The future of ‘mini-med’ health plans

The upside is that you pay only a small price for health insurance – about $700 per year.

The downside is that the coverage is thinner than a runway model. Once your medical expenses surpass $2,000, your insurance stops – and you pay 100 percent of any bill.

Such are the specs for one health plan that McDonald’s offers its hourly workers. The company has other plans with $5,000 and $10,000 benefit ceilings, at a higher price. All these are called “mini-med” or limited benefit plans, and are common among retailers.

These plans fall far short of comprehensive health insurance, because any hospitalization or medical emergency could put you in a financial sinkhole for years. “They really don’t meet the needs of most people,’’ says Bill Custer, a health insurance expert at Georgia State University. “They don’t cover serious illnesses.’’

Yet for many low-wage hourly workers in retail industries, the plans may be their only shot at coverage.

Mini-med plans have been thrust into the spotlight this year during the implementation of health care reform. The health care law is phasing out annual spending limits, which now aren’t allowed to drop below $750,000. That’s a hefty difference from the McDonald’s $2,000 plan. And there are reform requirements that health plans spend at least 80 percent of the premium dollar on medical care.

So what happens when these plans collide with the new health reform law? GHN’s Straight Talk on Health Reform feature answers a reader’s question on how these mini-med plans are faring under the Affordable Care Act. Consumer Corner also has new features on protecting your credit scores from medical bills and the creation of a consumer product safety database.