Even If You Pay Your ObamaCare Fine, You Won’t Be Able To Choose Your Own Health Plan

According to Sarah Kliff, the Administration has made…”a decision that industry officials say could trigger yet another wave of cancellation notices.”

The administration is targeting a type of coverage called fixed benefit or indemnity insurance, which give patients a fixed sum of money whenever they visit the doctor or land in a hospital.

The new rule would mainly affect people who had chosen to pay the individual mandate, or who were exempt from the mandate, and who bought a fixed-benefit plan as a stopgap. The Obama administration is saying that they can’t do that unless they also buy a more comprehensive plan.

Comments (17)

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  1. Devon Herrick says:

    I wonder what’s to prevent them from buying an indemnity policy based offshore? Of course, enforcement of the agreement could be problematic.

    • John R. Graham says:

      I think enforcement is the problem. No broker would be licensed to sell it. But so what? We live in an online world.

      Why doesn’t, e.g. a clever insurance entrepreneur lobby the government of the Canadian province of Ontario to amend its insurance code to allow insurers domiciled there to write indemnity policies in the U.S.? If the insurer refused to pay, a U.S. policy-holder could go to court in Toronto.

      This hardly seems like a Wild West market. The institutional re-insurance market is an offshore market. Perhaps the retail market is not big enough. Can any industry experts weigh in?

  2. Perry says:

    You HAVE to have insurance, and you HAVE to have what we tell you to. Seems very heavy-handed to me.

  3. Matthew says:

    “The Obama administration is saying that they can’t do that unless they also buy a more comprehensive plan.”

    Then why would they allow people to initially sign up for this to satisfy the individual mandate? If this was supposed to be supplemental, they should have left being so and not allowed them on the exchange.

    • Thomas says:

      I think regardless if you like your plan or not, they will change so much that no one will be able to keep their existing plans for more than 1 or 2 years.

      • Matthew says:

        At least the government identified the high risk that these plans entail, but either don’t offer them as available coverage or let people keep it. It really is that simple.

  4. Walter Q. says:

    “On their own, they’re not comprehensive coverage that protects people against risk,”

    Why can’t people be responsible to protect themselves from risk. We don’t need the government watching over us like a hawk at all times.

    • Bill B. says:

      Especially in terms of our health care. I want the government out of both my bedroom and my hospital bed.

      • Walter Q. says:

        Once we accept ObamaCare into our lives, there will just be something else in our personal lives that the government will invade.

  5. Jay says:

    “The first are people who want to fill a gap in coverage after purchasing a high-deductible plan on the insurance exchange.”

    How about just put affordable coverage without any gaps on the marketplace? Is that too much to ask for?

    • Buddy says:

      This is the federal government we are talking about here. Of course it is too much to ask for.

  6. M.Gertler says:

    Oh no…they cut all possible approaches…

  7. Bob Hertz says:

    Indemnity policies are a problem. ObamaCare is like a broken clock, it might be right two times a day.

    The problem is simple: what if an indemnity policy pays $1500 a day for hospital care, but the hospital charges $4500?

    The patient is no better off than if they had no insurance. In fact, they may be worse off because they had to pay every month for weak insurance.

    The solution is simple in concept, although it would be very hard to pass in Congress. The solution is some form of mandatory assignment. If the patient has a policy for $1500, the hospital has to accept $1500 with no balance billing.

    The $4500 bill goes IN THE WASTEBASKET.

    You would need a regulation that the indemnity policy must have at least as much of a benefit as Medicare would pay. A $25 policy would not cut it.

    This is not so awful for hospitals as it sounds. They very rarely collect the $4500 anyways.

    We waste enormous paperwork and emotional anguish while hospitals usually decide to forgive the $4500. Why not limit their collections ability in the first place?

    Bob Hertz, The Health Care Crusade

    • John R. Graham says:

      That is a very good point. We’ve discussed crazy hospital prices on this blog.

      But I suggest it is not the indemnity policy itself that is the problem: It is the hospital pricing.

      One problem is Medicare, which has rules on giving patients discounts below Medicare fees. Hospitals have to overcharge and then write off to navigate those rules.

      As always, my bias is that fixing the hospital pricing problem should be done by the states, not Congress.

      Also (as written on this blog), I have a bias towards a common-law solution, rather than regulation, to improve the situation.