Vail Kozatch: Junk insurance good for no one
The Affordable Care Act was designed, in part, to ban horrible health insurance. Before the law was passed, consumers often tried to save money on their coverage by purchasing plans with few benefits that didn’t help much if they got really sick with cancer, needed an expensive prescription or were badly injured in a car wreck.
The ACA sought to end that by requiring health plans to cover a standard package of services, no matter who bought them.
Now the Trump Administration is bringing back junk insurance. In yet another aggressive move to undermine the ACA, they issued a new regulation earlier this month allowing insurance companies to sell discount plans that do not offer basic benefits and discriminate against patients with pre-existing conditions.
Short-term health plans are often dismissed as junk insurance and for good reason. They were originally meant as a temporary option for people who found themselves with a brief break in their coverage, such as when you lose a job.
Unlike the coverage sold on the ACA exchanges, they are not required to offer a minimum-benefits package; they can leave out things like maternity care, mental health or prescription drugs. They can cap coverage and impose higher deductibles.
Because they can offer skimpy benefits to a narrow group of healthy customers, these plans are naturally attractive to people without much in the way of immediate medical needs. Of course, when those people get sick, they may feel differently.
The ACA never was perfect, but now it is worse because of the actions of the Trump Administration. What they fail to acknowledge is that ACA premiums are rising thanks largely to their own attempts to sabotage the law, which, judging from data on patient expenses and premiums, had finally started to stabilize in 2017.
As the administration itself has admitted, expanding the market for short-term insurance could make premium hikes worse. Routing young, healthy insurance shoppers away from the ACA exchange will skew that market further towards sick, unprofitable patients, forcing carriers to raise their prices in order to make a profit.
The good news is that states don’t have to sit there and watch their health insurance markets devolve. A handful already ban the sort of short-term insurance policies the White House is unleashing.
When voting this fall, be sure to consider what junk insurances could do to affect you, your loved ones and community and to keep in mind that the current Congressional members have done nothing to remedy this undermining of consumer protection and the insurance marketplace stability that was in place at the beginning of 2017.
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