Limited Benefit Insurance: It’s Becoming Respectable
I have become increasingly intrigued by limited benefit insurance (covering primary care, but not hospitalization), even though it does the opposite of what most health policy wonks think insurance should do. See my previous posts here, here and here.
Blue Cross now offers a discount card to Florida residents. Its Web site lists likely savings on procedures. Blue Cross also has a limited benefit insurance plan, as does Aetna – which primarily markets it to employers with part-time and seasonal workers.
Pro Medical Plan, another insurer, charges $52 per month (individuals) and $130 (families). In return, people get "primary-care doctor visits for $10 and cheap basic lab tests at a variety of locations in Miami-Dade and Broward, plus a discount card for such things as specialists, pharmacy and vision."
What I like is that these products solve two big problems that are not solved, say, by Medicaid or SCHIP: (1) They offer access to primary care other than at public health clinics and emergency rooms and (2) they introduce price competition (and, therefore inevitably quality competition) into the primary care marketplace.
AHIP (the health insurance trade group) has just released their plan for health care reform and it has a mandate for catastrophic insurance — precisely the opposite of the approach taken by the limited benefits policies.
Remember the results of the RAND study done a few years ago and referred to at this blog on several occasions. Basically, once people get into the system (see a doctor) they get essentially the same care, regardless of the type of insurance they have and regardless of whether they have insurance at all.
So the most important kind of insurance is the type that gives people lots of primary care options — giving them the greatest chance to initially enter the system.
It is not clear that catastrophic insurance is important at all.
Catastrophic coverage offers a way to protect assets. If you don’t own anything, then I suppose it’s reasonable to try to screw the system.
The B.C. discount card sounds intriguing. A way to take advantage of negotiated rates regardless of health status?
Bart, if I have no assets to protect how am I screwing the system by not buying insurance to protect assets I don’t have???
What am I missing?
Ken, if you have limited-benefit insurance and no assets, and then suffer a catastrophic illness, who ends up paying for for your care?
Well, it’s well intentioned but at the same time, insurance should cover you ONLY for a catastrophe. Not for primary care – that should be paid through and HSA