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Wednesday, February 28, 2018

The Trump Administration has proposed several rules outlining new health insurance options that would provide lower cost insurance coverage to consumers. However, the Cancer Support Community (CSC) believes that these plans may not comply with the Affordable Care Act (ACA or Obamacare). While allowing patients to purchase health care coverage through the independent market, and potentially at a lower premium, may seem like a good option for some people, it ultimately allows for plans that offer lesser coverage and may put patients at great financial and physical risk.

Short-Term, Limited Duration Plans

On February 20, a regulation was proposed by the Departments of Labor, Treasury, and Health and Human Services that would allow insurers to sell short-term, limited duration (STLD) health insurance for a duration of one year (this was previously limited to 90 days). STLD plans were originally designed for people dealing with a temporary gap in health care coverage (for people who are out of work for example). These STLD plans are not renewable.

STLD plans are not required to comply with ACA regulations which protect consumers in a variety of ways—ensuring access to essential health benefits, restricting limits on coverage, and ending pre-existing conditions exclusions. They also do not meet coverage levels adequate enough to meet the individual mandate of the ACA (which requires minimum essential coverage in order not to be faced with a penalty). STLDs offer seemingly affordable care but put patients at risk of being left with coverage that doesn’t meet their needs.

Here’s what you should know about STLD plans:

  • They may offer lower premiums than ACA compliant plans but may apply higher deductibles.
  • They may be medically underwritten so that they can only be purchased by healthy individuals—and if patients develop health conditions they can lose coverage when the contract ends.
  • They can exclude patients based upon pre-existing health conditions.
  • They may not have to cover essential health benefits (such as prescription medications, mental health care, hospitalization, and emergency services)
  • They can impose lifetime and annual limits on coverage.
  • They are not subject to cost sharing limits which puts patients at financial risk.

Association Health Plans

A group of small businesses can band together to purchase health insurance coverage for employees (association health plans). Similar to STLD plans, association health plans are not required to comply with ACA regulations. Previously, these plans were required to comply with ACA regulations but that requirement is being removed so that among other consumer protections these plans do not have to cover essential health benefits.

The Bottom Line…

These plans may be less expensive than those offered under the ACA but they put patients at risk of losing important protections. They also misbalance the health care market which depends upon both patients living with illness (who may be higher cost) and healthy patients (who typically do not cost as much). Ultimately, if sicker patients are the only ones purchasing health insurance coverage through the ACA marketplace, they will be charged more.

What’s Next?

The comment periods for both rules are currently open (more information below). The Cancer Policy Institute will be submitting comments focused on the need to offer both affordable and comprehensive insurance options to patients. Make sure you are a CPI grassroots advocate to receive breaking news, our monthly newsletter, and opportunities to engage and protect cancer patients and survivors.

Association Health Plans

Read the proposed rule and comment (by March 6)

Short-Term, Limited Duration Plans

Read the proposed rule and comment (by April 23)