At Senate hearing, Democrats blast 'mini-med' insurance policies

Dec 2 2010

The New York Times: "More than a million Americans enrolled in [limited benefit, or mini med,] plans think they have health insurance to protect them from financial catastrophe if they become seriously ill or hurt, [Senator John D.] Rockefeller said. 'In fact, they don't,' he said. 'It's worse than nothing because of the false expectations and the false hope,' Mr. Rockefeller said" at the Senate hearing. However, "administration officials contended that coverage provided by these policies was better than nothing at all, and promised that more comprehensive plans would be available through state exchanges in 2014, when all plans will have to comply with the law" (Abelson, 12/1). 

The Wall Street Journal: "Senate Democrats accused McDonald's Corp. of offering hourly workers a bad deal on health insurance, prompting a strong defense from a top McDonald's executive who disclosed fresh details about the chain's benefits." The hearing "came after McDonald's warned federal regulators the company could drop its health-insurance plan for nearly 30,000 hourly restaurant workers unless regulators waived a new requirement of the U.S. health overhaul dictating how much its insurance carrier spends on medical care" (Adamy, 12/1).

CQ HealthBeat: At the hearing, Rich Floersch, executive vice president for human resources of McDonald's Corp. defended his company's plans "saying they meet the needs of workers who are often part-time and don't work at the restaurants very long. … Rockefeller said the policy most often sold to McDonald's employees has an annual limit of $2,000. 'What will $2,000 cover in our health care system? Not much,' he said. … The mini-med plans received little attention during the health care debate but have emerged as a flashpoint in implementation of the law. The waivers granted by HHS have annoyed supporters of the law, such as Rockefeller, and has prompted Republicans to say the waivers show the law is too expensive for businesses to bear. HHS officials say they were trying to ensure that no American loses health care coverage as a result of the law" (Norman, 12/1).

Reuters: "The plans will be phased out when subsidies and new coverage options provided for in this year's new health law come online in 2014. The law prohibits plans from setting annual and lifetime spending limits after that point. … The Department of Health and Human Services finalized the spending rules, known as medical loss ratios, last week. Mini-med plans have a one-year grace period while the Obama administration decides how to treat them." Senator Barbara Boxer "said during the hearing that mini-med plans often mislead consumers about the level of coverage offered" (Stephenson, 12/2).

Related, earlier KHN story: New Law's Health Insurance Regulations Could Mean Rebates For Consumers (11/22)

The Hill's Healthwatch Blog: In advance of the hearing, the National Retail Foundation "warned that 1.4 million Americans will lose their coverage if mini-med plans are eliminated." The Obama administration "has created a 'fair' waiver process for restrictions on annual benefit limits and created a methodology to help plans meet new MLR standards in 2011, [NRF Vice President Neil] Trautwein said" in a blog post (Millman, 12/1).