WSJ: More Employers Try Limited Health Plans

[question everything]

More Employers Try Limited Health Plans

Cheap 'Mini-Medical' Policies Cover Drugs And Doctor Visits, But Little Hospitalization
By VANESSA FUHRMANS
Staff Reporter of THE WALL STREET JOURNAL
January 17, 2006; Page D1

Employers are increasingly turning to an affordable type of health insurance that has a big catch: If you get really sick, it won't cover your major expenses. These low-cost offerings, called "mini-medical" or "limited-benefit" plans, are catching on as employers struggle to restrain the rising cost of health insurance. Available as group plans or individual policies, they typically cover four to 10 doctor visits a year, a certain amount of prescription drugs and some lab work or other tests. Premiums can cost as little as $40 a month -- far less than the $148 average for a major-medical plan bought on the market or the $335 average cost of someone on a company health plan, according to the Kaiser Family Foundation, a health-care policy research group.

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Mini-medical plans have been around since the '80s, and until recently were sold mostly to temp-agency, fast-food and chain-store workers. But they're becoming more commonplace as employers cut back on full benefits, or turn more to part-time and contract workers. Mini plans are also starting to appeal to a wider array of individuals who might otherwise not be able to afford insurance, including the self-employed or freelancers. Sometimes individuals buy these plans through professional associations. This spring a coalition of 10 large employers so far, including Avon Products, International Business Machines, General Electric and Sears Holdings, will make a number of low-cost options, including limited-benefit plans, available to independent contractors and part-time and temporary workers not eligible for regular company benefits -- about 900,000 people.

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Critics say that consumers don't always understand the limitations of these policies. Most hospital care isn't covered, or the benefits may be doled out in small increments, requiring consumers to contribute big chunks along the way. Annual payouts are often capped at $10,000 or less, so policyholders are largely on their own if catastrophic illness, such as a heart attack or cancer, strikes... In a sense, the plans are the inverse of the "consumer-driven" health plans that many employers and policy makers are pushing today, which require patients to pay out of pocket for routine care but provide coverage for catastrophic needs. Insurance brokers say that some mini plans are being sold to people who have high-deductible, consumer-driven plans to cover catastrophic care and are looking for some coverage for everyday expenses. Layering the two types of plans together can still be cheaper than a traditional major-medical policy.

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Mini-medical plans cause more than their share of consumer complaints, say some brokers and state insurance regulators. Some critics worry that many customers are young people who might not fully grasp the plans' limitations, or individuals who are buying policies on their own without the guidance of an employer's human-resource department. Overeager brokers may also gloss over them to promote their "upfront" benefits, say consumer groups, and some brokers and state regulators.

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Write to Vanessa Fuhrmans at [email protected]


URL for this article:
http://online.wsj.com/article/SB113745963230248086.html (subscritpion)

[methinks2]

1. I say it's better than nothing

they need to make these plans available for those who are free-lancers and/or self-employed. Where do I find one of these? I'm currently unemployed and was turned down when I tried to buy insurance on my own. Plus the cost of insurance is too high for most unemployed people.

[question everything]

3. As long as you realize that if something major happens

you are not covered.

Here, from the same story

Some of the biggest names in health insurance are pushing into the market, in addition to UnitedHealth, reflecting the growing interest in mini-medical benefits. Aetna Inc. jumped into the limited-benefit plan business last year after buying one of the market's bigger players, Strategic Resource Co. of Columbia, S.C. WellPoint Inc., Nationwide Mutual Insurance Co. and Coventry Health Care have also recently developed or are expanding into limited benefit plans.

[sui generis]

2. And a huge issue too

In Texas coverage like that would count as employee coverage and would therefore automatically disqualify you from obtaining greater coverage if you have ever been associated with a risk pool, for say, bilateral inguinal hernia, or elevated blood pressure, or having ever received a whole blood transfusion for any reason whatsoever.

Insurance is a racket - it needs to be regulated a hundred times more stringently than it is today.

[SoCalDem]

4. Employers should NOT have life & death power over employees

They already have more control than they should.

An employer should pay a wage for a task performed..and that's IT.

Health care should be affordable and available to EVERYONE regardless of who empploys them..

We need to join the rest of the civilized world and make the whole US a "group" and have every citizen "insured" under medicare.....costs would fall because with everyone in ONE group, costs would be leveraged..