People who retire early may be tempted to purchase so-called “skinny” health insurance plans before Medicare kicks in because they’re less expensive, but Pennsylvania’s Acting Insurance Commissioner Jessica Altman told an AARP audience in Penn Hills on Wednesday that they should be careful when considering this type of insurance, as it’s not compliant with the Affordable Care Act.
“They can rate or deny you coverage based on your pre-existing condition. They don’t have to cover all the same benefits and we see consumers who end up with these plans get significant bills they weren’t expecting,” said Altman after her presentation.
These non-ACA compliant plans are meant to fill short-term gaps in health insurance coverage, and people who purchase this coverage are still on the hook for the individual mandate penalty. But next year that penalty won’t exist, so people may be more inclined to buy the cheaper options.
The state Insurance Department’s consumer liaison David Buono said people should find out if their skinny plan has dollar caps, covers pre-existing conditions and carries essential health benefits.
“Essential health benefits like hospitalization, ambulance, emergency visits, prescriptive drugs, laboratory services, preventive and wellness visits,” he said. “Think those things through. Some of those plans may not offer that.”
Officials warn skinny plans are sometimes marketed as more generous than they actually are. In the past year, the state said seven insurance agents had their licenses revoked for this reason, and that there are more ongoing investigations.