Annual limits on how much insurance policies will pay for a patient's care are being phased out under federal health reform, an oft-touted benefit.
The law now requires insurers to cover at least $750,000 in care. And come 2014, the law eliminates annual caps altogether giving consumers some comfort that their health plan will see them through major illness or injury.
But the new protections don't yet apply to hundreds of mostly low-wage workers in Utah whose employers currently offer very limited health coverage, or "mini-med" plans.
Nationally 1,471 insurers, trade unions and employers such as McDonald's and Ruby Tuesday have secured mini-med waivers from the U.S. Department of Health and Human Services, which will allow them to continue to offer inexpensive health policies that can max out after covering as little as $2,000 in medical costs.
Among them are six based in Utah, including retailer Sportsman's Warehouse, nursing home operator 24-7 Long Term Care and the teachers union Utah Education Association (UEA) which only requested the waiver as a temporary option for new hires.
The waivers are a remedy to complaints from large employers such as McDonald's, which warned regulators last year that shouldering the expenses of richer health benefits would force it to drop coverage for tens of thousands of hourly workers.
Employers defend their bare bones plans as the only affordable solution, arguing some insurance is better than none. About 3.2 million Americans workers and their dependents fall into such plans, or 2 percent of all the privately insured.
The UEA offers mini-med plans as a stop gap for newly hired public school teachers who, in some districts, must wait 90 days before their health benefits kick in, said union spokesman Mike Kelley.
Waivers only last through 2014, when mini-med plans may cease to exist. That means future coverage is uncertain for some workers who earn too much to qualify for low-income health insurance through Medicaid.
Some may be eligible for tax subsidies to purchase more comprehensive policies on health exchanges. Or employers could find new ways to restrict coverage through limited doctor visits, prescriptions or hospital stays.
"Hopefully, there will be a permanent solution. There are lots of mini-med programs out there now. Something has to take their place," said Robert Condie, CFO of Bountiful-based 24-7 Long Term Care, a chain of seven nursing homes, including Lomond Peak Care and Rehabilitation in Ogden.
The chain offers its workers health benefits that top out after $25,000 in medical costs. Condie said none of his workers' costs have exceeded the cap, and raising it to $750,000 would cost $1 million.
"I'd like to provide better coverage for myself and my employees. But there isn't a solution out there," said Condie.
"It's not just us who can't afford it, it's our employees. We only charge them $40 a month but would have to bump that to $200 to $300 a month."
Six Utah-based trade unions and employers have secured exemptions from federal health reform requirements that policies now cover at least $750,000 in care. Reform will eventually eliminate all annual caps that insurance plans impose.
Maverik Inc., North Salt Lake • 794 employees
Utah Education Association, Murray • 127 new teachers
Sportsman's Warehouse, Midvale • 1,034 employees
24-7 Long Term Care Inc., Bountiful • 152 employees
Eighth District Electrical, Salt Lake City • 137 beneficiaries
Painters and Associated Trades Health and Welfare Trust Fund, Salt Lake City • 146 beneficiaries