic h e v e r is l e s s .
In ad dition , a fu rth e r
red u ction ta k e s p la c e at age 70; if the unused b alan ce of the r e t i r e e 's or h is d e p e n d e n t's unu sed b a la n ce is m o r e than $ 2 , 5 0 0 — this am ou nt then b e c o m e s the new lim it.
4 1 plan p ro v id e d that this am ount is the d iffer en ce betw een the u nused b a la n c e of the life tim e m a x im u m a s an a c tiv e w o r k e r or $ 5 , 0 0 0 , w h ic h e v e r is l e s s .
The
r e t ir e e and h is d epen dents a r e gu aranteed a m in im u m life tim e m a x im u m o f $ 2 , 500 r e g a r d le s s of the am ou nt o f b e n e fits u se d as an a c tiv e e m p lo y e e .
NOTE:
T h is
r e p o r t is
b ased on a study of 300 health and in su ra n ce
p lans u nd er c o lle c t iv e b a r g a in in g .
16
APPENDIX: DIGEST OF 6 COMPREHENSIVE MAJOR MEDICAL PLANS
Industry
Number
of
active
workers
covered
Transportation
equipment 5
5 8 ,000
Groups covered and financing
Active
Workers Dependents
Company Worker
Deductible
Retired
Workers Dependents
No benefit
Type of expense
subject to
deductible
A ll except
hospital
Ac cumulation
period and its
application
Amount
Worker
$25
2 years per
disability; total
disability
required
Dependent
$50
-----
Benefit
period
2 years; total
disability
required
Active workers
Petroleum
refining and
related
industries
21 ,000
Company
(6)
Company
(6)
A ll except
hospital room
and board
$50
A ll
$50
3 consecutive
months; all
disabilities
Calendar
year
A ll except
hospital and
surgical
$60
60 days per
calendar year;
all disabilities
Hospital and
surgical:
P er disability
3 consecutive
months; all
disabilities
Calendar
year
Retiree workers
Machinery,
except
electrical
4, 000
Joiiltly
Com lany
Other
Calendar
year
Adive workers and dependents
E lectrical
machinery,
equipment,
and supplies
116,000
Joiiltly
Comjiany
A ll
Hospital and
surgical— $ 2 5;
other— $5 0;
maximum
aggregate—$50
Calendar year;
all disabilities
Calendar
year
Retired workers and dependents
Hospital and
su rgical(other
expenses ex
cluded from
plan coverage)
$25
A ll except
hospital and
surgical
$25
Calendar year;
all disabilities
Calendar
year
Active workers and dependents
Construction
2 ,4 0 0
Com pany
Com pany
Calendar year;
all disabilities
Calendar
year
Retired workers and dependents
A ll
U tilities:
Electric
and gas
4, 200
Joiiltly
No benefit
A ll except
hospital and
surgical
$100
$25 ($4 00 for
maternity cases)
Calendar year;
all disabilities
Calendar
year
365 days; per
disability
P er disability
1 Except where indicated, all provisions apply to each person in all groups covered.
2 General reimbursement applies to charges not specified; " A l l " is used where all hospital charges (room and board and extra services) are
reimbursed to the extent specified.
3 Limitations that may be applicable to other than psychiatric care are not described.
4 Not subject to deductible or coinsurance; a higher allowance is generally provided for a caesarean section; and regular benefits, subject to
deductible and coinsurance, are usually payable for more complicated cases.
17
UNDER COLLECTIVE BARGAINING, SEPTEMBER I9601
Coinsurance
Special r eim
General
bursement for.
reim burse
specified hospital
ment
charges 2
Maximum benefit
Restrictions on
hospital room
and board
benefits
80%
Extra services:
Worker— 100% of
first $300; 80% of
remainder; depend
ents— 100% of
first $100; 80% of
remainder
Maximum bene
fit— $ 1 6 a day
80%
Semiprivate
room: 100%
Maximum
private room
benefit—
semiprivate
rate plus $5
Per
benefit
period
Per
disability
Per
lifetime
Reinstatement
Limitations on
psychiatric
care 3
Normal
maternity
benefits *
Industry
No provision
Limited to
expenses in
curred during
hospital
confinement
$ 150
Transportation
equipment 5
$20, 000
No provision
One lifetime
benefit not to
exceed 2 months
in hospital and,
if confinement
exceeded 6 days,
1 month ou t-o f
hospital
None
Petroleum
refining and
related
industries
$5 , 000
No provision
One lifetime
benefit not to
exceed 31 days;
hospital
confinement of
at least 7 days
required to
qualify for
benefits
$225
Machinery,
except
electrical
$150
E lectrical
machinery,
equipment,
and supplies
$7 , 500
Active workers
$1 0, 000
/O u t-o f-h o spital care—75%7
'
"
Retired workers
80%
No special
reimbursement
Limited to
31 days and to
3 -bed room
rate plus $ 5 7
75%
A ll: 100% of
first $300
Maximum
private room
benefit $20
Active workers and dependents
$1 0, 000
No limitation
If during a
6-month period,
the insured did
not use or
receive $ 25 or
more of covered
services
R etired workers and dependents
-
-
$ 2 ,0 0 0
No provision
Active wor ers and dependents
75%
A ll: 100% of
first $225; 85%
of remainder
Maximum
private room
benefit— s emi private rate
$7 , 500
$1 5, 000
On evidence of
insurability
If not totally
disabled:
Coinsurance 50%
No provision
No limitations
On evidence of
insurability
No limitation
$75
No limitation
None
/Surgical eexpenses included
with hospital expenses?
Retired workers and dependents
None
A ll: 100% of
first $225; 85%
of remainder
Maximum
private room
benefit— s emi private rate
15 years' service and over
j
-
| 8 $ 1,500
10 to 15 ye a rs' service
/Surgical expenses included
with hospital expenses?
-
-
8 $ 1,000
Active workers and dependents
70%
A ll: 90% of
first $ 1, 000;
80% of
remainder
/Surgical—-80%7
Limited to w ard9
charges, but not
less than $ 14. 50
a day for worker
and $ 1 2 .5 0 for
dependents
$3 , 000
$1 0, 000
Construction
Retired workers and dependents
75%
Ward 9 room
and board:
90%
Minimum of
$ 14.50 a day
for worker
and $12. 50 for
dependents
80%
A ll: 100% of
first $500
Limited to
lowest private
room rate
$ 1 ,5 0 0
“
$ 10,000
No provision
On evidence of
insurability
U tilities:
Electric
and gas
5 A fter this analysis was completed, it was learned that this plan was converted from a comprehensive to a supplementary plan with basic
benefits.
6 No benefit provided; most dependents are covered by basic hospital, surgical, and medical benefits
paid for by the worker.
7 This plan also lim its in-hospital m edical care to $6 per day and does not cover out-of-hospital nursing care.
8 Total payable for all expenses of retiree and wife.
9 Room with 3 or m ore beds.
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