The Worst Argument Against Catastrophic Health Coverage
It's hard to think of a worse argument against catastrophic health plans, which generally charge lower premiums than most health insurance plans but come with higher deductibles, than the one offered by a Georgetown health research professor at the end of this Kaiser Health News article:
Many experts scoff at the argument that people don't need more than a very high-deductible policy because they're healthy and don't use many medical services.
"Unfortunately, people have catastrophic things happen to them, or they get chronic conditions that expose them to serious financial harm," says Sabrina Corlette, research professor at Georgetown University's Center on Health Insurance Reforms.
"The [ACA] provisions are designed to protect people from potentially ruinous medical bills," says Corlette.
This seems more than a little confused. The entire point of high-deductible insurance is to protect people from "catastrophic things" that result in "potentially ruinous medical bills." What those sorts of plans don't do is offer is coverage for routine medical expenses and lower-cost procedures.
Granted, this isn't the first time an Obamacare defender has come across as confused about high-deductible plans. In March, Health and Human Services Secretary Kathleen Sebelius tried to argue that inexpensive catastrophic plans aren't really "health insurance" at all. "Some of these folks have very high catastrophic plans that don't pay for anything unless you get hit by a bus," she said in response to a report by the American Academy of Actuaries estimating that average health premiums would go up under Obamacare. "They're really mortgage protection, not health insurance."
This fundamentally misunderstands the nature of insurance, and it ignores the value of these plans to people who simply want to insure themselves against large, unexpected expenses. But many of the people who have that coverage now will have to drop their current plans. Because what Obamacare's provisions are designed to do is regulate many of today's high-deductible health insurance plans out of existence. As the KHN piece also notes:
In 2014, plans sold on the individual and small group markets will have to meet new standards for coverage and cost sharing, among other things. In addition to covering 10 so-called essential health benefits and covering many preventive care servicesat no cost, plans must pay at least 60 percent of allowed medical expenses, and cap annual out-of-pocket spending at $6,350 for individuals and $12,700 for families. (The only exception is for plans that have grandfathered status under the law.)
Plans with $10,000 deductibles won't make the cut, say experts, nor will many other plans that require high cost sharing or provide limited benefits, excluding prescription drugs or doctor visits from coverage, for example….Many policyholders don't realize their plans won't meet the standards set by the Affordable Care Act next year, say experts.
If you like your health plan, you can keep your health plan…so long as Obamacare doesn't render it illegal.