Stingy health insurance plans may be worse than none at all

Health care reform was supposed to make it so everyone could get decent health care coverage at a reasonable cost. But a Consumer Reports investigation finds some so-called "affordable" insurance policies may offer little or no protection.

The Affordable Care Act of 2010 is supposed to give us better protection and more health care options, but it's still being implemented in stages and a lot of people are unwittingly signing up for health insurance junk.

Judith Goss was stunned to learn the health insurance she'd paid for through her retail sales job wouldn't begin to cover her breast cancer treatment, expected to cost some $40,000.

"I cried. And my mom was with me," she said. "And my uncles offered to pay for a lot of my, you know, my bills and things."

Goss had a so-called mini-med plan from Cigna, which had low premiums but would only pay up to $2,000 toward her surgery and hospitalization.

"These mini-med plans are offered through jobs," said Nancy Metcalf with Consumer Reports. "If you are offered one, our advice is not to take it if you have any other option, including public programs like Medicaid."

Right now, mini-med plans like Goss' are legal, but they're supposed to be phased out by 2014. You can spot them because they carry this warning: "Does not meet the minimum standards required by the Affordable Care Act."

"Another type of coverage you should avoid is something called a fixed indemnity plan, which is easy to mistake for traditional health insurance," Metcalf said.

Indemnity plans may be marketed and priced as if they're major medical insurance, but Consumer Reports says don't be deceived.

"Indemnity plans will only pay out a fixed amount every year, no matter how sick you get, Metcalf said. "And they often don't cover important things like drugs, lab tests, or chemotherapy at all."

So it's critical to thoroughly read any policy you're considering, as Goss found out the hard way.

And since a medical crisis can cost hundreds of thousands of dollars, make sure the plan you pick, actually provides the coverage you need.

Whenever possible, consult with an independent insurance broker who represents multiple companies, for advice on the best policy for you. And steer clear of affordable health insurance offers pitched by fax, robo calls, the internet and late night TV.

More information:
Check out Consumer Reports for more details and links on what to look out for when buying health insurance.
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