*UPDATE – In a highly anticipated July 7th release, the Centers for Medicare & Medicaid Services proposed a rule that would enhance consumer protections surrounding short-term, limited-duration insurance (STLDI) plans. The new measures aim to roll back the Trump administration’s 2018 expansion of the plans, which allowed for these lightly-regulated plans to stand in for comprehensive coverage.
In a statement, ACAP CEO Margaret A. Murray supported the new actions saying, “This regulation sends an unequivocal message: junk insurance is no substitute for the real thing.”
The regulation is open for public comment through the beginning of September.
Short-term, limited-duration insurance (STLDI) plan rules implemented during the previous administration expanded the duration of “junk” plans from three months to up to three years, changing them from stopgap plans to an illusory “alternative” to health plans that offer comprehensive coverage and play by the rules.
Short-term plans continue to threaten and undermine consumer protections for people with pre-existing conditions. They can deny coverage or charge more based on age, gender or health status. They can exclude services like maternity or mental health; impose unlimited deductibles; reimpose annual or lifetime limits on insurance benefits; and not pay for treatment of a pre-existing condition. To stop the expansion of these plans, seven health organizations filed suit in the U.S. District Court for the District of Columbia on September 14, 2018 to invalidate the STLDI plan rule.
The current rule violates the plain-English meaning of “short-term” by defining it as 364 days instead of three months, as currently allowed, and the meaning of “limited duration” which it defines as up to 36 instead of 12 months. The rule arbitrarily reversed previous limits on these plans to create an “alternative” to ACA-compliant plans that Congress did not authorize. That violates the law as set forth in the ACA by effectively undercutting plans that comply with the ACA and making them increasingly unaffordable and unsustainable for consumers who have nowhere else to turn.