We’ve found ourselves revisiting the issue of mini-med plans over the past few days, after getting a call from a client who told us that he’s stuck on one. Last September, most health insurance policies had to start complying with the ACA rules that called for no lifetime limits on policies and annual limits not less than $750,000 for “essential” benefits (that amount is now $1.25 million will continue to increase until 2014 when it will also be unlimited). But HHS addressed the issue of mini-med plans by allowing companies to apply for waivers that would let them continue to offer mini-med plans (with annual limits below the required level – sometimes way below it). In order to qualify for a waiver, companies had to show that complying with the maximum benefit requirements would cause premiums to substantially increase or the plan to be dropped all together. In order to avoid leaving the enrolled employees with no health insurance at all, HHS opted instead to allow those companies to continue to offer mini-med coverage temporarily (although whether employees are better off with a very low benefit mini-med plan or nothing at all is debatable). As of 2014, such plans will no longer be allowed (But who’s to say for sure that waivers won’t be created to get around that rule too?)
Anyway, so here we are, a year after the annual maximum requirements of the ACA kicked in. HHS continued to accept waiver applications up until last month, including both new applications and applications from companies that had already received one-year waivers and wished to extend the waiver through 2013. The update that CMS released on August 19th, 2011 showed 1472 one-year waivers granted, along with 106 extensions for companies that will continue to offer mini-med plans through 2013.
One of the requirements for securing a waiver is that the company offering the mini-med plan to its employees has to clearly notify the employees that the plan does not meet the ACA requirements and that a waiver has been granted. The annual limits of the plan have to be plainly stated, and the whole disclosure has to be in 14 point bold font and displayed on the front of the materials pertaining to the health insurance policy. Here’s an example of the wording from HHS. Notice the section that says “If the lower limits are a concern, there may be other options for health care coverage available to you and your family members. For more information go to healthcare dot gov.”
Obviously, HHS’s intent was to make sure that employees covered by a mini-med plan are fully aware of the limitations of their coverage and also aware of other options that would provide better coverage.
So back to the client who called us. He’s one of the 3.4 million Americans who are enrolled in mini-med plans that have been granted a waiver by HHS. His policy has a $5000 annual benefit maximum per person and costs him $89 a week to cover himself, his wife, and his daughter. His little girl had to have ear tubes put in this year, and that used up her benefit entirely. So she’s basically uninsured right now, even though he’s still paying premiums for “family” coverage.
He’s paying roughly $360/month for a mini-med that is effectively not covering his daughter at all for the rest of the year. To give you an idea of how individual policies compare with mini-meds in terms of premiums, an Anthem Blue Cross Blue Shield CoreShare plan with a $2500 deductible and 50/50 coinsurance – up to another $3500 oop – would be less than $290/month ($70/month less than what he pays now). His mini-med plan has a $250 deductible, and the Anthem Blue Cross plan has a deductible ten times that high. But health insurance is supposed to be a safety net to protect us from financial ruin and allow access to care in the event of a serious illness. People can figure out payment plans for a $6000 out of pocket exposure, but not for a half million dollar hospital bill should some catastrophic health crisis occur.
So he applied for an individual policy for his family, and was approved. But then when he tried to cancel his mini-med plan, his employer told him that he couldn’t cancel it until the open enrollment period next April. It would seem that trapping enrollees into a year-long contract with a mini-med plan is not in line with the spirit of the HHS guidelines that call for full disclosure regarding the waivers and directives to steer enrollees towards healthcare dot gov if they are interested in getting a policy that does comply with the ACA rules regarding annual policy limits.
We have contacted the Colorado Division of Insurance, HHS, and NAIC (National Association of Insurance Commissioners) about this issue. The DOI wasn’t aware of a solution. I left a message with HHS and their voice mail said they would get back to me within five business days (this was yesterday). At NAIC I left a message for their Health Policy & Legislative Advisor (I was told he works closely with HHS), but I haven’t heard back from him yet either.
If any of our readers have information that could be helpful in this situation, we’d love to hear your comments. If and when we hear back from HHS or NAIC, I’ll post an update with more details.