Junk health insurance
Stingy plans may be worse than none at all
Consumer Reports magazine: March 2012
It might seem to be health insurance, if you don’t look too closely, and most people don’t. The premiums are surprisingly affordable. And so millions of unemployed people, service industry workers, and those taken in by fast-talking telemarketers sign up. They may think they’re insured—until they have a medical problem and find out that their coverage is as skimpy as a hospital gown.
The Affordable Care Act was supposed to usher in a new era of consumer-friendly health care. For instance, insurers are no longer allowed to put outrageously low limits on the amount they pay out for medical care in a year or lifetime.
While millions of Americans have benefited from that and other reforms, many are still prey to the kind of skimpy “junk” plans the new law was designed to eliminate. Some plans, known as mini-meds, are operated by employers and brand-name insurance companies with special dispensation from the federal government. Others, such as health discount cards and fixed benefit indemnity plans, from companies you’ve probably never heard of, are so meager that regulators don’t consider them to be health insurance at all—though that’s frequently not clear to consumers. And some of the companies operate one step ahead of the law.
Cheap Health Insurance - Consumer Reports