As healthcare costs climb, a growing number of Americans are turning to catastrophic insurance plans, which cover only severe health emergencies. Iowa Representative Mariannette Miller-Meeks has voiced support for this shift, suggesting it could promote healthier living habits.
“If you had a health savings account or individual health plan, you purchase your insurance for catastrophic, then there is an incentive for you to adopt behavioral patterns or health practices that actually lower cost and keep you healthier,” Miller-Meeks stated on the 13th and Park podcast earlier this month.
These catastrophic plans, occasionally labeled as “junk insurance”, typically feature high deductibles and minimal premiums, only covering significant illnesses or injuries like cancer or fractures. Routine healthcare services, such as doctor appointments and most prescription medications, are not included.
Miller-Meeks emphasized that deductibles and copays encourage individuals to have “some skin in the game,” potentially motivating them to engage in healthier activities like exercising or quitting smoking.
The surge in catastrophic plan enrollments is partly attributed to the lapse of Affordable Care Act (Obamacare) tax credits, which had made monthly premiums affordable for 22 million people. Rising costs of food and housing have further accelerated this trend.
Earlier this month, Miller-Meeks opposed a bipartisan proposal to extend these credits for another three years. Instead, she advocated for her own bill, aiming to abolish the credits and have the federal government subsidize some out-of-pocket expenses for lower-income participants.
According to the Congressional Budget Office, Miller-Meeks’ legislation might reduce premiums by as much as 12%, yet most individuals would still save less compared to the previous credits. An estimated 100,000 Americans might choose to decline insurance due to the increased costs.
Both Miller-Meeks’ proposal and the tax credit extension have passed in the House. However, neither is expected to progress in the Republican-led Senate.
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