‘Bare bones’ insurance policies really only work for people who are healthy
Before the Affordable Care Act, insurance companies could offer any combination of benefits in most states and legally call them a health insurance policy. A huge deductible? Coverage for only one night of hospitalization? Nothing for maternity care, mental health or medication?
If consumers were willing to buy such “bare bones” plans — and some people did, usually at very low prices — those policies were considered health insurance coverage.
“If they sold you a policy that covered [only] a toothbrush, that qualified,” said Karen Pollitz, senior fellow at the Kaiser Family Foundation.
The ACA did away with that, mainly by requiring that all health plans on the individual and small-group market include certain “essential benefits” for everyone: prescription drugs, lab services, even maternity care, to name a few.
Now Texas Sen. Ted Cruz (R) wants to again allow insurers to sell whatever bare-bones coverage they desire and consumers to purchase it. To qualify, insurers would just have to offer one plan that complies with the ACA’s comprehensive benefits standard.
It may sound good in theory — free markets and freedom of choice — and
it’s an idea that has long been popular with conservatives. But experts say insurance simply doesn’t work this way, and the “Cruz amendment” would unleash destructive forces for individuals without employer-sponsored coverage as well as for the system.
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