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July 16, 2013

Administration to Let Employers Avoid Mandate by Offering Worthless Insurance

Posted in: healthcare

The Obama administration will allow employers to effectively avoid much of the employer mandate in the Affordable Care Act by offering basically worthless insurance. From Politico:

But some companies plan to offer “skinny plans” designed to duck the biggest penalties anyway, according to industry consultants. And the Obama administration has extended its blessing to this limited coverage, even though it would not protect individuals from medical bills that could cause financial ruin in the case of severe injury or illness. [...]

Skinny plans will have to cover preventive services like vaccines and cancer screenings without any cost-sharing — a requirement of all insurance under the health law. They can’t put a cap on annual benefits, as limited benefit, or mini-med, plans typically do now. But the lack of a cap is largely symbolic because the plans don’t cover the services that run up medical bills.

Basically these skinny plans will be insurance in name only. Since the “insurance” will not actually insure against any real medical problems it will cost the companies very little to offer. This will allow the company to cheaply avoid the bulk of the penalty by technically claiming they offer some form of coverage.

Of course if any employee mistakenly believes this insurance is worth anything and gets seriously sick they will be financially ruined. One of the biggest problems with Obamacare is that it depends on everyone being insurance experts.

President Obama has repeatedly said the point of his signature law is that “nobody should go bankrupt if they get sick.” Allowing these plans to qualify makes his statement more of a sick punchline than a promise.

Photo by kaustubh taware released under Creative Commons License


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