Senior Policy Analyst
Update, October 10: we’ve updated this post to include more information about the lawsuit to block the federal rules.
The Senate is expected to vote as soon as today on a resolution to overturn recent federal rules expanding short-term health plans, which are exempt from federal requirements to provide protections for people with pre-existing health conditions. Patient advocates and health care groups supporting the Senate effort rightly argue that expanding short-term plans hurts people with health conditions, leaving them with high costs if they enroll in a short-term plan and then get sick and raising premiums for middle-income people with pre-existing conditions who want more comprehensive coverage.
The rules, which took effect October 2, allow short-term plans to last up to one year (versus three months under prior rules) and be renewed. This will let the market for skimpy short-term plans, at least in most states, operate alongside the market for comprehensive individual health insurance.
Yet short-term plans are exempt from standards for individual health insurance, including protections under the Affordable Care Act (ACA). Short-term plans can deny coverage or charge higher prices to people with pre-existing conditions, and they typically don’t cover medical services related to pre-existing conditions. Also, they don’t have to cover the ACA’s essential health benefits, and they often don’t cover such essential benefits as maternity and mental health care, substance use disorder treatment, and prescription drugs. By providing fewer benefits and covering a less costly population, short-term plans lure this less costly population away from the individual insurance market and leave a costlier group behind — thereby raising premiums for people who need comprehensive coverage.
Companies selling short-term health plans are poised to intensively market the substandard coverage during the six-week open enrollment period for ACA plans, which begins November 1. Short-term plans, however, are available all year.
Some 16 health care organizations, including the American Cancer Society Cancer Action Network, the Leukemia & Lymphoma Society, and the American College of Obstetricians and Gynecologists, have urged support for the Senate legislation, which Senator Tammy Baldwin has sponsored. “We urge lawmakers to intercede and put an immediate stop to the short-term rule while taking steps to stabilize the individual insurance market. Patients with serious and life-threatening conditions cannot afford to wait,” the American Heart Association stated.
Separately, several patient groups and health care organizations have filed a lawsuit to block the rules, arguing that expanding short-term plans violates the ACA. The plaintiffs, which include the National Alliance on Mental Illness and the Association for Community Affiliated Plans, explain that letting short-term plans proliferate will hurt consumers, particularly those with pre-existing health conditions, and let insurers sidestep the ACA’s consumer protections. A number of groups representing consumers and health care providers, including the American Medical Association, the March of Dimes, and AARP filed briefs in support of the lawsuit. “Returning to circumstances where health insurance is unaffordable is a huge step backwards for the nation and an especially dangerous proposition for older adults,” AARP wrote.