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Copper could be the next new thing in health insurance

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If you’ve been working with health insurance over the past year, you already are familiar with the four “metals”: platinum, gold, silver and bronze. Those metals signify the levels of coverage in plans available on the health insurance exchanges.

It’s possible that a new metal, “copper,” could enter the mix.

Kaiser Health News reports insurers and some U.S. senators have proposed a skimpier level of coverage called “copper” could be offered on the exchanges in the future. The purpose of offering copper coverage would be to give another option to uninsured people who are struggling to pay the premiums for the lowest level of coverage.

But some consumer advocates say that even if the copper plans have rock-bottom premiums, the trade-off is that those covered under those plans would face higher out-of-pocket costs in the event of illness. So maybe those plans would not be such a bargain after all.

“It’s a false promise of affordability,” Sabrina Corlette, project director at Georgetown University’s Center on Health Insurance Reforms, told Kaiser Health News. “If you ever have to use the plan, you won’t be able to afford it.”

The copper proposal has been put forth by America’s Health Insurance Plans (AHIP) and a group of senators led by Sen. Mark Begich (D-Alaska). The copper plan would pay 50 percent of covered expenses, on average, and would be eligible for tax credits to offset the premium.

The idea is to attract young and healthy enrollees who are balking at the cost of health insurance, as well as to give another option to those who still haven’t bought coverage.

Because the proposed changes would require congressional action and because plans for the 2015 open season are already being set up, the earliest any of these new plans could be implemented would be 2016, said Karen Ignagni, AHIP president and chief executive.

Will more people be persuaded to buy coverage if a lower-priced option is made available? Statistics from the U.S. Department of Health and Human Services (HHS) cast some doubt on this. The lowest-level plan available this year, the bronze plan, was selected by only 20 percent of enrollees, HHS said. Two percent bought catastrophic policies. Silver plans were by far the most popular, selected by 65 percent of purchasers.

A plan that meets the health law’s coverage requirements but reduces the proportion of medical expenses insurers pay to 50 percent would require a deductible of about $9,000 per person, according to the Kaiser Family Foundation. Currently, deductibles for exchange plans can generally be no higher than $6,350 for individual coverage, the maximum out-of-pocket spending limit allowed under the law.

Affordability continues to be a major objection for those who haven’t yet signed up for coverage, according to surveys. Enroll America, a health insurance advocacy organization, reported that 48 percent of those who didn’t try to enroll said the No. 1 reason was the fear that they couldn’t afford coverage.

Perhaps copper would be an option for those who can’t afford a more precious “metal.”

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Susan Rupe is assistant editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Connect with Susan →

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