Sunday, March 31, 2013

Woman In Charge Of Obamacare Doesn't Understand How Insurance Works

Has it backwards. 
Kathleen Sebelius, the Secretary of HHS, thinks that catastrophic insurance isn't really insurance at all.  

At a White House briefing Tuesday, Health and Human Services Secretary Kathleen Sebelius said some of what passes for health insurance today is so skimpy it can't be compared to the comprehensive coverage available under the law. "Some of these folks have very high catastrophic plans that don't pay for anything unless you get hit by a bus," she said. "They're really mortgage protection, not health insurance."

She said this in response to a report from the American Society of Actuaries arguing that premiums are going to rise by 32% when Obamacare kicks in, as coverage gets more generous and more sick people join the insurance market.  Sebelius' response is apparently that catastrophic insurance isn't really insurance at all--which is exactly backwards. Catastrophic coverage is "true insurance".  Coverage of routine, predictable services is not insurance at all; it's a spectacularly inefficient prepayment plan.


Anonymous Anonymous said...

Yes, the HHS Secretary is wrong, as these plans may not even pay if you get hit by a bus. I miss being self-employed but not my families $1100 a month health insurance plan with a $22,500 annual deductible. A long term illness would have bankrupted me. McArldle doesn't really understand catastrophic health insurance plans because she doesn't really understand how high the deductibles have become for these plans (especially for families) in relation to income. This is probably because she has never had such a plan and doesn't understand the real numbers. Plus the plans sound great, if you never have to use them. If I had a hospital bill of $20,000 the insurance would pay nothing, so my annual healthcare cost would be $20,000 plus the $13,200 for the annual premiums or $33,200 for the year. (Plus these insurance plans only pay at 80%,or even less, once the deductible is reached). My neighbor works in the payment office of our local hospital and this situation happens every day, and patients are shocked because they didn't understand the implications of the deductible with the catastrophic health care plan. These plans are killers for families (literally).

8:28 AM  

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