The departments of Health and Human Services, Labor, and the Treasury today issued a final rule that will allow consumers to buy short-term health plans to provide coverage for up to 36 months. Insurers could sell plans with an initial coverage period of up to 12 months with the option to renew twice. Currently, these plans are limited to three months or less without the ability to renew. Short-term, limited-duration plans are not required to comply with federal requirements for individual health insurance coverage, such as essential health benefit standards, coverage of pre-existing conditions or the requirement to sell to any consumer regardless of health status. The departments estimate that 600,000 Americans will newly enroll in a short-term health plan under the rule, increasing federal spending on marketplace subsidies by $0.2 billion in 2019 and $28.2 billion over 10 years.
“Today’s final rule will reintroduce to an already shaky individual market health plans that do not constitute true ‘insurance,’” said AHA President and CEO Rick Pollack. “While these products may be appealing because of their cheaper price tag, the reality is that they could end up costing a patient far more by covering fewer benefits and ensuring fewer critical protections, like covering pre-existing conditions. Patients could find themselves responsible for their entire medical bill without any help from their ‘health plan.’ For providers, these products will lead to increased bad debt, with underinsured patients unable to afford the care they need but that is not covered. Increased bad debt will further strain hospitals’ and health systems’ ability to provide a full range of services to their patients and communities, including the most vulnerable. These plans will also undermine the individual insurance market by removing younger, healthier people from the risk pool and driving up costs for those who remain. There are other ways to expand access to affordable, high-quality health coverage, and the AHA continues to urge the Administration and Congress to work with providers, insurers, consumers, states and others to achieve these shared goals, such as: supporting reinsurance proposals, fully funding cost-sharing reductions and increasing outreach and enrollment assistance in the individual insurance market.”