ACAP Comment Letter on Proposed Short-Term, Limited-Duration Plan Regulation
As the Administration notes in its proposed regulation, STLDI coverage “is not individual health insurance coverage.” We believe that for this reason, among others, STLDI coverage should not be marketed as an alternative to ACA-compliant coverage, as it simply is not a meaningful alternative. Additionally, the proposed regulation, especially when combined with recent other regulations recently finalized by this Administration, will have a deleterious impact on the individual market single risk pool – thus impacting the business stability for SNHPs offering individual market products.
First and foremost, STLDI plans do not represent meaningful coverage as they may rate based on age, gender, and health status, and deny selected benefits to individuals based on their health status or cost. Such plans also tend to have extraordinarily high deductibles (often well above the ACA-compliant maximum), no annual or lifetime limits for consumers; further, they are not required to follow medical loss ratio (MLR) requirements, and regularly engage in rescissions. The confluence of these factors means that they are focused primarily on profits rather than providing needed care to enrollees. Such skimpy benefit packages will undoubtedly lead to an increase in uncompensated care to boot. STLDI plans offered in recent years have had a medical loss ratio below 50% and/or deductibles of $20,000 for each three months of coverage. Historically, issuers offering such coverage have been notoriously unscrupulous—often rescinding coverage as soon as individuals file substantial claims. This issue continues to remain pervasive, as evidenced earlier this month by a recent $5 million, multi-state settlement by one such STLDI issuer in response to its business practices.
For these reasons, we object to expanding access to STLDI coverage in its entirety. We respond to the specific issues raised in the regulation, with expanded detail, below.View the full article »