CEO high on products for underserved consumers

Richard A. Collins once spent his days crisscrossing the world's oceans and seas. As a merchant mariner for nine years, he navigated cargo ships hauling everything from oil and ammunition to bananas.

Collins, 50, now works in much different environs. His workplace, Golden Rule Insurance Co., sits on the lip of I-465. His office lacks even an outside window. A model ship and photos of ships near his desk serve as reminders of his past.

Although the threat from surging waves is gone, the chief executive of health insurer Golden Rule still faces formidable challenges, from powerful competitors to vocal critics who say health insurance is unaffordable and unattainable for too many Americans.

So how did a mariner become an insurance guy?

"When my second child was born, I promised my wife I would try to find a stable career," said Collins, who typically spent six months a year at sea. He was living in Connecticut at the time, so he sought employment in his state's most famous industry: insurance.

He has worked his way up from an entry-level underwriter to a CEO.
His company, a subsidiary of Minnesota-based health insurance giant UnitedHealth Group, sells health insurance for individuals, a market segment that is growing as fewer Americans are getting group coverage through their employers.

Golden Rule has a big potential market. The company said 17 million Americans buy their own health insurance. More than 46 million Americans are uninsured.
Collins, who recently marked his first year as Golden Rule's CEO, called his company's growth "robust." The company employs about 650 people in Indiana, having added about 40 positions in the past two years with 30 still open.

Indianapolis-based Golden Rule has more than 500,000 members and expects to have about $1 billion in revenue this year. Golden Rule had about 400,000 members in 2003 when it was purchased by UnitedHealth, said Carl McDonald, an analyst with CIBC World Markets.
Individual focus

Large health insurance companies, including UnitedHealth and Indianapolis-based WellPoint, are beefing up their offerings of policies designed for individuals, McDonald said. For instance, WellPoint has designed an aggressively marketed policy called "Tonik" designed for young adults, a group that often goes without insurance.
"It's a way for plans to try to get at what's a higher-growth market," he said. "It's a way for companies to say they're doing something about the uninsured problem."
McDonald said UnitedHealth was interested in Golden Rule because it was a pioneer in developing high-deductible health plans where consumers make more purchasing decisions for their care through personal health savings accounts, or HSAs. About 41 percent of Golden Rule's customers are covered by HSAs.

Golden Rule's line of business, however, is not without controversy.

A new report from the Commonwealth Fund, a New York research foundation that aims for a more efficient health-care system, finds that many families in search of health insurance find individual coverage unaffordable or unobtainable.

The report said 43 percent of adults with individual coverage spend at least 5 percent or more of income on premiums. In contrast, just 14 percent of those with employer-sponsored coverage spend that much.
Dollars and cents

Large employers providing group insurance typically pay 70 percent to 80 percent of the premiums for their employees, McDonald said. Those buying individual coverage get no such help.

At Golden Rule, a nonsmoking family of a husband and wife with two children enrolling in the "Co-Pay Select" plan could choose a $500 deductible and pay $704 in monthly premiums, a total of $8,448 a year. In addition to the deductible, the family would be responsible for paying 20 percent of its medical costs until it had $10,000 in total bills, at which point Golden Rule would pay 100 percent.

That same family covered by the company's high-deductible "HSA 100" plan would have to pay the first $5,250 in medical expenses, with Golden Rule covering all expenses after that. Monthly premiums would be $259, or $3,108 a year.

Access to coverage was another issue, according to the Commonwealth Fund report. Of those who sought individual coverage, 21 percent were turned down or charged more because of pre-existing medical conditions, or had a certain health problem excluded from their coverage.

Collins said about 75 percent of those who apply for policies at Golden Rule end up taking coverage, although he declined to say how often those customers were charged more or had certain health problems excluded because of pre-existing conditions.
"We try to make an offer to absolutely as many people as we can," he said.

O Captain! Richard A. Collins has been steering Golden Rule Insurance to new growth as its CEO since August 2005. The former merchant mariner sits in his Northwestside office that's adorned with reminders of his earlier career. - Steve Healey / The Star

_________________________________________

By Daniel Lee
daniel.lee@indystar.com

Call Star reporter Daniel Lee at (317) 444-6311.

Copyright 2006 IndyStar.com. All rights reserved