Is no insurance better than a little? Some say "Yes"

Andrew Freiburghouse | November 26, 2010

If you buy a limited health insurance plan, you probably know it isn't a top-of-the-line. You are unlikely to expect it will cover everything and anything. You just know it is cheaper, and perhaps all you really want is catastrophic coverage. What you may not know is that critics of these so-called Mini-Med plans say they offer something worse than nothing--dashed hopes and false expectations.

Leading the charge against the Obama Administration's decision to allow some health insurance companies to continue offering Mini-Med plans is Sen. John D. Rockefeller IV (D-WV). Though health care reform is supposed to abolish coverage limits, many of these plans cover as little as $2,000 a year, according to critics. Some companies, insurers and union plans, including McDonald's and the parent company of Red Lobster and Olive Garden, have received one-year waivers that allow them to continue offering limited health insurance, according to a New York Times report.

Health insurance options for part timers

Many companies argue that limited health insurance plans are the only affordable health insurance option for part-time and low-income employees, and that some coverage is better than nothing. For $11 a week, McDonald's offers a plan that pays $2,000 a year in benefits, according to the New York Times. The burger giant contends employees are well informed about what they get for the low price.

However, a Senate hearing showed that's not always the case. People who found themselves stuck with exorbitant medical bills that limited-benefit policies didn't cover testified they were totally surprised with the limits to their plans, according to the New York Times.

The Obama Administration and others insist proliferation of this type of health insurance coverage is simply a stop-gap measure until health care exchanges are available in 2014. At that time, all plans must end coverage limits. Until then, if considering one of these plans, read the fine print carefully. Consumer advocates say that in some cases, no insurance is better than some: patients completely without coverage might qualify for hospital discounts or even charity care. So much for trying to be proactive and responsible.

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