Insurance Commissioner working on rule for short-term medical plans

Earlier this month the Office of the Insurance Commissioner released a stakeholder draft of its proposed rule on short-term limited duration medical plans in response to anticipated federal changes.

Senior Health Policy Advisor Jane Beyer provided an update on the rule at the OIC’s health policy round table meeting yesterday.

The short-term medical plans are exempt from ACA provisions and do not fall under Washington State’s legal definition of a “health plan.” Because of these exemptions, short-term plans do not have to cover pre-existing conditions or the essential health benefits. Annual and lifetime limits are allowed, there is no minimum medical loss ratio, and preventive series without cost-sharing are not required. Short-term plans can also refuse to cover customers.

The Trump Administration is currently working one a rule to expand the duration of short-term plans from three months to 364 days, with the opportunity for renewal.

Beyer explained that “there is a legitimate need for these plans” but they should not be structured in a way that would create an alternative, parallel market to the Exchange. These plans are necessary in instances when someone is waiting for their employer provided coverage to begin or have a few months before becoming Medicare eligible.

The stakeholder draft released by the OIC specifics that short-term plans must:

  • Provide major medical coverage
  • Limit any pre-existing condition look-back period to 24 months
  • Only offer three months of coverage
  • Be non-renewable
  • Cannot result in a consumer being covered for more than 3 months in a year
  • Cannot issue plans during open enrollment for coverage beginning the next year

Consumers would also have to sign a disclosure form stating they are aware of other insurance options through the Exchange and understand the terms of the short-term plan, including what services and conditions are covered, and the maximum amount the plan will pay.

These plans also could not be canceled or rescinded except in cases where the consumer does not pay their premium or commit fraud.

Comments on the stakeholder draft are being accepted until June 26.

The majority of the submitted comments stress the need for consumers to understand the terms of coverage and for the short-term plans to truly be short term to prevent creating a high-risk pool and raising premiums on the exchange.

Premera’s comments suggest changes to the plan, including the option of a one-time renewal for an additional three months, coverage for dependents ages 18 and under, and limitations on preventive services and prescription drugs.