States considering protections, regulations on short-term plans

Both Washington and California have begun the process of taking action against short-term medical plans.

The Trump administration has proposed increasing the duration of these plans from 90 days to 364 days, and to have guaranteed renewability. Short-term medical plans do not have to comply with ACA requirements. The plans can deny coverage for pre-existing conditions, are not recovered to include essential health benefits, and can impose lifetime limits.

Washington State Insurance Commissioner Mike Kreidler announced he will begin rule-making to create regulations for short-term medical plans.

Washington State Insurance Commissioner Mike Kreidler expressed his concerns about the short-term plans:

“Allowing short-term medical plans to infiltrate our health insurance markets is not the panacea the Trump Administration promises. It’s just one more devastating step in dismantling the consumer protections we’ve come to rely on. Short-term medical plans may sound good to those who do not understand how health insurance works. The promise of lower premiums and fewer mandatory benefits may be appealing, but here’s what’s left in the small print – they also offer little protection if you get sick and need comprehensive care.”

I seriously question the president’s misguided belief that the only way to provide less expensive health insurance is to do so at the expense of those of us unlucky enough to get sick or who have a health condition. I will use my authority to prevent these skinny plans from destabilizing Washington’s health insurance market.”

The comment period for the rule-make ends on March 22nd.

California goes one step further, with the legislature considering a bill to prohibit insurers from issuing, selling, renewing, or offering a short-term plan beginning January 1, 2019.

The bill, introduced by Senator Ed Hernandez, is currently in the Senate Health Committee.

California Insurance Commissioner Dave Jones also criticized President Trump’s proposed action:

“Today, the Trump Administration took another action to erode the protections of the Affordable Care Act and put the individual health insurance market in jeopardy by proposing a change to federal rules regarding limited duration health plans. The proposed rule would extend the maximum length of time someone can be covered by one of these plans which often exclude coverage for preventive health care and many essential health benefits, while also lacking consumer protections for those with pre-existing conditions, and lack annual or lifetime dollar limits and guaranteed renewability of ACA compliant coverage.

This Trump Administration proposal is another attack on the integrity of the nation’s health insurance markets, as it would permit skimpy health plans, without the benefits required under the ACA. This Trump proposal would leave a family exposed to high medical costs and medical bankruptcy just when they need health coverage the most. Further, this proposal would act to transform the existing ACA market into a high-risk pool by siphoning off consumers with lower health risks into skimpy plans. The Trump Administration admits that their plan will degrade the risk pool for ACA plans, raise premiums in state exchanges, and increase costs to the federal government. I oppose the Trump Administration proposal to offer consumers health plans that cannot be relied upon to cover essential health services when people need them most and will result in higher premiums for people who maintain their ACA coverage.”