Buyers beware. Low-cost “skinny” health insurance plans may seem like an economical way to save money — that is until you become ill and need to pay for health care.
The Affordable Care Act (ACA) was designed to offer affordable care to those who had previously been denied coverage or who were priced out of affordable insurance by private insurers. Under the ACA, insurance companies would no longer be allowed to deny coverage based on age, gender, or preexisting conditions. The policies would have to cover a broad set of benefits, including prescription drugs, maternity care, and hospitalization.
In a September 12 news release, the Iowa Insurance Division released a statement saying that they had “approved the sale of short-term limited-duration health insurance policies up to 364 days to Golden Rule Insurance Company and United States Fire Insurance Company.”
Marketing themselves as an affordable option to the ACA, these “skinny” plans are able to skirt the ACA provisions which require coverage of “essential health benefits” like maternity care and mental health. The plans, which won’t be regulated by the state, don’t have to offer protections to people with preexisting medical conditions and can implement annual limits on coverage.
Thanks to Iowa’s GOP leadership, these junk health care plans will now be available offering less coverage and the risk of high medical bills if the insured becomes ill or injured. Buyers should be sure they understand what they are signing up for before buying into such plans.