October 21, 2010
Mini-med plans allow employers to offer a health plan at a low cost to both the company and employees, but new restrictions imposed by the health care law endanger these plans, says David R. Henderson, research fellow with the Hoover Institution and an economics professor at the Naval Postgraduate School.
- Mini-meds allow companies that employ low-wage, seasonal and part-time workers, and contractors to offer a health plan at a low cost to both the company and employees.
- Premiums for these plans generally range from $20 to $190 per month for single coverage and $100 to $500 a month for family coverage.
- They offer basic benefits, such as a prescription drug discount card, and coverage for doctors' visits and lab tests.
- Deductibles and copays are also low, and some mini-meds provide first-dollar coverage for some services (such as wellness visits), so there is no out-of-pocket cost before the benefits become accessible.
There is a provision for a waiver program for the existing mini-meds, allowing the companies that sell them to petition the Office of Consumer Information and Insurance Oversight (OCIIO) to ask permission to continue to insure these people under the terms of their plans, says Henderson.
- However, the petitioning process is ill-defined, and there is no legal standard at all for granting the waivers themselves.
- Asking for such waivers is a crapshoot, dependent on the whims of bureaucrats.
- In any event, the waivers will expire in 2014, when employer-sponsored health plans cannot legally have annual or lifetime limits.
The end result is, and likely was always intended to be, that the mini-med plans, derided by the government but embraced by the market, will become harder to keep and virtually impossible to replace.
Source: David R. Henderson, "Mini-Med Plans," National Center for Policy Analysis, October 21, 2010.
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