The Joys Of Minimum Coverage

1 comment June 22nd, 2008at 01:36pm Posted by Eli

Well, this is vile but unsurprising:

Unlike the heavily regulated group insurance market, advocates say the individual insurance market is rife with “junk insurance” policies that provide minimum benefits, such as hospital-only coverage, and don’t set limits on out-of-pocket expenses.

Advocates say it’s often impossible to determine what a plan does or doesn’t cover, and some consumers – like Mary McCurnin and Ron Bednar of Rancho Cordova – find out too late after they run up thousands of dollars in medical costs.

Sen. Darrell Steinberg’s Senate Bill 1522, which is sponsored by the consumer advocacy coalition Health Access California, would standardize the individual insurance market and limit out-of-pocket expenses.

Health plans would be split into five tiers to allow consumers to compare prices and better understand what they were buying.


Health Access cites families like McCurnin and Bednar, self-employed graphic designers, who purchased a policy from Mid-West National Life Insurance Company of Tennessee.

McCurnin and Bednar said they paid a monthly premium of $600 for what they thought was comprehensive coverage. But in 2002, after she was diagnosed with breast cancer and he had open-heart surgery, they learned otherwise.

Their plan covered only 10 percent of his hospitalization, and the company rescinded her coverage because she didn’t disclose on her application that she was given a prescription for an anti-depressant years ago that she never filled.

With more than $250,000 in medical bills, the couple filed for bankruptcy protection and now face the loss of their home.

“Health insurance companies will do everything they can not to cover you,” McCurnin said. “Having good (individual) health insurance is a myth.”

Donna Ledbetter, a spokeswoman for Mid-West National Life Insurance, said federal law prohibits the company from commenting on the case.

“(But) we are confident that defined-benefit health plans have a place in the insurance market and provide value to those who would otherwise have no coverage at all,” Ledbetter said.

Nicole Kasabian Evans, a spokeswoman for the California Association of Health Plans, said SB 1522 will increase health care costs and the ranks of the uninsured.

“By making health plan products fit within narrow boxes with strict benefit requirements, this bill could take lower-cost options off the table for consumers,” Evans said.

Yes, because every American should be entitled to pay $600 for health insurance that doesn’t actually cover anything and can be summarily withdrawn for the merest technicality.  I don’t know what we would do if the government took that privilege away from us.

And here I thought that the point of health insurance was not for the sole purpose of allowing you to say that you have health insurance (i.e., those godawful “minimum coverage” car insurance commercials that seem to air every fifteen minutes), but so that you could actually get medical care without going bankrupt.  Silly me.

As a side note, one of my first thoughts when Hillary and Obama started talking about using “mandates” to impose universal healthcare rather than making it available through single-payer, was that it would create a huge market for just exactly this kind of bogus “junk insurance.”  Everyone can say that they’re insured, Democratic president gets to say that they’ve given us universal healthcare, insurance companies collect billions of additional dollars without having to provide any actual coverage – everybody wins!

(h/t Elliott)

Entry Filed under: Corruption/Cronyism,Healthcare

1 Comment

  • 1. Cujo359  |  June 23rd, 2008 at 12:11 am

    Won’t the health system be so much better when we’re all required to buy insurance from people like this just so we can go to a hospital when we’re bleeding to death?

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