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ObamaCare Clusterfuck: Supplemental private insurance emerges to cover the high out-of-pocket costs of ObamaCare's insurance

I suppose I should have predicted this:

As out-of-pocket medical costs grow for many Americans, the insurance industry is offering a way to help and, at the same time, expand its business: by selling supplemental policies that may fill the gaps for consumers.

The policies are promoted as helping cover out-of-pocket expenses that can reach thousands of dollars in plans offered by employers and the health law’s online marketplace.

"These supplemental health products have been recently — and we believe will be in the future — one of the fastest growing components of the employer benefits market," said Todd Katz, an executive vice president with MetLife.

Some experts, however, see risk for policyholders in the lightly regulated plans, which tend to be highly profitable for insurers and might be mistaken for more generous coverage.

Just when you think the hilarity can't get more intense, eh? ObamaCare not only guarantees the health insurance parasites a market, it's so poorly designed -- or so well designed -- that it opens up whole new markets for them! You can insure yourself against ObamaCare's crappy policies if you buy a second, additional, crappy policy! It's GENIUS!! Only a satirist of, say, Jonathan Swift's calibre could come up with an appropriate response. But wait! He did!

The Siphonaptera
So, naturalists observe, a flea
Has smaller fleas that on him prey;
And these have smaller still to bite 'em,
And so proceed ad infinitum.

"Siphonaptera," I love it. I'm going to try calling bloodsucking rentier parasites Siphonaptera every chance I get.

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Rainbow Girl's picture
Submitted by Rainbow Girl on

Is the blueprint of Medicare. If you can't afford Supplemental Medigap policies you can't afford Medicare (unlimited out of pocket for hospital and doctor care; RX donut holes, out of network care not covered, etc etc etc).

That's all it is -- and yes, its a rococo multi-layered scheme to loot money by making you pay so you can pay so you can pay ... it's a Xeno's paradox though, because you just keep paying to pay and never quite get to collect the service/product that all the paying is supposed to get you.

Paying for the privilege to pay for the privilege to pay for the privilege ... but no service. And no product.

Nice work for the "private" sector if you can get it (with a little help from Uncle Sam and Obama, funneling our money to the "private" sector).

Rainbow Girl's picture
Submitted by Rainbow Girl on

Holy Toledo. But of course (slaps forehead). This is ghoulish. Consistent with the idea that the .01% are consuming the 99.9%. And yet another doorway created by Obama with his Private Partners to put US citizens on the receiving end of shyster bottom-feeder debt collection, then bankruptcy, then bad credit report, then jail.

Alexa's picture
Submitted by Alexa on

but is 'newer' as part of an employer-sponsored benefit package.

Even unions (what a disgrace!) have bought into this concept. It seems to me that they should be fighting this trend, tooth and nail.

APWU, AFLAC Offer Benefit to Help Protect Members' Families Against Medical Catastrophe

And directly from the AFLAC website:


Actually, I've had (which I wouldn't recommend) a Supplemental Cancer/Specified Disease Policy which was issued when I was a teenager, because my Mom insisted on keeping it.

Anyhoo, after the ACA was signed, Mr A's company started offering several "supplemental" policies--covering out-of-pocket hospital costs, cancer, long-term disability, catastrophic illness (specified with a payout schedule--a REAL rip-off), etc.

And BTW--these are NOT group offerings--meaning, they are NOT subsidized in the least!

His company simply includes these policies in their brochure of benefits.

It's up to the employee to deal directly with their "supplemental" insurer, if they wish to take out a policy.

Again--you're "on your own."

At one time, his corporation paid for long-term disability insurance. But a while back, they dropped that coverage--offering only company-paid STD (short-term disability).

{Sigh . . .}

P.S. News Flash!

Just heard that the Administration has announced that they will allow small businesses [with fewer than 100 employees] another one-year exemption from providing group health insurance.

And I read not long ago that this is not intended only to "appease" this group or constituency (small employers), but to garner more votes from the "rabble."

IOW, this will likely throw more people into the network of Health Exchanges.

So, this move will hopefully (from the Administration's perspective) 'serve up' more young people, which would be helpful regarding the Exchange premiums for 2015.

And/or, more lower income people would likely benefit from the federal subsidies (which they do NOT under employer-sponsored insurance plans), which may help the "favorability ratings" of the ACA before the election(s).

Gotta give our corporatist Dems credit for one thing--they're always "one step ahead" when it comes to manipulating their Base!

Alexa's picture
Submitted by Alexa on

Last time I"ll quote the "Associated Press."

Here's what HuffPo says:

Obamacare Employer Mandate Is Delayed For Some Companies

. . . The Treasury Department announced Monday that companies with 50 to 99 employees have an additional year to comply with the coverage mandate, until January 1, 2016.

For businesses with 100 or more employees the requirement will still take effect in 2015. . . .

Under the law, companies with fewer than 50 employees don't have to offer coverage.

Alexa's picture
Submitted by Alexa on

A "gift" in today's directive.

(1) Beginning January 1, 2015, only have to cover 70% of employees the first year;


(2) 95% of employees, thereafter (2016 and later).

I don't get it!

It is as though Dems TRULY DON"T WANT TO SEE all US citizens receive health care.

Why on earth would the final figure, which "throws away" 5% of the population, be acceptable?

(Again, assuming AP got this report correct, LOL!)

Roman Berry's picture
Submitted by Roman Berry on

These are not "supplemental health insurance" plans they are talking about here. What they are talking about is cash benefit plans, and the one thing about cash benefit plans is that they are always and everywhere likely to be an utter rip off in terms of benefits received for premiums paid. A lifetime ago I was in the insurance business, and these "cash for covered hospital stay or illness" plans were among the scummiest products in our portfolio, and management pushed and pushed for us to sell them because they are highly, highly profitable for the company. In fact, it was after one of the managers on a "training ride along" talked a poor family into dropping their actual health insurance in order to buy one of these plans that I couldn't take it any more and quit for a more honest line of work...selling used cars. (That comes off like a joke, but it's 100 percent true.)

Alexa's picture
Submitted by Alexa on

but I agree that what your manager did was immoral.

And maybe illegal, considering the fact that licensed agents/brokers bear a fiduciary responsibility to safeguard their customers’ best interests by acting ethically.

Sounds almost like life insurance 'churning.'

After I pull my cancer policy, I'll briefly elaborate on this type of product and its coverage.

The policy that I was issued was 'worth keeping,' for a couple of reasons.

However, from what I've observed at a glance in Mr A's annual open season insurance packet, today's equivalent policies definitely don't stack up to the policies offered when this product first came on the market (i.e., when mine was purchased for me as barely a teenager).

IOW, we generally discount these types of insurance. (Mr A was an insurance/ securities broker and a certified financial planner 'in another lifetime,' also.)

An aside, we spend time in Tennessee every year since we have relatives there. So I know a fair amount about the state politics, there.

I've already posted on the way that the DLC Democratic Governor Phil Bredesen decimated their TennCare program.

What I don't believe that I mentioned was that they had the audacity to offer supplemental catastrophic plans in a State Insurance program to the several hundred thousands of very ill 'uninsurables' thrown off the TennCare rolls. It may have come to either replace (or supplement) the state 'High Risk Pool.'

Now, that should have been illegal, since by implication, many less savvy beneficiaries might have believed that this product was a suitable "replacement" for actual health insurance.

So, "thanks, Roman Berry," for pointing out that this type of policy, generally-speaking, does not 'deserve' to be called a supplemental insurance policy.