Obamacare’s Junk Insurance Problem: How to Avoid Costly Surprises

The Affordable Care Act (ACA) has made health insurance more accessible to millions of Americans. However, as the post above highlights, there are still some problems with the system, including the presence of “junk insurance” carriers.

What is Junk Insurance?

Junk insurance is a type of health insurance that offers minimal coverage and has a history of denying claims. These carriers often use aggressive marketing tactics to attract customers, but they fail to deliver on their promises.

How Junk Insurance Affects ACA Subsidies

The ACA provides subsidies to help low- and moderate-income families afford health insurance. These subsidies are based on the cost of the second-lowest-cost health plan available in the state.

In states where junk insurance carriers offer low-cost plans, the subsidy amounts are artificially low. This is because the ACA calculates the subsidy amount based on the cost of the junk insurance plan, even though that plan may not be a viable option for consumers.

How to Avoid Junk Insurance

If you are shopping for health insurance on the ACA exchange, it is important to be aware of the potential for junk insurance. Here are some tips for avoiding these carriers:

Check the carrier’s rating with the Better Business Bureau (BBB). A low rating is a red flag.
Check the carrier’s financial stability. A financially shaky carrier is more likely to deny claims.
Read the plan documents carefully. Make sure you understand what the plan covers and what it does not cover.
Talk to your doctor. Ask your doctor if they accept the insurance plan you are considering.

If You Have Junk Insurance

If you already have junk insurance, you may be able to switch to a better plan during the next open enrollment period.

Here are some additional tips for dealing with junk insurance:

Keep a record of all your interactions with the insurance company. This will help you document any denied claims or other problems.
File a complaint with the state insurance commissioner. This can help pressure the insurance company to resolve your issue.

Conclusion

Junk insurance is a serious problem that can make it difficult for consumers to afford the health care they need. By being aware of the signs of junk insurance and taking steps to avoid these carriers, you can protect yourself from costly surprises.