Low Cost = Poor Health Insurance?
As we all know or should know, most of the time you get what you pay for. Courtesy of the Sacramento Bee (hat tip to Matthew Holt at The Health Care Blog) comes the story of a couple who claimed they were taken to the cleaners by MEGA Life & Health Insurance Company out of Texas.
The cost of the MEGA health insurance policy David and Darlene Henderson bought, $400 a month, may have seemed reasonable, even attractive, compared to the competition. The Henderson's alleged that the insurance agent assured them they were buying catastrophic coverage that would pay 80% to 100% of their hospital costs up to a million dollars. But when Darlene developed breast cancer and David developed an aortic aneurysm, they found MEGA's coverage was significantly less than they expected. Out of $210,000 in bills, MEGA paid only $33,428.
So the Hendersons sued. A trial judge ruled against them, however, on the straightforward grounds that the policy the Hendersons bought simply didn't call for any greater coverage than what MEGA actually provided. Generally speaking, there is no law preventing insurers from offering terrible coverage for the premium you pay. It may have been true that, as the Foundation of Taxpayer and Consumer Rights stated, the MEGA policy offered "skeletal" benefits with low daily caps on coverage and no out of pocket maximum for the insured. But the trial court ruled that it's up to the consumer to be wise in shopping for insurance.
The MEGA representative lauded the court ruling and said "we work hard to make sure our customers have quality insurance and excellent service at prices they can afford." Perhaps there are folks out there who would be willing to spend several hundred dollars a month for health insurance that provides relatively low daily reimbursement rates and no out of pocket maximums. But how such a policy can fairly be characterized as providing meaningful insurance for "catastrophic" medical expenses is beyond me. Give me relatively high deductibles and copays any day in exchange for the knowledge that once I pay, at most, a few thousand dollars out of pocket I'll have good coverage for medically necessary care up to at least a million bucks. That's coverage that would, in my mind, be meaningful in the event of catastrophic illness or injury.