Yesterday, CCF’s guest blogger Aaron Smith of Young Invincibles wrote about some of the problems with so-called “mini-meds” or limited benefit plans. These are products that can’t even be called “insurance” because they provide so little protection to patients – some of them have limits on what they’ll cover as low as $2000 per year.

Unfortunately, for millions of individuals and workers, these mini-med plans are the only option they have for insurance coverage.  In order to make sure these consumers don’t lose access to this minimal coverage, HHS has been issuing temporary waivers that exempt these plans from the Affordable Care Act’s new restrictions on annual limits.  So far HHS has issued 222 waivers to plans with low annual limits, covering over 1.5 million people.

Many consumer and patient advocates, when they first heard about the waivers, were concerned that consumers in these policies wouldn’t have access to the same patient protections as people in more comprehensive plans.  But they also recognized the need to protect people for whom a little coverage is better than nothing.  Unfortunately, many consumers enroll in these plans without realizing how little protection they really provide.  It’s important that any plan getting a waiver from the ACA’s consumer protections notify consumers so that they can understand what they’re buying.

Fortunately, HHS recognized the same thing, and today issued a requirement that any plan getting a waiver must notify consumers about the following:

• The fact that the plan got a waiver from the restrictions on annual benefit limits
• The dollar amount of the annual limit under the plan and any benefits to which the limit applies
• The fact that alternative, more comprehensive options might be available (such as Medicaid, CHIP, or a high risk pool)

This information has to be prominently displayed in the plan’s marketing materials and in informational materials for policyholders.  In order to ensure that the information is conveyed in plain language for consumers, HHS has provided a model notice that all the plans will have to use.

If the last few months have told us anything, it’s that it’s not going to be an easy transition to a reformed insurance market in 2014, when all consumers will have access to adequate, affordable health insurance.  Until then, state and federal regulators need the flexibility to ensure that people are protected from plans that might drop coverage altogether rather than comply with the new rules.  But with that flexibility comes a responsibility to make sure that the rules are transparent, and that consumers have better information about the coverage they have.  This new notice requirement is an important step in that direction.