Posted by
Defend America on Tuesday, June 08, 2010 11:38:38 AM
Health law could ban low-cost plans
By JENNIFER HABERKORN |
6/8/10 5:01 AM EDT
Part of the health care overhaul due to kick in this September could
strip more than 1 million people of their insurance coverage, violating
a key goal of President Barack Obama’s reforms.
Under the provision, insurance companies will no longer be able to
apply broad annual caps on the amount of money they pay out on health
policies. Employer groups say the ban could essentially wipe out a
niche insurance market that many part-time workers and retail and
restaurant employees have come to rely on.
This market’s limited-benefit plans, also called mini-med plans, are
priced low because they can, among other things, restrict the number of
covered doctor visits or impose a maximum on insurance payouts in a
year. The plans are commonly offered by retail or restaurant companies
to low-wage workers who cannot afford more expensive, comprehensive
coverage.
Depending on how strictly the administration implements the provision,
the ban could in effect outlaw the plans or make them so restrictive
that insurance companies would raise rates to the point they become
unaffordable.
A cadre of employers and trade associations, including 7-Eleven,
Lowe’s, the National Restaurant Association, the National Retail
Federation and the U.S. Chamber of Commerce, have asked the
administration to allow the plans — at least through 2014, when the
insurance exchanges are set up and tax credits become available for
low-wage workers.
The struggle over the provision highlights the importance of the new
law’s implementation timetable and the way its parts interlock with one
another. The legislation was front-loaded with consumer-friendly
reforms, such as the ban on most annual limits, in hopes the law would
become more popular. Polls show the legislation is supported by about
half the public.
But many of the more comprehensive features of the overhaul, such as
the insurance exchanges and tax credits that would help cover those who
use limited-benefit plans, don’t come into play until 2014.
That means, for nearly three years, the effect of the ban on annual
limits could be costly for the low-wage, seasonal or temporary workers
who most often use limited-benefit plans. The full effect won’t be
known until the administration releases regulations that detail how the
provision will be implemented.
http://www.politico.com/news/stories/0610/38219.html