Fwd: qotd: Bare-bones plans still with us

_______________________________________________
Quote-of-the-day mailing list
Quote-of-the-day@mccanne.org
http://two.pairlist.net/mailman/listinfo/quote-of-the-day

-------- Original Message --------
Subject: qotd: Bare-bones plans still with us
Date: Thu, 16 Jan 2014 13:34:13 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



The Wall Street Journal
January 16, 2014
Bare-Bones Health Plans Survive Through Quirk in Law
By Theo Francis

The health-care overhaul was supposed to eliminate insurance plans that
offer skimpy coverage at cut rates. But a quirk in the law stands to
help some companies keep them going for years to come.

AlliedBarton Security Services, a closely held firm that employs more
than 63,000 people nationwide, has offered a modestly updated version of
its so-called mini-med plan to employees this year and it intends to do
so in 2015 as well, even though the cheap coverage fails to meet
requirements of the Affordable Care Act.

What makes the no-frills plan attractive is that it will save money for
AlliedBarton and for its security-guard employees who don't incur
substantial medical bills, many of whom want a low-cost option,
according to the company.

What makes it possible under the health law: As long as companies offer
at least one plan that complies with the law's requirements, they are
free to keep offering ones that don't.

That has enabled companies to find ways to comply with the law while
minimizing increases in their health-care costs. The result has been an
increase in lean insurance offerings such as "fixed-indemnity" plans.

Such plans, which might cost an employee just $80 a month in premiums,
generally pay a set amount for specific medical services—$70 for a
doctor's visit, for example, or $20 for a prescription—without regard to
the underlying cost. They limit the amount of payments or care available
in a year, and can exclude entire areas of coverage, such as
mental-health care. When catastrophic injury or illness strikes, they
often pay little.

AlliedBarton intends to offer its employees two low-cost insurance
options—one that meets the law's requirements for both scope of coverage
and affordability, and a cheaper plan that falls short. Offering the
compliant plan heads off the law's penalties. And offering the cheaper
plan—which the company thinks most of its security guards will
pick—keeps costs down.

Employees who pick the cheaper plan could have to pay the individual
penalty—though that could still cost them less than signing up for the
more expensive plan.

Fixed-indemnity coverage "violates the spirit of the law," said Jay
Angoff, a Washington lawyer who previously headed the federal
insurance-oversight office and served as Missouri's insurance
commissioner. "There's a strong argument that it is inherently
misleading, and it provides so little coverage that it shouldn't be sold
at all." Such plans, he adds, "were never intended to survive past 2014."

AlliedBarton's Mr. Buckman countered that workers are good at weighing
medical and financial trade-offs. "To a lot of people for a lot of good
reasons, fixed-indemnity plans may be a better choice, and we think it's
appropriate for people to be able to make choices," he said.

http://online.wsj.com/news/articles/SB10001424052702303754404579312760133827256


Comment: What kind of rule is this? As long as employers offer to their
employees a plan that complies with the requirements of the Affordable
Care Act (ACA), but a plan that the employees cannot afford to purchase,
then the employers are relieved of their penalties for providing them
with almost worthless "fixed indemnity" plans, even though that means
that the employees may have to pay a penalty for failing to be insured
with a qualified plan.

ACA was designed to interfere as little as possible with
employer-sponsored plans since supposedly that large sector of the
health insurance market was working so well. But it wasn't for far too
many. Employers offering mini-med style fixed indemnity plans is only
one of the potential deficiencies of employer-sponsored coverage, others
being high deductibles, narrow provider networks, and forgone wage
increases to pay for the coverage.

Right now, several respected journalists are criticizing single payer
advocates for being critical of the health care gains under the
Affordable Care Act. They have it all wrong. We are not critical of the
gains; we are critical of the failure to correct the major deficiencies
in our system that cause so much suffering and financial hardship.
Instead of tweaking a mediocre system, we should fix it. We could do
that with a single payer national health program - an improved Medicare
that covers all of us.