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Insurers defend limited-benefit health policies

Kaiser Health News/USA Today, August 13, 2010

The new health overhaul law aims to end all annual dollar limits on health insurance policies by 2014. Federal regulators contend such limits can leave policyholders "virtually uninsured" for the rest of the year once caps are hit. Starting this fall, most healthcare policies — except existing policies purchased by individuals on their own — will have to cover at least $750,000 in medical care per person. That amount ratchets up to $2 million by September 2012. But there’s a catch. Insurers can seek a waiver from the government to keep their current limited plans if they can prove that offering better benefits would cause significant premium increases or force employers to drop or severely limit coverage. That raises a tricky issue for federal regulators trying to write the rules for waivers: How to protect workers from skimpy policies without causing them to lose insurance. Insurers and employers say a generous waiver process is needed to avoid a sudden jump in premiums. But patient advocates warn against being too lenient.