Thursday, December 4, 2008

Insurance for your health insurance?

At first, we* thought it was a story from The Onion, that paragon of parody. But no, this was the venerable New York Times, telling us that one insurance company, UnitedHealth Group, was planning to offer a new product: an insurance policy covering your right to buy insurance.

Honestly, we couldn’t make this stuff up.

As the President of UnitedHealth explains, “What this product is designed to do, for a very modest premium, is to essentially protect your insurability for the future.”

To be clear, the product is not health insurance. It’s more like a bribe. You’d be paying the insurance company now – 20 percent of the annual premium, at that – just for the right to purchase their policy later, if you lost your job or retired early, for example.

Sound like a great deal? Well, no. But it’s actually even worse than it sounds at first. If you’re sick and need to be sure you have coverage, you probably can’t buy this plan. And if you’re healthy enough to buy it, but get sick later, you may not be able to afford it when you need it.

This is coming at an interesting time, when both ends of Pennsylvania Avenue are buzzing with talk of comprehensive health care reform that would include a broad expansion of health coverage. So the fact that UnitedHealth is offering this product inherently implies that they are betting against reform – and they’re asking consumers to do the same:
"Some advocates for changing the health insurance system say that rather than expecting individuals to spend hundreds of dollars a year for a guarantee they may not need, the government should do more to make sure everyone has access to coverage."
In an economy where it’s hard enough to afford rising premiums, is it really fair to entice consumers with product that capitalizes on people’s fear of losing their health coverage some time in the future? Doesn’t seem like it. Especially when the prospects of reform look so good that even the health insurance lobby wants a seat at the table.

*Full disclosure: I posted this on another site this morning and wanted to share it here as well.

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