More than 301,000 Iowans — an estimated 14 percent of the state’s adults and 7 percent of its children — have no health insurance coverage. Though several public programs are offered to provide low- or no-cost coverage, few private insurers have ventured into the low-cost health insurance arena outside of catastrophic policies. In 2005, though, a Milwaukee-based company will begin marketing a plan in Iowa it says will make health insurance available to many families that previously could not have afforded it.

Assurant Health, a subsidiary of publicly traded Assurant Inc., will begin offering its RightStart plans in Iowa Jan. 1. The plans, which cap annual benefits at $100,000 or $250,000, offer premiums that are 25 to 49 percent lower than Assurant’s previous least-costly coverage, the company said.

“We’ve been in the individual medical (market) for decades, but this is the first time we’ve introduced a plan like this,” said Scott Krienke, Assurant’s vice president for individual medical product management. “Almost all of the plans we marketed before RightStart were traditional major medical plans.” The company’s policies are issued and underwritten by Fortis Insurance Co., John Alden Life Insurance Co. and Fortis Benefits Insurance Co.

Assurant’s research of the uninsured population indicated there was a market of insurable adults who would opt for coverage if lower-cost policies were available. According to a separate study by The Henry J. Kaiser Family Foundation, four out of five uninsured U.S. citizens are in families with at least one working member.

For a family of four with 32-year-old parents, Assurant’s monthly premium for $100,000 in annual coverage would be $112.40; a policy covering up to $250,000 in expenses per year would cost $149.54 a month.

The major difference between the low-cost and traditional plans is that both the annual and lifetime benefits are capped, with a lifetime $2 million limit on benefits. Otherwise, “the coverage itself is very similar to our major medical plan,” Krienke said. “It’s the caps that drive the primary premium difference.”

Iowa is one of the 43 states in which the company plans to introduce the coverage. About half its RightStart customers in the 22 states in which it has already launched the plan have opted for the $100,000 policies, while the rest have chosen $250,000 in coverage, Krienke said. Customers can also pay higher premiums to receive service with a $25 co-payment; otherwise they must meet a $500, $1,000 or $2,500 deductible before coverage begins.

“What we’re finding is that people are buying the higher deductible, and then they’re buying accident coverage to cover the difference,” Krienke said.

A discounted individual health policy could potentially provide “a really good safety net for people who fall through the cracks,” said Beth Jones, project coordinator for Covering Kids and Families in Iowa. The state program, funded by the Robert Wood Johnson Foundation, was established to reduce the number of uninsured Iowa families.

Things families should consider in choosing coverage are whether they can pay the policy’s out-of-pocket costs — which could total up to $8,500 for Assurant’s lowest-premium family coverage — and to know what type of pre-existing conditions would be excluded from coverage, she said.

Given that inability to pay health-care costs is the No. 1 cause of personal bankruptcy filings in the state, people should be particularly concerned about what they would do if they reach a plan’s annual or lifetime cap on coverage, Jones said..

In Assurant’s view, “$100,000 of coverage is better than nothing,” Krienke said. “And someone is much more likely to have a $20,000 or a $50,000 claim than a $200,000 claim Previously, we didn’t have a product that these clients were willing to purchase, because the price was too high.”