Now, there has been a lot of threads about the Health Care Reform Act lately, which gave me an idea of how to take advantage of certain facets of the law. The HRA mandates people get health insurance, or they have to pay a fine, whoops, I mean tax. The law also prevents health insurance companies from denying people for pre-exisitng conditions.
Checking some calculators available online, it seems that the paying the fine is a fair bit cheaper than buying insurance, and I bet that the insurance companies will be able to raise premiums at a faster rate than Congress and the President will be able to raise the tax. So over time more people will find it fiscally advantageous to pay the fine and only get insurance if something serious comes up.
Of course, those people are in for a world of fiscal hurt if some rare event happens, like a sudden accident, or heart attack, or cancer that needs chemo right now. Of course, protecting against rare events that are individually catastrophic is where insurance works best. Now, this is where my business idea comes in - offer insurance that offers cash payouts to the injured/sick person, to tide them over till they can get “real” health insurance.
This sort of insurance would actually end up being similar to the accident/critical illness insurance offered by AFLAC & other companies, so maybe this would just be a new marketing angle for them, but if this sort of insurance + HRA tax is cheaper than buying “real” health insurance, I could see quite a few people going for it. And the brilliant part of this product is that the more people chose to buy this insurance + pay fine, the more healthy people it takes out of the “real” health insurance market, making the competing product more expensive.
So, am I off base that accident/critical illness insurance + fine is cheaper than what the “real” insurance will be? I have run a few quotes for myself, and it works out to be slightly cheaper for me, but it might not be for everyone. And is there any law against a business offering this sort of coverage?