‘Catastrophic’ health plan: New option no bargain
The Obama administration institutes new rules in the Affordable Care Act that make it easier to get so-called catastrophic health-insurance plans, but in Washington state that option may not necessarily be an affordable deal.
The Seattle Times
Was your plan discontinued?
If your insurance plan was discontinued, here are your options:
• If you live in one of the 21 counties where a catastrophic plan is offered, you can now buy such a plan even if you’re over 30, or go without insurance without a penalty.
• To do either, you must fill out a hardship exemption form and provide documentation showing your plan was discontinued.
• If you signed up for a plan through Washington Healthplanfinder and have made your first payment, you can switch or cancel your plan until midnight Dec. 23. Your payment will be refunded if you cancel.
• If you signed up for a plan through an insurance company or broker, contact them to change or cancel your plan and get a refund.
• If you had a plan outside the exchange and want to move to a catastrophic plan, in addition to filling out a hardship exemption, you must also enroll with the exchange to buy the plan.
• Or, if you’ve selected a plan you like, keep it.
Washington Health Benefit Exchange, Office of the Insurance Commissioner, reporting by Carol M. Ostrom and Lisa Stiffler
Just days before a key deadline for health-insurance coverage, federal authorities changed the rules once again.
The latest change potentially affects more than 227,000 Washington residents whose insurance plans were discontinued because coverage didn’t comply with rules in the Affordable Care Act.
The new rules allow anyone whose health-insurance plan has been discontinued to buy so-called “catastrophic” plans or skip insurance altogether, along with the penalty for not having health insurance by March 31, 2014.
Previously, catastrophic plans were available only to those under 30 or experiencing a hardship.
The change comes as the Obama administration continues its attempts to quell discontent among people whose policies were discontinued — after being assured they could keep them.
The administration earlier asked insurance regulators to allow a yearlong grace period for the discontinued policies. But Washington Insurance Commissioner Mike Kreidler, like his counterparts in several other states, turned down the request, saying such an action could skew the market economics for the new plans because healthy people could be more likely to keep their old plans.
People who have already signed up for a plan through the Washington Healthplanfinder exchange and have made the first payment can switch or cancel a plan until midnight Dec. 23, with the payment to be refunded. Those who bought their plans directly through a broker or an insurer should contact them directly.
But the chance to move to a catastrophic plan might not be the affordable deal some folks are hoping for. By law, today’s catastrophic plans bear little resemblance to the stripped down, high-deductible catastrophic plans of the past.
There are only two catastrophic plans offered in Washington, one through Group Health Cooperative and another through Kaiser Permanente, and they are not available everywhere in the state.
Group Health’s catastrophic plan is available in 19 counties, while Kaiser’s is available only in Clark and Cowlitz counties.
While they’re sold only through the Washington Healthplanfinder, the state’s health-insurance exchange, catastrophic plans are the only exchange plans that are not eligible for a tax break.
That means if you qualify for a tax break to reduce the cost of your insurance, chances are good that a bronze — or maybe even a more deluxe plan — with a subsidy would be cheaper than paying the full cost of a catastrophic plan. Without a subsidy, the catastrophic plans are hardly a screaming deal because premiums, in most cases, closely track with those for unsubsidized bronze plans.
“If you were hoping just to move to a catastrophic plan, there’s not going to be much of a difference for you,” said Eric Earling, spokesman for Premera Blue Cross, which does not offer a catastrophic plan.
Like nearly all insurance policies, catastrophic plans must cap out-of-pocket expenses, including the deductible, at $6,350 per person. They must also cover the 10 essential benefits, which include provisions such as free preventive services, maternity care and prescription-drug coverage.
In King County, for example, there is a bronze plan from Coordinated Care that’s cheaper than the Group Health catastrophic plan, and there are bronze plans from Premera Blue Cross and LifeWise Health Plan of Washington that are only a few dollars more per month.
Group Health’s own “Core Bronze” plan available on the Healthplanfinder exchange site is less expensive than its “Core Basic plus Catastrophic” plan.
But the catastrophic plan, whose deductible equals the out-of-pocket cap of $6,350, covers the first three primary-care visits for no cost.
Melinda Hews, Group Health’s executive director of health-insurance exchanges, said very few people have signed up for the catastrophic plan so far.
“This plan was really designed for people who truly wanted a catastrophic plan,” she said. Some people may decide they likely would need two or three doctor visits a year, she noted, which are covered in full.
“We wanted to make sure people had an option,” she said. “Our hope is that people will take the opportunity to look at all the options available to them.”
Rachelle Cunningham, spokeswoman for Regence BlueShield, said: “These changes are coming quickly, and this is causing confusion and can be disruptive. All we can do is help people understand it and make the right choices.”
The doctors and hospitals covered and the out-of-pocket costs vary among the plans, but strictly looking at cost, a catastrophic plan won’t necessarily pencil out, most observers agreed.
“What is important for folks to know is that there are currently two catastrophic plans available in the exchange, and the price of these plans are coming in higher than the bronze plans,” said Michael Marchand, spokesman for the Washington Health Benefit Exchange.
Carol M. Ostrom: 206-464-2249 or firstname.lastname@example.org.
On Twitter @costrom
Lisa Stiffler, a freelance writer in Seattle, can be reached at email@example.com. This story was produced through a partnership with Kaiser Health News, an editorially independent part of the Kaiser Family Foundation.