The nation’s largest trade group for health insurance companies is sounding the alarm on a proposal from the Trump administration that would expand the sale of plans that cover fewer services.
America’s Health Insurance Plans (AHIP) says the proposal could lead to more people being uninsured or underinsured and result in higher health-care costs in the long run.
“Short-term plans can provide an important temporary bridge for Americans who are transitioning between plans. But they are not a replacement for comprehensive coverage,” said Matt Eyles, incoming president and CEO of AHIP.The proposed rule from the Trump administration would allow people to buy short-term health insurance for up to 12 months, lifting Obama-era restrictions that limited the coverage to a maximum of three months.
The administration argues this would create an alternative for people who can’t afford ObamaCare-compliant plans that cover a comprehensive list of services.
But opponents note that insurers could charge people with pre-existing conditions more for these plans, which they cannot do for those in ObamaCare-compliant plans.
AHIP also argues these plans should be limited to six months instead of 12.
“We urge the Administration to limit the duration of short-term plans to six months, ensure clear disclosures to consumers about what short term plans do and do not cover, and inform consumers of the potential availability of discounted coverage through the marketplace,” Eyles said.
Eyles noted that consumers should be aware that short-term plans may not cover preventive care, prescription drugs, mental health care or treatments for chronic health conditions. These plans may also impose annual, lifetime or daily limits on coverage.
A Kaiser Family Foundation analysis of short-term plans released Monday showed gaps in what services are covered.
Of 24 short-term insurance plans currently marketed in 45 states, 43 percent do not cover mental health services, while 62 percent don’t cover substance abuse treatment.
Seventy-one percent don’t cover outpatient prescription drugs, and none of the plans covered maternity care.
However, these plans are also about 20 percent cheaper than the lowest-cost bronze plans available through the Affordable Care Act marketplace in the same location.