Thursday, December 9, 2010

More good news for consumers as a result of the Affordable Care Act: No more “mini-med” plans

HHS recently released guidance regarding limited benefit insurance plans. These plans tend to be much less expensive than more comprehensive plans. The tradeoff, unfortunately, is that coverage falls short of what’s needed when the subscriber gets sick. Some plans only pay $100/day in the hospital (which the true cost can be well over $1,000/day), or have extremely low maximum benefits of only a few thousand dollars.

These plans are fine for those who are healthy, but any chronic condition or any acute event will rapidly exhaust the coverage, leaving the subscriber without any way to pay for needed care. This is the reason such plans will no longer be permitted starting in 2014.

In the meantime, those people who have no other choice but to continue to use such plans now have increased protection. The plans must make the limits of coverage clear to all subscribers, and must provide information on how to access more options through the website. New limited benefit plans are not allowed (with some exceptions), and existing limited plans will have to obtain waivers to continue operating, and will no longer be allowed at all in 2014.

Although this will make insurance prices go up for some in the future, at this time it ensures consumers know what they’re getting and know where to go to find out about more comprehensive plans. Although the limited benefit plans are better than nothing, people deserve the peace of mind that comes with not worrying if the next medical problem they face will lead to bankruptcy.

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