15 Nov 2013

My Canceled Health Insurance “Plan” Was Probably “Junk,” So No Biggie

Health Legislation 5 Comments

[UPDATE below.]

Remember how I had the selfishness to be upset that my health insurance plan was rendered illegal by ObamaCare? Well Jamelle Bouie at The Daily Beast explains to me why it’s not a big deal:

Indeed, one reason not to jump on the GOP train of “solutions” to Obamacare’s current woes…is that the cancellation letters aren’t a problem. As Matthew Yglesias noted in a column for Slate, “it never made financial sense for the insurer to actually pay up in the case of major illness.” Most of the “plans” cancelled by insurers were junk—plans that gave peace of mind to consumers, but wouldn’t help them in the case of an emergency. They shouldn’t have been sold in the first place. And indeed, as Obama noted, part of the reason for health-care reform was that insurers were refusing to cover care for the millions of Americans who purchased these plans. Under the Affordable Care Act, this can no longer happen.

Five million Americans received cancellation notices. They account for a third of the roughly 15 million people in the individual insurance market, or just 1.6 percent of all Americans….

Yes, there’s no fun in receiving a cancellation notice, and yes, folks will have to pay more for coverage in the exchanges (though, it’s important to note that many are eligible for subsidies, and it’s always possible to expand subsidies for those who aren’t). But the truth is that these cancellations are a small price to pay for an insurance system that actually provides for people who are sick or injured, and doesn’t saddle them with tens of thousands of dollars in debt.

No, President Obama shouldn’t dismiss the anger of this small minority, but we also shouldn’t pretend that the current situation is worst than the past. It isn’t.

Do you see how Orwellian this is? He actually put the word “plan” in quotation marks. It’s like Michael Cohen saying the canceled plans could “barely qualify as insurance.”

Question: Do these people think fire insurance policies are actually “policies” and that they barely qualify as insurance? I mean, most homeowners don’t get any money out of those things. They just cover catastrophic outcomes, like your house catching on fire.

UPDATE: Actually in fairness, I think there are two things going on here. Cohen is quite outrageously saying that a plan with a high deductible etc. barely qualifies as insurance. But Bouie and Yglesias are referring (in part) to “rescissions,” in which an insurer apparently drops coverage when you get sick. So their claim is more defensible.

5 Responses to “My Canceled Health Insurance “Plan” Was Probably “Junk,” So No Biggie”

  1. Matt M (Dude Where's My Freedom) says:

    The notion that the government must enforce minimum product standards is the exact same logic that the American public gleefully supports when it comes to food, drugs, financial products, transportation, labor, pretty much everything really. Why not here too?

    It’s logically inconsistent to support ANY sort of government regulation of voluntary trade while opposing Obamacare on the grounds that it is causing plans to be canceled. The mechanism in place here is no different from the FDA, minimum wage, CAFE standards, etc…

  2. Sam says:

    My cancelled plan didn’t have a high deductible, but it had a yearly cap of $20,000 (which is why it’s now illegal). So if I ever had a major surgery I’d be screwed. But, I was willing to take the risk to pay only $100/month for health insurance…

  3. joe says:

    This condescending spin job is adding insult to injury. The American people were lied to repeatedly about something that impacts their health and finances. This is about as serious a lie a President can tell the American people. It trumps Reagan’s lie about trading weapons with Iran by a mile. It even trumps the lie about WMDs.

  4. Gamble says:

    My plan had 3K, then 4k, now 6K deductible. IT has increased to keep my monthly payment similar yet this has also inched up. After I pay the deductible, there was no more payment of nay type, not even a copay required. This afforded me 3M dollars worth of expenses, excluding mental health. I also had a tax free, interest bearing savings account connected to this plan. I save tax free money, collect interest and use it to pay the deductible.

    Really though, you don’t pay the deductible, you pay health providers directly from your savings account. This made me have skin in the game, it made me price shop, it made health providers compete.

    IF for some reason my direct expenditures equal 6K, then my deductible is considered to be paid in full and the policy kicks in.

    Need I say more.

  5. Brian says:

    “Junk plans” is far too simplistic to capture the diversity of plans out there. As an insurance professional, I agree – there are many plans that I wouldn’t recommend any of my friends purchase regardless of their situation. There’s just no real actuarial value there for the insured. [Note: I’m an Austrian. I’m not saying these plans should be regulated out of existence or anything just that I wouldn’t recommend anyone buy a Chevette if it cost $25,000].

    However, there’s a whole host of “good” plans that Obamacare disallows. Like a low deductible, low cost plan for a single 34-year old male that doesn’t include maternity benefits.

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