Do ‘Mini-Med’ Insurers Gouge Low-Wage Workers?

[Omaha Steve]

http://www.inthesetimes.com/working/entry/6519/mini-med_insurers_gouging_low-wage_workers/

Thursday October 7 3:14 pm

By Lindsay Beyerstein


An employee at the oldest operating McDonald’s, in Downey, Calif. (Photo by DAVID MCNEW/Getty Images)

Sen. Jay Rockefeller (D-WV) wants to know whether health insurers are gouging workers for so-called "mini-med" insurance plans, also known as limited benefit plans, for reasons that will become obvious.

About 1.4 million Americans, typically low-wage, part-time, and temporary workers, have this kind of coverage. McDonald's, HomeDepot, Wal-Mart, Friendly's and other national chains offer mini-med plans.

Under healthcare reform, insurers must spend 80%-85% of their premiums on treating the sick—as opposed to paying executives' salaries, lobbying, buying attack ads, sleuthing medical files for disqualifying pre-existing conditions, and reaping sweet profits.

The mini-meds say they can't possibly meet that standard, known as a medical loss ratio. They claim limited benefit plans are unusually expensive to administer because of high employee turnover and because employees don't use very much healthcare. It's a clever model. If you know your insurance doesn't cover anything, you'll defer care as long as you can. Hitting a $2,000 benefit cap with one ER visit stops claims for the rest of the year.

McDonald's made headlines last month when it threatened to stop offering health insurance to its 30,000 hourly wage workers if the government didn't waive the medical loss ratio requirement. The Department of Health and Human Services knuckled under and gave McDonald's and 30 other employers, including a teachers union, a 1-year extension. DHHS promises that the extensions will end as soon as the state health insurance exchanges are up and running.

For $14 a week, McDonald's employees are eligible for up to $2,000 a year in benefits. That works out to $728 a year (plus co-pays) for no more than $2,000 worth of care. In other words, the premiums add up to an outrageous 36% of the maximum benefit. This isn't insurance. It's a $728 coupon for less than 2/3rds off the first $2,000 of your medical bill. After that, you're on your own.

FULL story at link.