This week, we submitted comments to the U.S. Department of Health and Human Services (HHS) in response to the agency’s proposed rule to expand the availability of short-term, limited duration insurance (STLDI) plans. This rule would mean millions of people would have bad insurance plans that do not cover their health needs, and millions more would be paying much higher prices for quality coverage.
Our comments are informed by our work helping newly-eligible individuals and their family members navigate the transition to Medicare from other types of health coverage—including employer-based insurance, the Affordable Care Act’s (ACA) individual marketplaces, and Medicaid—as well as from no coverage at all. Through this experience, we understand the importance of ensuring that people have continuous, comprehensive health insurance coverage before gaining Medicare. We are concerned the proposed rule would threaten people’s access to such coverage and urge HHS not to finalize the rule as written.
The ACA requires individual health insurance to meet certain standards. STLDI plans are exempt from the definition of individual health insurance coverage under the ACA and, therefore, do not have to comply with the law’s core consumer protections or insurance regulations. If short-term plans are allowed to be sold as a long-term alternative to ACA-compliant health insurance, as proposed, they will attract healthier consumers away from the individual market’s risk pools and endanger access to comprehensive, affordable coverage for millions of Americans, including those nearing Medicare eligibility.
For many people—particularly older adults and people with pre-existing conditions—switching to a short-term plan is not a viable option. They would have to remain in the ACA-compliant market where costs would skyrocket. Consumers who could qualify for and afford short-term coverage would also be at risk, as these plans are unlikely to protect those who buy them.
In our comments, we outline our general concerns with the proposed rule in more detail, including the potential for these expanded plans to undermine the ACA-compliant market, the impact of the proposed rule on people with pre-existing conditions, the inadequate coverage and consumer protections short-term plans confer, and the importance of further analysis. We also offer specific recommendations for the agency to consider if the rulemaking process does move forward.