Today the Trump administration issued a final rule allowing insurers to sell “short-term, limited-duration” health insurance policies that can last up to three years instead of the maximum allowable three months under current rules.
In the rule, administration officials contort their words to explain what otherwise looks like an alternative fact:
“This final rule recognizes the role that short-term, limited-duration insurance can fulfill, while at the same time distinguishing it from individual health insurance coverage by interpreting ‘short-term’ to mean an initial contract term of less than 12 months and implementing the ‘limited-duration’ requirement by precluding renewals or extensions that extend a policy beyond a total of 36 months.”
But behind these somewhat comical linguistic gymnastics lie some very real dangers for patients, especially those with chronic health conditions. Short-term, limited-duration health plans are not considered “health insurance” under federal law, and as a result, they do not have to comply with the Affordable Care Act. In fact, these plans look a lot like the often all-but-useless private health plans that littered the individual market before the ACA reined in predatory and discriminatory insurance industry practices.
These plans can vary premiums based on age, gender, health status, and medical history. They can also deny coverage outright based on pre-existing conditions, refuse to cover any treatment for a pre-existing condition, or find ways to rescind your policy after you’ve incurred a claim.
The other ways they keep their premiums down is by offering bare-bones coverage in the first place. They usually exclude coverage for critical health services that consumers have come to expect their policies to cover. A recent study looked at short-term health plans sold in the Charlotte region and found that most of them didn’t cover benefits for prescription drugs, mental health services, or substance use disorder treatment. Not a single short-term health plan studied covered maternity care whatsoever.
A return to the pre-ACA days of health insurance is a return to the days of lifetime and annual limits on coverage. UnitedHealthcare’s Golden Rule Company, which offers short-term plans in North Carolina, imposes a per-person lifetime limit on covered benefits of $250,000 for many of its three-month plans. Asa result, any enrollee who develops a terminal or chronic condition or who has a premature child is left unprotected from catastrophic costs.
In a press release, U.S. Health and Human Services Secretary Alex Azar says, “These plans aren’t for everyone, but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system.” Even if that were true, allowing these policies to last for up to three years at a time creates an alternate market to the ACA in which insurers will market heavily to young and healthy enrollees, dupe them into buying bare-bones coverage with lower premiums, and ultimately make premiums for full-benefits, comprehensive coverage more expensive for the older and sicker enrollees who remain in ACA-compliant market. This isn’t about providing options—it’s about undermining the Affordable Care Act.