This week’s Grand Rounds included an article by David Williams about mini-med plans that I thought was worth sharing. David explains that although he’s not a fan of mini-med policies, sometimes they are indeed better than nothing. Mini-med policies come in all shapes and sizes, and David’s article describes policies with $25,000 or $50,000 benefit maximums… a far cry from the $2,000 maximum policies that I wrote about earlier this month.
I agree with David’s point that for some people, a $50,000 medical bill might as well be a $1 million one, in terms of their ability to pay for it without health insurance, and the chance that they would have to declare bankruptcy in order to settle the debt. If the option is between having no health insurance and having a policy that will cover a maximum of $50,000, I can definitely see the merit in having the mini-med policy. And it’s also true that people are much more likely to have claims in the $25,000 – $50,000 range than in the million dollar range.
But when it comes to policies as flimsy as the ones that cost employees $728/year for coverage that will pay a maximum of $2,000/year, it’s hard to see how an employee could really be better off with the mini-med coverage. If employers that currently offer policies that cap out at $2,000 in benefits were to switch to $50,000 policy caps, it would be less frustrating when they are granted waivers to continue to provide mini-med coverage to their employees.
If people truly understand exactly what they are buying when it comes to health insurance – how much it costs, what the benefit maximums are, and any significant policy exclusions – then it seems fair to allow people to purchase mini-med policies if the alternative would be for them to be completely uninsured. Of course, mini-med policies are often accompanied by shady marketing practices that include skimming briefly over the glaring holes in the coverage while singing the praises of the office visit copays. Hopefully the PPACA regulations that will kick in over the next few years will help to eradicate the most egregious of the mini-med policies, while also allowing some room for consumer choices when it comes to health insurance coverage.