Mini-Med Plans Get Waivers From Annual Limit Rules

Sen. Jay Rockefeller’s skepticism notwithstanding, the Department of Health and Human Services went ahead and gave 30 organizations waivers from health plans’ annual limits requirements. Without the waivers, companies would have had to provide individual policies with a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013, and unlimited coverage in 2014. Reportedly, the Obama Administration defends the waivers as the best way to keep people insured until the law fully takes effect. Regulations implementing the Affordable Care Act established those annual limits to incrementally eliminate coverage limits beginning in 2014. As we discussed previously in this blog, Sen. Rockefeller questions the value of the mini-med policies BCS, one of the waiver grantees, sells to McDonald’s hourly employees.

In early September guidance, HHS explained the reason for the waivers this way:
A class of group health plans and health insurance coverage, generally known as “limited benefit” plans or “mini med” plans, often has annual limits well below the restricted annual limits set out in the interim final regulations. These group plans and health insurance coverage often offer lower-cost coverage to part-time workers, seasonal workers, and volunteers who otherwise may not be able to afford coverage at all. In order to ensure that individuals with certain coverage, including coverage under limited benefit or mini med plans, would not be denied access to needed services or experience more than a minimal impact on premiums, the interim final regulations contemplated a waiver process for plan or policy years beginning prior to Jan. 1, 2014 for cases in which compliance with the restricted annual limit provisions of the interim final regulations “would result in a significant decrease in access to benefits” or “would significantly increase premiums.”

As of September 30, 968,765 individuals are affected by the waivers of the annual limit requirements. Among the organizations granted waivers, and the number of employees affected, are UFT Welfare Fund (351,000); CIGNA (265,000); Aetna (209,423); BCS Insurance (McDonald’s Corp, 115,000); and 26 other much smaller organizations. You’ll notice that these four large organizations granted waivers are all insurance companies. Another 114 applications for waivers are under review.

As costly as medical services are these days, is a $2,000 annual coverage limit health policy worth even the $14 weekly premium that low wage enrollees pay? Wouldn’t individuals be better off skipping these low-coverage, low-value so-called mini-med policies, save the premium dollars they otherwise would pay, and, should they need medical care, negotiate a payment rate with providers? Is low-value coverage better than no coverage at all? I wonder...

What do you think?