More Warnings about Low-Cost Health Plans

One week after the Attorney General’s office filed suit against MEGA Life, more examples of the failures of low cost/minimal benefit plans are emerging. Christopher Rowland’s article in today’s Globe details hardships inflicted on subscribers of those plans. High deductibles and copayments, benefit restrictions, and low coverage caps lead to huge medical bills for individuals they “insure.” Worse yet, the failure by MEGA Life agents and its sister plan, Mid-West National Life to disclose plans’ coverage limitations means subscribers don’t know the costs facing them until it’s too late.

Concerns about skinny health plans are being raised during a timely phase of health reform implementation. The Connector Board is now deciding what types of products it will offer to individuals and employees of small businesses. They are also deciding what will qualify as insurance for the individual mandate. The decisions facing the Board require delicate balancing – while it is important for the Board to offer individuals and small businesses affordable coverage, the plans must also provide meaningful coverage. The stories about MEGA Life show that skinny coverage turns out to be far from affordable as well.

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5 Responses to More Warnings about Low-Cost Health Plans

  1. admin says:

    I, too, am curious to see how long it takes me to fix this

  2. The clock used to provide the timestamp on Comments to this Blog has not been reset to Daylight Savings Time. I will be very curious to see how long it takes from the time of this posting until that’s fixed.

  3. The state has embarked on an attempt to cover all residents with health insurance. Part of the mandate includes a requirement that the plans be of high quality and affordable. But nowhere does the state endeavor to protect people from making the wrong decision. Unless the state takes on the responsibility of providing universal care to all, contingent only upon residence in the state, the individual resident will continue to have the option to make a bad choice. Absent this implicit permission, we simply must have uniform, universal and un-declinable health insurance—and THAT is not in Chapter 58.

    Now, there is at least one thing the Commonwealth can do within the limits of Chapter 58 that no one has yet discussed. The state could require that the expected medical loss ratios for every product be published at any time the price of the plan is provided. Although imperfect, the MLR provides information that is at least as valuable as the price without infringing on the ability of any admitted insurer to sell its products. That there will be at least one resident who will buy a plan with the lowest loss ratio is just as certain as that there will always be someone who buys a scratch ticket to the Lottery.

    Chapter 58 mandates that every resident be covered, but it requires neither that they buy the plan that is best suited to them, nor even that they actually use the insurance to pay for a covered healthcare expense. Providing options that address the problem of lack of access to the healthcare system is now in the state’s bailiwick, but outlawing stupidity is not.

  4. Sri Gopi says:

    Our plan (BMC HealthNet Plan) provides good options with 4 different plans. We offer high premium low copay and low premium high copay plans in addition to free plan (for people under 200% fed poverty level)

    Our website is
    Check out our site for more information on member benefits.

    Sri Gopi.

  5. Jane Gardner says:

    There is great danger in the prevalence of “skinny” plans as “reform” moves on. Since the law is now forcing everyone to have coverage, provided it is “affordable” there will be a lot of pressure to “bless” these plans; people would then be forced, essentially, to purchase them as the only “affordable” option…and there will be proclamations that “everyone is insured.” But a read of those plans shows they barely, if at all, can be classified as “health insurance.” Many do not cover any preventive services, they have very low caps on the maximums that will be paid toward even the basics, such as a hospitalization or doctor visit, they are not clear on what the insured’s actual financial responsibility will be because their benefit is, e.g., “80% of approved fee schedule…” without stating what the “approved fee schedule” is. It goes on and on. The point of “reform” should be to get comprehensive health care coverage available to everyone; the focus seems, however, to be on getting everyone to either be provided or be made to purchase health “insurance.” (Reference Jon Kingdale’s characterization of the Connector mission at last weekend’s retreat.) That focus could make things much worse for many rather than offer the relief so badly needed.

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