At a Senate Commerce Committee hearing last week, Senators examined health insurance plans that offer minimal coverage to millions of Americans known as “mini-med” as these plans will remain available for a number of years despite violating the new rules under health care reform legislation.
Originally, mini-med plans were designed for low-wage Americans who could not afford comprehensive health insurance, yet would cover costs associated with a serious illness, or so was believed. Unfortunately, many of these plans are designed to pay less than the amount they said will be covered. For example, a health insurance policy may promise coverage of $50,000 annually, but when you read the fine print, the plan may severely limit the amount of coverage. For two Californians who testified, that was certainly the case.
Eugene Melville of Riverside bought a limited health insurance plan from Aetna believing that the policy was capped at $20,000 annually. When Mr. Melville was diagnosed with oral cancer, he was quickly informed that the plan only paid $2,000 in doctors’ visits and care provided outside a hospital. Jessica Lynn Carroll of San Jose had a similar experience with her Aetna policy after going to the emergency room when she lost feeling in one of her arms. What Ms. Carroll found out was that the Aetna policy only paid $500 toward the bill and ended up with a $16,000 bill for her care. According to Jessica, “In no way did I expect the bill that arrived. If I had known the insurance I had in th first place was so absurd, I would have never purchased it.
Echoing that sentiment was Senator Rockefeller (D-WV) noting that:
“More than a million Americans enrolled in these plans think they have health insurance to protect them from financial catastrophe if they become seriously ill or hurt. In fact, they don’t.”
Senator Barbara Boxer (D-Ca) characterized the situation during the hearing saying that “mini-med plans often mislead consumers about the level of coverage offered.”
Mini-med insurance plans made headlines when McDonalds threatened to pull health insurance coverage for its employees, telling the Obama Administration that the plans it offers employees would be unable to meet the minimum requirement that 80% of a health insurance company’s expenses be directed toward patient care. Moreover, the health insurance plans are also in violation of the health care reform law because it places a lifetime cap on coverage. Today at McDonalds, employees pay $11 per week, or nearly $600 annually, for coverage that maxes out at $2,000. McDonalds has requested a waiver from the new rules – which it has been granted for one year – so it could continue to offer its current plans to its employees while the Obama Administration determines what to do with the mini-med plans.
In the meantime, millions of Americans will continue to be offered and covered by min-med health insurance plans for another three years until the exchanges are up and running in 2014. For those like Mr. Melville and Ms. Carroll with their thousands of dollars of medical bills, where is their waiver?