Beware of ‘Junk Health Plans’

We�ve all heard about how junk food can be bad for our health. Now it seems, �junk health plans� can be bad for our pocketbook (and maybe our health as well). In a report published in its March 2012 issue, Consumer Reports is warning Americans to be wary of so-called mini-med plans that are �legal but inadequate.�

Mini-meds are increasingly offered by big companies with lots of employees as a benefit that most workers are eager to get. �But in reality, these plans are extremely limited in their coverage. The problem is that many consumers don’t know how to judge the merits of a health plan so they get sucked in,” says Nancy Metcalf, senior program editor, Consumer Reports, and the author of CR’s “Ask Nancy” Blog on health insurance. “But if they have a catastrophic illness or accident, they’ll quickly realize their coverage is hopelessly inadequate.”

As with most purchases, if a health plan is way cheaper than the competition, it�s usually cheaper for a reason.

CR also points out: �Other misleading products include fixed benefit indemnity plans and medical discount cards, which are aimed at people who don’t have employer group�insurance, not even a mini-med.�If you’ve ever received a fax or robo-call or seen a late-night TV ad offering affordable health insurance, it was most likely for one of these products.�

“This is an excellent report,” said Jonathan Weiner, professor of health policy and management at Johns Hopkins Bloomberg School of Public Health, told ABC News. “It’s great to see a clear discussion about these type of plans. They are not well-understood or widely publicized.”