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Mini-med insurance faces political resistance

Kim Morris | June 23, 2009

It was more than twenty five years ago in 1983 when MedSave.com's founder first published predictions that commercial health insurance would ultimately require rationing provisions to deal with our national health care inflation crisis. We stand by that prediction today and see much evidence that rationing is gaining acceptance in commercial health plans today. In fact, the fastest growing segment of the health insurance industry is the "mini-med" or limited benefit health insurance policies. Health insurance policies have steadily evolved from covering a broad form "all ordinary and necessary medical expenses" to limited benefit policies that place limitations on covered procedures, dollar amounts of coverage and include built-in requirements for cost-sharing of expenses.

Attempts to ration health care through commercial insurance were not politically popular topic in 1983 and are just as unpopular today. Consider the AARP's recent decision to offer a mini-med health insurance policy to its members. AARP chose Unitedhealthcare to design and distribute the low cost insurance program. But the plans were scuttled when some lawmakers became concerned that such a simplistic change might undermine other health care reform measures. Consumer advocacy groups express concern that some unsophisticated buyers may misunderstand the coverage or might not otherwise be qualified to determine what type of health insurance benefits they should be allowed to purchase.

MedSave.com takes the position that consumers should be allowed to choose from among as wide a selection of health insurance products as possible, and that public and private entities should combine forced to provide ongoing consumer education about health insurance. It seems obvious to us that any amount of privately purchased insurance is better than none at all.Every dollar of privately purchased insurance results in a reduction of at least a dollar of public expenditures through Medicaid programs. Frankly, from a public economic policy perspective, it does not matter what the insurance covers or does not cover. Regardless of the policy's internal limitations of coverage - insurance provides individuals with access to the health care system and this should be the primary goal of universal health care reform. Finally, we reject the argument that American consumers are not qualified to evaluate and determine what type of health insurance is most appropriate for themselves. More than 25 years experience advising more than a million insurance shoppers tells us that consumers, on average, are more savvy about health insurance issues than their political leaders.

We would not target politicians or organizations who take a vain but relatively innocuous error that consumers must be protected from their own poor judgement. However, the motivation of some health care activists seems far more sinister. Organizations like Families USA that are committed to a specific outcome like a government-run single-payer system attempt to block the natural commercial health care evolutions that reduce the need for more radical political solutions. Our efforts should focus on the solution, not the political course of action we take to achieve the results.

When evaluating the future of limited benefit mini-med health plans, we consider these key points:

1. A majority of the new health insurance plans awaiting approval from the various state insurance departments are universal mini-med insurance. Without these, we would see few new health insurance choices and no low cost options. We expect that several new innovative mini-med health insurance products will be introduced in the market each month for the foreseeable future.

2. Consumer demand for limited benefit health insurance has grown sharply and there is no reason to assume that this demand will wane. Virtually all current trends in employee benefits, public entitlements and consumer finance support the conclusion that mini-med insurance will continue to gain popularity.

3. Politically-based resistance or prohibition is never a serious obstacle to widespread consumer demand for a product.

4. When large politically-sensitive organizations like AARP decline to offer mini-med plans through their powerful sales program, a greater portion of the product distribution will be handled by commercial enrollment services like MedSave.com. We should have no complaints.

Tags : mini med insurance

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