'Junk Insurance' vs. 'Junk News' at the NY Times

Taking a short break from Russian collusion stories, the New York Times is pivoting from Trump bashing to hitting Senate Republicans over their efforts to repeal and replace ObamaCare. In a recent article, the NY Times criticizes Ted Cruz’s proposal allowing insurers to sell bare-bones policies that don’t meet the ObamaCare policy standards, or essential benefits. According to the Times, these policies are “junk insurance”.

Not to be confused with “junk news”, a staple of the NY Times, Washington Post and other major newspapers, these so-called junk insurance policies are simply scaled-down coverage, allowing individuals to pay lower premiums for less generous insurance coverage. What a novel concept.

Given exponentially rising insurance premiums, it makes sense to offer lower-cost alternatives to consumers. In my state of Colorado, individual insurance premiums are expected to rise 27 percent next year. This is not a once in a decade premium increase. Instead premiums have been rising by double digit percentages each and every year since ObamaCare was signed into law. So much for our premiums going down, as we were famously promised by Barack O and many others.

This is not like Amazon Prime, maintaining the same price for nine years, then finally increasing its fee by 25 percent, catching up with inflation. Suppose Amazon Prime raised its price by 25 percent each year as is happening in the insurance market?

The Times article cites an example of a woman who purchased such a “junk policy” before ObamaCare was implemented. The policy paid for limited doctor visits and covered her hip surgery but not her post-surgery physical therapy, crutches, or post op medications.

Not mentioned is what she paid for her insurance policy. I suspect it was significantly less than the $400 per month she would pay now for an individual policy under ObamaCare, or $1000 per month for a family policy. Also unmentioned is that she chose a less expensive plan rather than a policy with more generous benefits, and higher premiums, that existed before ObamaCare became law. No one forced her to choose her policy.

Why did she choose a bare-bones policy? As the Times notes, “Healthy, younger people would most likely gravitate to the cheaper policies, believing they do not need the more comprehensive and expensive coverage.” That’s called “choice”. A concept the NY Times feels quite strongly about when it comes to other aspects of and decisions regarding medical care, namely reproductive health. Why doesn’t “choice” extend to other aspects of healthcare such as insurance? The article doesn’t answer that either.

Other industries offer less expensive alternatives for consumers. Look at United Airlines. When they aren’t dragging passengers off planes, they offer “basic economy” fares. Less expensive and with fewer niceties: no seat selection or upgrades. No group or family seating. No carry-on luggage. No flight changes or refunds. Last boarding group.

“Choice” for passengers who don’t want or need these extras for their flights. Paying less in exchange. Much like the woman in the Times article choosing a less generous insurance policy for a lower monthly premium. Her choice.

She likely didn’t anticipate needing hip surgery but that is the gamble one takes when purchasing insurance. The United flier may not anticipate having to cancel his flight or having to fly with one of his children, with the potential of not getting a refund or not sitting with his child. But that’s the risk he accepts in exchange for the lower fare.

That’s what insurance is. Payment now to mitigate potential future financial risk. I don’t anticipate my house burning down but I carry homeowner’s insurance to protect me from financial devastation should this occur. I could choose to forgo the insurance but the gamble and consequences of a bad bet are on me, not the insurance industry or the government. And I can’t first purchase insurance when my house is already on fire.

That’s the Ted Cruz amendment, allowing insurance companies to offer lower cost, lower benefit policies for those who want to exercise “choice” in how to spend their money and what financial risk they are willing to accept. Rather than forcing people to buy insurance they neither want or need, as a means of subsidizing the insurance industry and government for the cost of insuring the less healthy.

United Airlines doesn’t force anyone to fly basic economy. The government doesn’t prevent United from offering such discount fares. Pay your money and make your choice. If basic economy is too spartan, fly regular economy, or premium economy, or first class. Again, individual choice.

The Cruz amendment also requires insurers to still offer ObamaCare-compliant plans, meaning the more generous and costly plans are available for purchase for those consumers who want them. The amendment would also allow insurers to factor people’s health in determining whether to insure them and at what cost.

So? That’s the norm for all other types of insurance. Try getting life or disability insurance without submitting a medical history, having a physical exam, and getting a bunch of blood work. If the information is unfavorable, the company may not offer a policy or else price it according to future health risk.

Ted Cruz is not forcing anyone to buy what the NY Times calls “junk insurance.” Rather they are giving consumers a lower-cost alternative to ObamaCare policies that have become unaffordable to many. Why is “choice” in matters of one’s personal health suddenly a bad thing? Isn’t it better that Americans have some insurance, rather than none, the latter being the only choice if they can’t afford an ObamaCare plan.

The Times should remember the old axiom, “One man’s junk is another man’s treasure.” For someone who can’t afford sky high ObamaCare premiums and chooses to accept more risk for a lower premium, the Cruz amendment is treasure.

Brian C Joondeph, MD, MPS, a Denver based physician and writer. Follow him on Facebook, LinkedIn and Twitter

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