Expanding Short-Term Health Plans Will Gut Consumer Protections & Hurt Children and Families
By Stephani Becker and Kathy Waligora
Get sick on the weekend? Catch an injury playing a sport? Have a pre-existing condition? Need mental health treatment?
As Los Angeles Times Columnist Michael Hiltzik recently reported, short-term health plans might not have you and your loved ones covered. Yet in their latest attempt to sabotage the Affordable Care Act (ACA), the Trump Administration is considering federal regulations that would drastically expand the sale of these junk plans. Nationwide, this could threaten access to healthcare for millions of families and children, while also leaving them just one emergency away from financial catastrophe.
Take Sam from Chicago, for example. Sam bought a short-term, limited duration insurance (STDLI) plan upon the advice of a broker. He was diagnosed with cancer soon thereafter. It turns out that he had undiagnosed back pain that then became a pre-existing condition. So, not only is Sam now battling cancer—but also trying to fight almost $1 million in bills because his plan denied all of his claims.
Currently, STDLI plans are designed to fill temporary gaps in coverage, like when someone is in a waiting period for coverage through their employer. As such, they are limited to cover consumers for just three months, and typically exclude coverage of pre-existing conditions, cap the dollar amount of benefits that a person can receive from the plan, and omit many of the essential health benefits that the ACA requires plans to cover—including maternity care, prescription drugs, mental health treatment, and substance-use disorder services.
These plans were never intended to be used as a replacement for quality coverage—yet that is exactly what the federal government is trying to do. Earlier this year, the Department of Health and Human Services proposed a rule that would extend the allotted duration of STDLI plans to 364 days and allow for reapplication, effectively opening them up as an unregulated alternative to the ACA’s individual marketplace.
After failing at a complete legislative repeal, this should be read as a backdoor attempt to gut the key consumer protections ushered in by the ACA.
And similar to outright repeal, a broad scale expansion of short-term health plans would be disastrous for families and children. It would directly threaten the quality of coverage for millions of people throughout the country, leaving them exposed to discrimination based on age, gender, or a preexisting condition, as well as massive medical debt—just like Sam. What’s more, by enticing younger, healthier patients to leave the individual marketplace, these plans will also cause premiums to soar for everyone else.
How can advocates fight back?
Over 9,000 individuals and organizations, like ours, have submitted federal comments against the proposed regulations, detailing the damage that would be done if the regulations were finalized.
Meanwhile, at the state level, several governments already have laws on the books that limit the expansion of STLDI plans, while five others are considering similar measures. In Illinois, for example, the Protect Our Care – Illinois coalition is currently advancing legislation that would, among other things, curb the sale of short-term plans, while also requiring insurers to include clear warning disclosures in their sales and marketing materials.
Indeed, as is the case on other fronts, like the push to impose so-called work requirements on Medicaid recipients, state level advocacy can be a key terrain in combating the federal government’s harmful health agenda.
Everyone should have access to high-quality, affordable healthcare coverage. It’s crucial to ensuring that children grow up healthy and do well in school, that parents can pursue work and other opportunities, and that families have the peace of mind that, when they need to access care, they won’t face financial ruin for doing so.
If expanded, short-term junk plans would not deliver on any of those goals. Instead, they threaten to send us back to the days before the ACA, when purchasing individual health insurance could be a lot like navigating the Wild West.
A version of this was first published at the Sargent Shriver National Center on Poverty Law’s blog.