One of the provisions of the PPACA was designed to do away with “mini-med” plans that place low caps on annual and lifetime benefit amounts. As of next year, policies must have annual maximums of at least $750,000 and this amount will increase through 2013, becoming unlimited in 2014. But the Department of Health and Human Services has granted waivers to 30 companies and organizations – impacting about one million workers – to allow them to continue to offer mini-med plans for at least the next year. The concern was that if the employers and unions involved had to increase the annual caps on the policies to $750,000 next year, some of them might have opted to discontinue the health insurance all together, and HHS was concerned that this would adversely impact the employees who are currently covered by the mini-med policies.
McDonald’s is one of the companies that was granted the waiver so that they can continue to offer mini-med policies to nearly 30,000 part-time hourly employees. They offer a mini-med policy that has a $2000 annual maximum benefit, and costs workers $14/week. That’s roughly $728/year in premiums, or about $61/month for a policy with a maximum annual benefit of $2000. For workers who need the occasional doctor visit, or even stitches to repair a damaged finger, that amount will suffice. But it’s hard to really think of it as insurance. A single night in the hospital will likely exceed the annual limit, as will most surgeries, or even an MRI in some cases. The problem with policies like this is that the employees might not take the time to read the fine print, and might just think “Ok, I pay $14/week and I have health insurance. Done and done.” Then they go along thinking that they are covered if something happens, only to find out exactly how bare-bones their health insurance is when they need it most. Remember John Q?
If these employees weren’t offered the mini-med plan in the first place, they might be able to find high deductible health insurance (that would truly provide coverage in case of a catastrophic illness or injury) by shopping around in the individual market. For a 25 year old in Denver, there are numerous health insurance policies available with premiums in the $55 – $65/month range. The plans have deductibles that range from $2500 to $10,000, and some even have copays for office visits (usually $35). They are all “real” health insurance policies that will provide a good safety net in case of a high cost injury or illness. My concern with the availability of mini-med plans with such low annual limits is that they provide almost no coverage at all in the case of a serious medical problem, and yet they might discourage employees from looking around for a better option, simply because it’s easier to just complete the paperwork provided by the employer and enroll in the mini-med plan.
HHS wants to protect employees from losing their mini-med plans, and has issued the waivers in order to help those employees keep their policies in place. But I wonder if that’s actually the best thing for the workers involved? Some of the policies in question might be better plans that have annual limits nearly as high as the minimum required by the PPACA. But is it really beneficial to workers if we help them keep policies with $2000 annual caps?