In September, seven organizations filed suit in the U.S. District Court for the District of Columbia to invalidate the short-term, limited-duration insurance (STLDI) plan rule issued last month by three federal agencies. The plaintiffs include:
– Association for Community Affiliated Plans (ACAP)
– AIDS United
– American Psychiatric Association (APA)
– Little Lobbyists
– Mental Health America
– National Alliance on Mental Illness (NAMI)
– National Partnership for Women & Families
They were joined in early October by a number of groups filing amicus curiae briefs in support of the lawsuit. Among the organizations participating in such filings:
– AARP Foundation
– American Academy of Family Physicians
– American Academy of Pediatrics
– American Cancer Society
– American Cancer Society Cancer Action Network
– American College of Obstetricians and Gynecologists
– American College of Physicians
– American Heart Association
– American Lung Association
– American Medical Association
– American Osteopathic Association
– Cystic Fibrosis Foundation
– Epilepsy Foundation
– Global Healthy Living Foundation
– Hemophilia Federation of America
– The HIV Medicine Association
– Leukemia & Lymphoma Society
– March of Dimes
– Medical Society of the District of Columbia
– National Coalition for Cancer Survivorship
– National Multiple Sclerosis Society
This rule will harm patients and their families as well as others in the health care system by undermining access to quality, affordable coverage, will significantly disrupt insurance markets in states across the country, and threatens to bring back abusive practices that harm consumers specifically prohibited by the Affordable Care Act (ACA).
The groups argue in their complaint that the final rule violates the plain-English meaning of “short-term” by defining it as 364 days instead of three months, as currently allowed, and “limited duration” as up to 36 instead of 12 months. The plaintiffs also argue that the rule arbitrarily reverses previous limits on these plans to create an “alternative” to ACA-compliant plans that Congress did not authorize and that violates the ACA by effectively undercutting ACA plans and making them increasingly unaffordable and unsustainable for consumers who have nowhere else to turn. As such, the plaintiffs believe that the courts will agree that the rule is unlawful.
The rule expands the availability of discriminatory, inadequate short-term “junk” plans, which can: set higher premiums based on age, gender, and health status, deny access to basic benefits, undermine catastrophic protections, deny coverage for any pre-existing condition, and increase uncompensated care for health care providers. Expansion of short-term plans also threatens people’s access to quality coverage. Middle-income families with comprehensive coverage will see their premiums increase while limited, medically underwritten plans lure healthy people out of the quality plans that include consumer safeguards. Such plans are not subject to mental health parity nor the non-discrimination rules that protect people with conditions like HIV/AIDS. Additionally, rushing sale of short-term plans will undercut health plans that play by the rules and will confuse consumers when they are signing up for 2019 coverage starting on November 1, 2018.
Examples of the real-world consequences of these “junk” plans cited in the complaint include:
– A woman in Illinois went to the hospital with heavy vaginal bleeding resulting in a five-day hospital stay and a hysterectomy, only to be denied coverage under her short-term plan on the ground that her menstrual cycle constituted a pre-existing condition.
– A man in Washington, D.C., purchased a short-term plan with a stated maximum payout of $750,000; when he sought coverage for a $211,000 bill resulting from a hospitalization, however, he was paid only $11,780, in part due to a denial of coverage based on his father’s medical history.
This page provides source documents in the lawsuit.