REPORT OF THE BOARD OF TRUSTEES
B of T Report 4 - I-05
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Subject:
Health Insurance for Medical Students
Presented by:
Duane M. Cady, MD, Chair
Resolution 617, sponsored by the Medical Student Section and adopted at the 2005 Annual
Meeting, reads:
RESOLVED, That our American Medical Association work with the AMA Insurance
Agency to investigate the feasibility of developing and marketing a health insurance plan
that will be tailored to medical students, affordable, continuous, hassle-free, and more
comprehensive than a catastrophic (major medical) plan, and report back to 2005 Interim
Meeting.
This informational report describes the efforts undertaken in response to the resolution.
Background
The AMA Insurance Agency was instrumental in the development of the MedPLUS Advantage
program for medical students and residents, crafted in response to a HOD resolution. Comprised of
disability income, life, and medical coverage, the plans were introduced in 1993-1994 and provided
on a mandatory basis through medical schools. Unfortunately, the late 1990s saw a dramatic
upswing in claims experience in a highly volatile medical insurance market. Not only did the thencarrier withdraw from the program, but it also was impossible to find an insurer willing to provide
health insurance to the medical student community on a country-wide basis. The intervening years
have seen a softening of the marketplace in terms of insurance company willingness to explore
offering a national group health insurance plan to medical students, as well as residents.
Discussion
AMA Insurance Agency concurs that the time is right to investigate the feasibility of providing a
group health insurance program to medical students and residents on a nationwide basis, with two
possible options:
1. A health plan could be developed as part of the existing AMA-sponsored MedPLUS
Advantage (MPA) program. This program currently consists of disability income insurance,
with term life and travel assistance available as optional features. The health insurance
component would then be marketed through the medical schools/residency programs on a
mandatory, guaranteed-issue (minimal or no underwriting required) basis; or
2. The Agency will investigate whether a “stand-alone” product should be available for students
and residents.
B of T Rep. 4 - I-05 -- page 2
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As directed by the resolution, AMA Insurance Agency began investigation into the feasibility of
developing and marketing a program of health insurance to medical students and residents. A
request for proposal has been developed for dissemination to a number of recognized insurance
companies. It is difficult to predict the ultimate degree of interest at this point. However, AMA
name recognition, coupled with the Agency’s presence in the medical school marketplace via
MPA, may help to spur receptivity to provide a quote by health insurance carriers.
The process includes several steps:
1. Request for proposal development and mailing to identified insurance underwriters, using
AMA-required criteria;
2. Evaluation of responses for rate/benefit competitiveness;
3. External actuarial analysis of the submitted bids;
4. Due diligence review by the Agency of the responding insurance companies;
5. Contract negotiation; and
6. Market launch.
Steps 1-4 are anticipated for completion by the end of October 2005, which will provide the
Agency the ability to gauge marketplace interest and determine the feasibility of developing and
marketing a health insurance plan for medical students and residents that meets the conditions set
forth in Resolution 617.
If the requirements for a plan are met that satisfy the directives of Resolution 617, the Agency will
then undertake Steps 5-6 noted above.
Staff cost is estimated to be at least $14,513 to investigate the feasibility of developing and
marketing a health insurance plan for medical students and residents. It is possible that the cost
could fall in the range of $50,000 to $75,000 for staff time, travel, and legal expenses, depending
on the duration and potential results of the investigation.
Conclusion
Through its wholly owned subsidiary, AMA Insurance Agency, Inc., the AMA has negotiated
several comprehensive and competitively-priced insurance programs for its members, including the
current disability income/life plans for students. Given this, the primary risk of failing to offer
student/resident insurance coverage is missing an opportunity to use our market power on behalf of
our student AMA Members. While securing coverage that meets the parameters outlined--and with
a carrier which meets AMA-prescribed industry ratings of “excellent” or better--is not guaranteed
at this time, the development of such a program will continue to be high priority activity in the
coming months.