Mini-med health plans offer false sense of protection

Senators are criticizing mini-med health insurance policies, saying they offer too limited benefits and provide a false sense of protection from expensive illnesses, according to the New York Times. More than one million Americans hold such policies, which have been under increased scrutiny since the Department of Health and Human Services (HHS) allowed McDonald's to delay for one year implementing limits on medical care spending.

"It's worse than nothing because of the false expectations and the false hope," Sen. Jay Rockefeller (D-W.Va.) said at a Senate committee hearing, according to the Times. Sen. Barbara Boxer (D-Calif.) agreed, calling the mini-meds "sham policies." She added that Congress should ensure that HHS is "shining a bright light" on them until they are made extinct by the health care law, CQ reports.

Additionally, some hearing participants argued workers would be better with no coverage at all since they could redirect their premiums to spending on their medical care, according to the Wall Street Journal. If they are uninsured, they may qualify for deeply discounted or even free charity care from the hospital, which they might not get if they had some kind of coverage, the Times reports.

Senators also criticized McDonald's and the insurers--like Aetna and Cigna--that offer mini-med policies for not always clarifying to employees that these plans will not protect them if they develop an expensive medical condition.

Rich Floersch, executive vice president for human resources of McDonald's, defended the mini-med plans the company offers to its hourly workers. Most McDonald's employees select a plan with a $2,000 annual benefit payout limit, which costs workers $710 a year in 2011, according to the WSJ. Floersch said that if the waiver had been denied it would have been "highly disruptive," forcing McDonald's to go back into the market and find alternative coverage, CQ reports. He added that McDonald's workers knew what they were paying for, according to the Times

To learn more:
- read the Wall Street Journal article
- read the New York Times article
- read the CQ story (reg. required)