We keep hearing about how short-term health plans are “junk insurance.” Really? Compared to ObamaCare’s high-deductible HMOs, or Medicaid’s long and often deadly waits?
A new study finds that at least 21,900 people on Medicaid have died waiting for treatment in states that expanded Medicaid eligibility under ObamaCare.
The reason, the Foundation for Government Accountability report says, is that ObamaCare opened Medicaid up to millions of able-bodied non-poor adults. That created a surge in demand for scarce Medicaid resources, forcing the poor to wait longer for services.
An insurance plan that you can’t use? That’s junk insurance.
Meanwhile, those signing up for private insurance through an ObamaCare exchange are increasingly finding their choices limited to HMO plans that also come with sky-high deductibles.
Health care consultant Avalere says that 73% of plans offered in the exchanges impose narrow network restrictions on members. If you go out of network, you often get zero coverage.
Avalere also found that deductibles for a typical Silver Plan now average about $4,000.
Despite these restrictions, ObamaCare plans also charge budget-busting premiums. A 30-year-old who isn’t eligible for subsidies would have to cough up an average $4,370 a year for a Silver plan.
In other words, this person will spend almost $9,000 out of pocket before getting a dime in insurance benefits. And that assumes they never go out-of-network for care.
That’s also junk insurance.
Yet when the Trump administration tried to provide a lifeline to those who can’t afford overpriced ObamaCare or aren’t eligible for Medicaid, critics called these plans “junk insurance.”
Earlier this year, the Trump administration issued proposed rules that would let insurers offer short-term plans that last 364 days. These plans don’t comply with ObamaCare mandates. Currently, they can only last three months.
Trump’s critics say this will put consumers at grave financial and health risk because the short-term plans won’t have to cover everything ObamaCare requires, and can deny coverage for pre-existing conditions. They say this will also destabilize the ObamaCare exchanges by drawing away the young and healthy.
The facts, however, are on the industry’s side.
First, the average short-term premium for a 30-year old is just $110 a month — a third of the Silver plan — with a $4,000 deductible, according to eHealth.
And while these plans can deny coverage for pre-existing conditions, they reject only 13% of applicants, according to eHealth.
What’s more, short-term plans cover a wide range of benefits, from doctor and hospital visits, emergency care, lab tests, to in some cases drug costs.
But leave all that aside. If you really want an answer to which type of insurance is “junk,” all you need do is look what consumers are buying with their own money.
What you see is a stagnant ObamaCare market — comprised almost entirely of people getting massive taxpayer subsidies to make ObamaCare plans affordable. In contrast, you see exploding enrollment for things like short-term insurance or health sharing ministries.
In our view, it is always better to listen to consumers than policy “experts” with a political ax to grind.