By Naomi Lopez Bauman -
According to a recent Crain’s Chicago Business analysis, the cost of some “catastrophic” health insurance plans offered under the ObamaCare health insurance exchange in Illinois actually cost more than the supposedly more generous plans in 13 counties across the state. That should not be surprising as the improperly named “catastrophic plan” offered on the exchange bears little resemblance to catastrophic policies previously offered in the individual insurance market.
A catastrophic plan is an insurance product that is supposed to protect against high-cost, unforeseen medical events. But to comply with the Affordable Care Act’s requirements, catastrophic plans offered on the exchange must cover three primary care visits before the deductible is met, and these plans must provide all of the “preventive” and “essential health benefits” as defined by the law.
Larded up with these government-mandated coverages, there is little distinction between the catastrophic and bronze plans offered in Illinois. Health insurance plans are categorized under four metal options: bronze, silver, gold and platinum. Generally, the bronze plan offers less coverage at a lower price than the silver plan. The silver offers more coverage than the bronze at a higher price, and so on.
The catastrophic plan option was only available to those younger than 30 until recently. In a stunning acknowledgement that ObamaCare exchange plans were, indeed, unaffordable even for the many with a federal subsidy, the Obama administration made an 11th-hour announcement in late December. People who had their plans canceled by ObamaCare regulations (because they were inferior plans, according to the administration) can now temporarily buy catastrophic plans in the exchange.
Like many names used to describe the “Affordable” Care Act, the incorrectly named catastrophic plan is more similar to the bronze plan option than to a true catastrophic policy. But the real ObamaCare catastrophe is that, for many, affordable coverage could previously be had for $77 per month for a young man in Cook County. Under ObamaCare, the starting price is $125.
Naomi Lopez Bauman is Director of Health Policy at the Illinois Policy Institute