Short-Term, Limited Duration Plans will Harm Patient’s Access to Comprehensive Coverage
On August 1, 2018, the Administration finalized another policy that will impact access to quality health insurance coverage by expanding the availability of short-term, limited duration (STLD) insurance plans that are not required to cover essential health benefits or pre-existing conditions. These plans are currently intended to fill the gap in insurance coverage temporarily for those that were between jobs, transitioning from school to the workforce, or other short term lapses in coverage of three months or less. Since the plans were intended to be temporary, they are not required to provide coverage for essential health benefits or for those with certain pre-existing conditions. The new rule recently released expands the availability of these plans, allowing plans that offer coverage for up to 364 days, and can be renewed for up to three years.
Major concerns regarding STLDs
STLDs are not governed by federal rules regarding what they must cover, meaning many plans may not cover essential health benefits including emergency services, mental health care, and prescription drugs. Many who enroll in these plans are likely to discover too late that the policy does not cover their needs, and find themselves unable to gain access to treatment for injuries, mental health or substance abuse disorders, surgeries, and more. Furthermore, services that are covered often have a low dollar limit, leaving patients to pick up the majority of the cost.
- Are able to exclude consumers based on pre-existing conditions
- Can retroactively cancel policies and refuse to pay for care for a person with a condition that was not disclosed at the time of purchase, even if the individual did not know they had it or had not been previously diagnosed
- Can charge higher premiums to older or less healthy people without limit
- Undermine the insurance marketplace as they draw healthier people away and make comprehensive coverage more expensive for those with higher cost healthcare needs, or who are excluded from STLDs
What does this mean for cancer patients and survivors?
This rule lifts important protections put in place to ensure that short-term, limited duration plans are used to cover a coverage gap as they were intended, and creates further uncertainty in the health insurance marketplace. Cancer patients and survivors will likely find themselves unable to purchase these plans at all, whether ineligible due to restrictions surrounding pre-existing conditions or plans offering coverage at dramatically higher premiums. Those who enroll in these plans will face difficulty in getting coverage for many necessary services, and those diagnosed after enrolling in the plan may find their coverage rescinded entirely.
States are able to regulate these plans and adopt laws or issue regulations to create standards not included in the Administration’s rule, leaving room for dramatic variance in the types and availability of these plans offered based on the state patients live in. Massachusetts, New Jersey, and New York prohibit short-term plans entirely, and there are a variety of ways other states can work to regulate plans flexibility. Individuals across the country will find very different short-term plan options, if any at all.
Patients enrolling in short-term, limited duration health insurance plans should be cautious to research plan benefits thoroughly to ensure that they will receive necessary coverage, and understand the limitations. Short-term health insurance plans are not designed to provide comprehensive coverage.