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Should 'catastrophic' health insurance coverage be allowed?

Health Care and Health Insurance
What options do people have when they lose health insurance?
What options do people have when they lose health insurance?

Over the past few years, many Americans have been perturbed to find that the health insurance they carried for years prior to the mandates of the Patient Protection and Affordable Care Act went into place had to be canceled. That was because those plans failed to meet minimum requirements put in place by the ACA. But now some experts are once again advocating for the inclusion of those so-called "catastrophic" health plans that only cover emergency situations, as a means of keeping their costs down over the course of the year.

Data shows that the average family in the U.S. pays about $17,000 for its health insurance coverage over the course of the year, and unless that number is being reduced by subsidies from the federal government or an employer is picking up most of that tab, it's a cost that's often too much for people to bear, according to a report from the Orlando Sentinel. But in allowing people to once again take on catastrophic coverage only, and in doing so prevent them from being hit with big insurance bills even if they don't often seek health care services, could help a certain subset of Americans.

Who would benefit?
Some experts believe the most obvious beneficiaries of catastrophic plans would be the economically disadvantaged. There has been a lot of attention paid to "churn" for people with low incomes who might have to move back and forth between qualifying for Medicaid and buying coverage via the government-mandated health insurance exchanges, and catastrophic plans might serve to protect them from huge medical bills if this churn leads them to go without coverage at any point. This might be especially true in the states where lawmakers did not expand Medicaid programs as requested by the Obama administration, and therefore left potentially large numbers of people within their borders both unable to qualify for Medicaid and unable to get onto the exchanges.

This might also be true of the so-called "young invincible" group of millennials who don't want health insurance because they generally feel fairly healthy. That group of people, too, is likely to have limited financial resources.

Even after the ACA, many Americans may still be looking to reduce their health insurance costs.Even after the ACA, many Americans may still be looking to reduce their health insurance costs.

What else could happen?
This might also lead to more health insurance options for consumers overall, because it would constitute a slight loosening of regulatory controls placed on the industry by the ACA over the last several years, the report said. That, in turn, could increase competition and potentially end up bringing prices down for everyone; many experts believe the health insurance market is no longer as competitive as it once was, because even though Americans are now required to have health insurance by law, many are having their choices subsidized. As a consequence, they don't have to worry as much about price if they're on the exchanges.

In the meantime, anything health insurance companies can do to offer policies that stay within current guidelines but keep costs as low as possible will likely go a long way toward connecting with people who are looking for the best option for their needs.



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