Friday, December 20, 2013

Stupid Government Tricks [UPDATED & BUMPED]

[Please scroll down for update]

From the Now-They're-Just-Making-(Stuff)-Up Department:

So yesterday, with 4 days to go until "The Deadline" (until they change it again, natch), the folks in Capital City have declared that those sub-par plans are okay, after all, at least when they're bought through the Exchange:

"The Obama administration said Thursday it would allow some of the millions of Americans whose insurance policies had been canceled to purchase bare-bones plans next year"

Now, in and of itself, a truly catastrophic plan isn't a bad idea. In fact, it's what a health insurance policy should be: coverage for large, unexpected claims, not every sniffle or paper cut (or birth control pills convenience items). While the mandate is evil, it would at least have been more palatable if it required folks to have at least this level of coverage. And if it were deemed Health Savings Account (HSA) compatible well, then, Bob's your uncle.

Alas, that's not to be.

But there are a few problems with how this is being handled, not the least of which is that it is blatantly, spectacularly illegal.

Here's the relevant section from the ObamaTax itself (emphasis added):
(1) IN GENERAL.—A health plan not providing a bronze, silver, gold, or platinum level of coverage shall be treated as meeting the requirements of subsection (d) with respect to any plan year if—

(i) except as provided in clause (ii), the essential health benefits determined under subsection (b), except that the plan provides no benefits for any plan year until the individual has incurred cost-sharing expenses in an amount equal to the annual limitation in effect
under subsection (c)(1) for the plan year (except as provided for in section 2713);
(2) INDIVIDUALS ELIGIBLE FOR ENROLLMENT.—An individual is described in this paragraph for any plan year if the individual—
(A) has not attained the age of 30 before the beginning of the plan year; or
(B) has a certification in effect for any plan year under this title that the individual is exempt from the requirement under section 5000A of the Internal Revenue Code of 1986 by reason of—
(i) section 5000A(e)(1) of such Code (relating to individuals without affordable coverage); or
(ii) section 5000A(e)(5) of such Code (relating to individuals with hardships).
Seems pretty clear-cut to me.

But in case it's not, the helpful folks who provided training to become certified to sell on the Exchange confirm:
Eligibility for catastrophic plans is limited to:
• Individuals under age 30
• Individuals who otherwise do not have an affordable coverage option, or who otherwise qualify for a hardship exemption to the minimum essential coverage rule
So again, we just throw the actual reg's out the window because they're, well, "inconvenient."

But that's not the only problem. With roughly 84 hours left on the clock - and a weekend taking up most of that - carriers are supposed to price these plans for people aged, oh, 35 or 45 or 55. This, despite the fact that rates have already been reviewed and approved (or not) by the 58 different states' departments of insurance, which will now also have to review and approve (or not), these new rates.

Rostsa ruck with that.

It gets better, though, if by "better" we mean "worse:" what if you've already bought an ACA-compliant policy (hey, it could happen!) but would prefer the less expensive catastrophic plan? The good news is that it appears that you can make this change (or pretty much any other) during the Open Enrollment season. Of course, you'd still be stuck with the old plan for a month, and good luck getting through to, but at least it's an option.


UPDATE: It's also worth noting that - as the ObamaTax legislation is written (not that this continues to have any significance) - Catastrophic plans are not eligible for premium subsidies. So folks who opt for this choice may be in for a rude surprise. And as Bob would remind us, this is another great reason to shop (and buy!) OFF the Public Exchange.
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