Insurers urge subsidies for catastrophic plans

Insurers are pushing the government to provide financial assistance to people buying what are commonly referred to as catastrophic health plans.

In a series of recommendations issued Wednesday at its annual conference, industry trade group America's Health Insurance Plans proposed that subsidies be available to those buying these low-premium, high-deductible plans. During the first open enrollment period, only 2% of the 8 million consumers purchasing plans on the exchange selected one of these options.

That is, in part, because catastrophic plans are not available to everyone. They can be purchased only by people under age 30 or those who have received a hardship exemption under the law.

And unlike for other plans available on the exchange, no subsidies or tax credits are available. That's what AHIP is hoping to change, hopeful that subsidies for these plans would help bring more of the critical 18-34 year-old demographic into the private insurance market.

“We know that affordability, stability and accessibility are top of mind for consumers when it comes to their healthcare,” AHIP President and CEO Karen Ignagni said in a release.

AHIP's proposal would help make these plans more affordable by allowing those individuals and families eligible for premium subsidies to use those subsidies to buy catastrophic plans, thereby presumably lowering their monthly costs compared with even a Bronze-level plan. AHIP also wants to expand the plans' availability to people of any age while still including coverage of the law's required benefits with no annual or lifetime limits and zero cost-sharing for consumers' preventive health services.

Despite the typically lower monthly premiums associated with these plans, the high deductibles may have discouraged the so-called young invincible demographic from picking these up.

Under the current law, a catastrophic plan generally requires that the consumer pay all medical costs up to a certain amount, which is usually in the neighborhood of several thousand dollars. It is essentially a protection from worst-case accident or illness scenarios, although basic preventive care is covered at no charge to the consumer.

Other recommendations coming out of the AHIP on Wednesday include a 30-day transition period for patients who switch health plans or whose provider is not included in their new network and improved transparency tools for patients to get information regarding coverage.

Follow Rachel Landen on Twitter: @MHrlanden



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