Coverage Issues: Some People Have Too Little While Others Have Very Generous Plans

Health reformers are confronting two challenges that seem to conflict: Those with no insurance, and those with very generous coverage. Twenty-somethings have the highest uninsured rate of any group, with roughly 1-in-3 lacking coverage, TIME magazine reports. These "young invincibles" run the obvious risk of an unforeseeable illness or serious accident interfering with their otherwise good health.

But, "Young people's willingness to forgo insurance, it turns out, is a major problem for the entire health-care system, which needs them on the rolls to help spread out risk and keep older Americans' premiums from going even higher." To curb the problem, lawmakers are crafting plans that would allow insurers to market bare-bones policies with low premiums, high deductibles and preventive care coverage to young adults. Those who don't buy in, would face fees up to $950 a year, just a bit less than the cost of coverage (Pickert, 9/22).

On the other end of the spectrum, some policyholders have costly "Cadillac" plans, which are "usually defined by the total cost of premiums, rather than what it might cost the patient to get health care," Kaiser Health News/NPR reports." Cadillac plans usually have low deductibles and excellent benefits that cover even the most expensive treatments, "but this is not always the case." Some with this coverage face high rates due to age, location, health status and other factors – critics say the most generous plans "encourage overuse of medical care."

A proposal to tax the plans with premiums higher than $8,000 for individuals and $21,000 for families would both raise revenue to expand coverage and discourage the plans, effectively working to lower medical costs. There are concerns however, that the tax will hurt middle-class people. If health costs continue to rise much faster than inflation, more and more plans would be subject to the tax (Gold, 9/22).

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