Affordable premiums, unaffordable care
Washington Post
February 11, 2003
AARP Offers a Plan, but Experts Aren't Buying It
AARP, in partnership with UnitedHealth Group, has launched an insurance plan for people too young for Medicare. Called the Medical Advantage Plan, it's open to people between 50 and 64 who live in any of 10 states.
The two partners call the product "an affordable alternative to major medical insurance." Unlike major medical policies, the plan does not, for example, guarantee to cover all or a certain percentage of hospitalization costs. Instead, the plan pays a fixed amount for a variety of small and large health items: ...up to $7,856 for a coronary-artery bypass operation, and so on.
Marilyn Moon, a senior fellow at the Urban Institute, said she asked a colleague how much the tab was for his recent triple bypass heart surgery. About $80,000, he said -- far more than the AARP plan would pay for such an operation.
"Trying to provide people in this age range" with insurance options "is very important," Moon said, but buying this policy might "lure people into thinking they have a lot of protection." Those with little to spend, she said, "should spend it on major medical [coverage] and not on this." With traditional coverage, she said, at least you "protect yourself from major expenses."
Julie Alexis, AARP's manager of member health products, acknowledged that the plan is "not comprehensive in any way, shape or form," but "we had to make something available [to] people who are going without coverage" because they cannot afford to buy individual insurance or to fully pay for their employer-sponsored group coverage after leaving their jobs.
"They shouldn't call it health insurance," said Karen Pollitz, project director of Georgetown University's Institute for Health Care Research and Policy. "This is a supplement [that] could help you fill in the cost-sharing" demanded by many major medical policies, she said, but if it is your only coverage, "it will not protect you from financial ruin."
Comment: In the individual market for health insurance, premiums increase with age. For people between 50 and 65 who are not eligible for a group plan, finding affordable coverage can be difficult. This AARP/UnitedHealth Group plan demonstrates that products designed with affordable premiums for this age group fail to provide adequate coverage. Those with significant medical needs will face financial ruin in spite of this coverage.
The only way we will ever provide satisfactory coverage for this sector is to include them in a universal risk pool with the rest of us. Why do we keep fighting this inevitable conclusion?