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Letter to Sen. Harry Reid from the YIWC coalition Re: Catastrophic Coverage in the Senate Bill

November 24, 2009

Senator Harry Reid
Majority Leader
528 Hart Senate Office Building
Washington, DC 20510

Dear Senator Reid,

Thank you for your relentless work for health care reform and leading the Senate into the floor debate over a bill that will expand coverage and lower costs for millions of Americans. On behalf of the millions of young people our organizations represent, we appreciate your support for provisions that address the health needs of young people, including the Medicaid expansion and dependent age coverage up to the age of 26. These provisions and premium subsidies will help over ten million of the nearly 19 million uninsured young adults pay for comprehensive insurance.

However, we are very concerned with the inclusion of catastrophic plans in the Senate bill. Even after the Medicaid expansion, the expansion of dependent age coverage, and other affordability provisions, there will still be millions of young Americans left without real access to comprehensive health care. The Senate bill attempts to address this affordability gap by making catastrophic plans available to Americans under the age of 30 and anyone with premiums in excess of eight percent of income. These plans would provide only preventive screenings and allows for three primary care visits before an onerous deductible of $5,950 is met. These types of plans create unexpected financial hardships due to high out-of-pocket costs, have a negative effect on long-term health and discourage necessary care while providing windfall profits for insurance companies.

The catastrophic plan in the Senate bill would be nothing more than insurance in name only and would be a disservice to millions of young and low- and moderate-income Americans who will be forced into a false choice between this plan or no insurance at all. Indeed, the exemption that allows adults with premiums in excess of eight percent of income to either buy this plan or forgo insurance altogether is an implicit recognition that this bill does not go far enough to ensure affordability for all Americans. As such, we urge the Senate to remove the catastrophic option and instead expand affordability provisions essential to providing comprehensive coverage for all Americans.

If changes to the final bill do not sufficiently address affordability concerns, we urge the Senate to improve the current catastrophic plan to include reasonable pre-deductible coverage, reduced out-of-pocket costs and consumer protection provisions to provide a valuable low-cost option for young and low-income individuals. (We know such an approach is possible: Massachusetts, for example, has adopted a Young Adult Plan with reasonable minimum standards that provides an affordable option.) Specifically, we are asking that any low-cost option provided by the Senate bill should cap deductibles at $2,000, out-of-pocket expenses at $5,000, and mandate a minimum actuarial value of 55%. Pre-deductible coverage, with reasonable co-pays, should include a broad range of preventive and primary care, including regular doctor visits, gynecological visits, chronic case management and a prescription drug option. The plan should also include consumer protections such as a minimum medical loss ratio, limits on provider price-hikes for the underinsured, and a guarantee that these plans will only be sold on the exchange. All of these measures will ensure that young Americans do not get enticed into buying plans that offer little benefit and little protection for their long-term health and financial security.

Young Americans are not invincible. We get sick. We suffer from accidents. We start families. We need regular care. As the most uninsured age group in the country, the health care crisis is our crisis. And we voted in the last election, in record numbers, for real, comprehensive change to our current health care system.

We look forward to working with you and your colleagues to address these concerns.

Thank you again for your leadership and for standing with young Americans at this critical time.


The Y.I. Want Change Coalition

Advocates for Youth
Bus Federation
Campus Progress
Choice USA
College Democrats of America
Daily Get Up
Forward Montana
Future Majority
Generational Alliance
Rock the Vote
Roosevelt Institute Campus Network
Student PIRG
Young Democrats of America
Young Invincibles