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Limited Medical Plans: What's the Next Step?

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I must be honest: I never expected to be on the same side as the Obama administration in the midst of a limited medical (aka mini-med) health care argument — but not very long ago, that’s exactly where I found myself. In a recent hearing on limited medical plans put together by Senator Rockefeller, administration officials contended that mini-med coverage was better than no coverage at all. This I agree with. That said, it’s about where our common ground starts and stops.

Meeting a need

I am a firm believer that limited medical insurance does work for many people. It’s certainly helped hundreds of thousands of Americans by providing them with valued benefits and access to our health care system. Like so many other U.S. inventions, it is a product that was created to meet a need in our society.

The hearing was held to question the waivers for medical loss ratios and annual limits that have recently been filed. These waivers fly in the face of the original intentions of PPACA, but when confronted with the very real fact that people are losing coverage (accompanied, most likely, by some heavy lobbying from mini-med companies), the administration buckled.

If you’re reading this article, then hopefully you’ve read some of the important information we’ve provided over the past few months about the future of limited medical plans. Remember, PPACA only impacts one type of limited medical plan: the expense-incurred kind. Fixed indemnity limited medical plans continue to operate outside of the regulatory scope of PPACA — and are helping thousands of working Americans receive benefits and coverage. The plans are stable, provide a clear picture of what is and is not covered and are not subject to the cloud of uncertainty that exists when you are enrolled in the expense incurred (also called coinsurance-based) plans that are currently in the spotlight.

The fixed indemnity backup plan

Today, many groups are facing rate increase because limited medical plans subject to PPACA cannot add new business and are uncertain about how they will manage costs associated with meeting the Act’s requirements. If your clients are concerned about significant rate increases or filing issues, you would be well served to find a solid home for their limited medical business. This is true even if they were successful getting a waiver on the first go-round. Waiver or no, the product faces many uncertainties, especially with the laser-sharp focus of the government on these plans.

So, it’s time to implement a backup plan. HHS has a long way to go, and more regulation could impact other plans. Rest assured, however, that there is much we do know — and numerous ways for us, the benefits community, to provide value to our customers. Why worry about future uncertainty when there are better, less controversial options available today?

Brian Robertson is executive vice president of Fringe Benefit Group, which markets and administers the Framework Health Plan. Contact Brian at (800) 551-3424 or [email protected].