As part of our ongoing series on health insurance reform, we look at part-time workers with “mini-med” health insurance – plans with very limited benefits and annual caps on payments – who will begin to lose their coverage next month. Such anemic plans are no longer renewable under the Affordable Care Act (ACA, or “Obamacare”). The good news is that after some kinks are ironed out, part-timers should have access to much better and more affordable coverage.
As explained by KaiserHealthNews.org (KHN), mini-med plans are popular among retailers and restaurants because they employ lots of low-wage and part-time workers. The plans generally provide an extremely limited range of benefits, and the subsidies might be capped at only a few thousand dollars a year.
Coverage options for these folks are much better under the ACA, because nearly all plans are required to eliminate lifetime and annual dollar limits on benefits, and they must cover certain medical procedures.
Some businesses that offered mini-med plans said that if they had to conform to the new rules, they would drop the plans, and workers would lose even their minimal protection. So some employers received waivers from the Department of Health and Human Services allowing them to continue offering the limited plans temporarily. Starting in January, they no longer may offer plans with annual benefit caps, but some large employers still may offer plans with limited benefits, often referred to as “bare-bones” plans, or “junk health insurance.”
KHN tells the story of Roberta Grindle. At 62, she worked 16 hours a week at a big box store, and paid $32 every two weeks for the store’s mini-med plan. It was the only coverage available to part-time workers.
She awoke with severe pain in her lower abdomen one morning in October, and drove herself to the emergency department. Doctors performed emergency surgery for a suspected ruptured appendix and discovered a cancerous tumor in her colon. She still needs a second surgery, but has had to delay it until she recovers from an infection.
She reached her $5,000 coverage limit almost immediately.
She doesn’t know how she’ll pay for her medical care, but it won’t be through her employer’s plan.
“I have no idea what exactly it covered, but clearly not much of anything,” she told KHN. “I would have been better off without it.”
Most employers don’t offer part-timers any coverage at all. Only 1 in 4 companies that offered employee health insurance made coverage available to part-time workers in 2013, according to one survey KHN reviewed.
Part-timers who do get employer coverage usually get much less than what’s available to full-time workers.
The ACA requires that employers offer health insurance to employees who work at least 30 hours a week, or face penalties starting in January. But the Obama administration delayed that provision until 2015. That quieted speculation, at least for now, that employers would reduce workers’ hours in order to avoid required coverage, or penalties.
Still, many part-time workers will have more options for better coverage starting next month. If their employer doesn’t offer a health plan, they can shop for insurance on the online marketplaces, and subsidies are available to those with incomes of as much as 400% of the federal poverty level ($45,960 for an individual in 2013).
If they do have access to coverage on the job, part-timers can still shop on the exchanges, but they’ll qualify for subsidies only if the job-based insurance costs more than 9.5% of their family income or pays less than 60% of medical costs, on average.
Part-timers also might be eligible for Medicaid if they live in a state that’s expanding coverage to adults with incomes of as much as 138% of the federal poverty level ($15,856 for an individual in 2013). Because the health law requirement was made optional following a Supreme Court challenge, so far, only half of the states have expanded eligibility, and others are still considering it. To see where your state stands, link here.
Grindle’s Medicaid outlook isn’t good – she lives in Florida, which has not expanded coverage. Her husband, at 67, has Medicare, and their combined monthly income is $2,270 – 175% of the federal poverty level for a couple in 2013.
But with a premium subsidy, Grindle can buy a silver plan on the exchange for about $118 a month. That’s more expensive than what Grindle paid for her mini-med plan, but the coverage is definitely superior. Because the ACA forbids pre-existing health conditions from being a factor, insurers must cover her, regardless of her colon cancer diagnosis.
Grindle still must reckon with the bills she has racked up this year, and has been talking with the hospital about an accommodation. “I’m just not letting it get me down,” she told KHN. “I’m just going to put the bills in a file. What can you do? It’s a shame, because we’ve had excellent credit all our lives.”
This is the sort of sad scenario that should become much less common as the ACA comes into full effect.