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Good Question: Why Are People Required To Pay For Unwanted Health Coverage?

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(credit: CBS) Heather Brown
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MINNEAPOLIS (WCCO) — Under the new Affordable Care Act, the health plans of almost 140,000 Minnesotans don’t comply with the new law. That’s because many lower-premium plans don’t include benefits like maternity, mental health coverage or prescription drugs that will now be required.

Across the country, that means millions of people’s policies will be cancelled while others might have to pay higher premiums.

In Minnesota, insurance companies can’t cancel existing plans, but tens of thousands of people will have to change their coverage. Many of them will be able to find cheaper, new health insurance through MNSure with federal subsidies, but others will not.

It’s the idea of changes to existing plans that has many people rankled.

It had us wondering: Why are people required to pay for health coverage they don’t want or need?

“One of the principles of the Affordable Care Act is that everybody has good insurance,” said Dan McLaughlin, director of the Center for Health and Medical Affairs at the University of St. Thomas. “When you start pulling apart the insurance, all of the sudden you have inadequate insurance.”

McLaughlin says the idea behind health insurance is to spread the risk. People who are healthy subsidize people who are sick.

“A lot people who bought policies didn’t have mental health coverage, then they had terrible mental health episodes and got into serious financial trouble,” he said.

The Affordable Care Act requires 10 essential health benefits: outpatient care, emergency visits, hospitalizations/surgeries, pediatric care, mental health, prescription drugs, rehab services, labwork, preventative/wellness services, and maternity care.

Some have questioned why a man would be required to have maternity care when he’ll never be pregnant. McLaughlin says that gets to be a slippery slope that gets away from the risk pool.

“You could pick out all of these diseases. I don’t think I like this one, let’s not do that one,” said McLaughlin. “For example, if you’re a woman, you could say I don’t want coverage for prostate cancer because that doesn’t afflict women.”

For many years, women also paid higher premiums due to maternity care.

“I think the Affordable Care Act is trying to even that out,” McLaughlin said.

Dr. Stephen Parente, a health finance professor at the Carlson School of Management, estimates about 20 percent of people who need new policies will see increased premiums.

Others, who are eligible for federal subsidies and buy new insurance policies through MNSure, will likely see the cost of their policies decrease.

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