Mini-med health plans are "junk," and individuals should avoid them entirely, according to a new report published in the March issue of Consumer Reports magazine.
Big insurers like Cigna and Aetna offer mini-med plans, which provide limited benefits and coverage and high deductibles, primarily to large retail and food service employers, reported ABC News.
"The problem is that many consumers don't know how to judge the merits of a health plan so they get sucked in," Nancy Metcalf, report author and senior program editor for Consumer Reports, said. "But if they have a catastrophic illness or accident, they'll quickly realize their coverage is hopelessly inadequate."
Although the health reform law prohibits mini-med plans come 2014, the federal government provided thousands of waivers, making these policies available for the next two years through at least 50 insurance companies, including Cigna Starbridge (265,000 enrollees), Aetna SRC (209,423), BCS Insurance (115,000) and American Heritage Life Insurance (69,945), according to Kansas City InfoZine.
Defending the mini-med policies, Robert Zirkelbach, spokesman for America's Health Insurance Plans, said states often use these plans to expand coverage for uninsured individuals. "For many seasonal, part-time, and temporary workers, these types of plans are their only source of affordable health care coverage," he said. "If employers are no longer allowed to offer these plans, many workers could lose the coverage they have today."
Aetna said that, although it recognizes "limited benefit plans are not for everyone," the limitations are labeled clearly on the first pages of the plan's summary, noted ABC News. "In the current marketplace, however, limited benefit plans continue to meet a critical need for people who may otherwise not have access to, or be able to afford, health insurance."