Some people are now suggesting that the country should make health insurance plans more affordable for moderate-income and high-income people by creating a new class of “copper level” individual health plans.
In theory, the plans would appeal to healthy, budget-conscious people by covering just 50 percent of the actuarial value of the essential health benefits (EHB) package.
In the real world, the plans would pretty much require any intelligent people who bought them to also buy accident insurance, hospital indemnity insurance and other supplemental health insurance products that are, for the moment, excepted from the scope of Patient Protection and Affordable Care Act (PPACA) major medical coverage requirements.
That could create great opportunities for the supplemental products issuers, and also grave dangers.
A copper plan would appeal mainly to workers who have incomes over 400 percent of the federal poverty level and don’t qualify for a premium subsidy, or workers with incomes over 250 percent of the federal poverty level, who don’t qualify for PPACA cost-sharing reduction subsidies and don’t qualify for a particularly attractive premium subsidy.
On the one hand, the copper plans certainly would protect healthy young people who don’t qualify for the premium subsidies or the cost-sharing reduction subsidies against health care catastrophes. The relatively high-income young people who paid for copper level coverage would also get “no cost” coverage of the PPACA basic preventive services package.
But, on the other hand, let’s face it: The real beneficiaries of the copper plans would be insurers and providers that want to take healthy young adults’ money without giving them any significant protection against pneumonia or broken legs.
Assuming that the government and insurers would discourage providers from waiving cost-sharing bills, or that the providers themselves would resist that, copper coverage holders would find that breaking an arm would be as much of a financial catastrophe as having a heart attack or a brain tumor.