Well Wishes: Highmark's Gift Cards
Can Cover Insurance, Medical Fees

Wall Street Journal

By KRIS MAHER
November 6, 2007

Wondering what to give your aunt this Christmas? How about paying for her next trip to the chiropractor?

Pittsburgh health insurer Highmark Inc. is selling a Healthcare Visa Gift Card from $25 to $5,000 to cover prescription co-payments, elective surgery, contact lenses and gym membership.

The cards can be used only at providers or merchants that Visa categorizes as health related, including physician's offices, pharmacies and health clubs.

The cards aren't available at grocery or retail stores -- they can only be purchased online or by calling a toll-free number.

Highmark believes that the card fills a need for many people who want to help others -- from college students to baby boomers -- with various expensive health-related needs, but feel uncomfortable about offering cash.

"There's something about a gift card," said Kim Bellard, vice president of e-marketing and customer relations at the insurer, which is marketing the card as a stocking stuffer or as a year-round gift. "They view it as a present, not as charity."

In the case of college students, an added appeal is that students would have to use the card for health expenses, rather than using the funds to buy clothes or an iPod, for instance. "You would give this card if you want to make sure that they have funds for health-related purchases," Mr. Bellard said.

The popularity of gift cards has soared in recent years, as restaurants and specialty stores have begun selling them at supermarkets and other high-traffic retail outlets.

During last year's holiday shopping season, gift-card sales rose by 32% to $25 billion, according to the National Retail Federation, an industry group located in Washington.

Some health-care experts expect the card to have only limited appeal.

"I assume there will be a demand for it, but it's a niche product," said William Custer, director of the Center for Health Services Research at Georgia State University in Atlanta.

Highmark expects to sell "several hundred thousand" gift cards, mostly between $75 and $100, during the next year, Mr. Bellard said.

The company is initially marketing the product in Pennsylvania, but expects to expand nationwide at some point in the future .

Highmark administers health plans that cover 4.6 million people.

The Highmark gift card, which contains the Visa logo, is issued by Meta Financial Group Inc.'s MetaBank, a bank and prepaid-card issuer in Sioux Falls, S.D., through a licensing agreement with Visa Inc.'s Visa USA Inc.

Each card has a fee of $4.95, plus shipping and handling.

Write to Kris Maher at kris.maher@wsj.com