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April 24, 2018

Doc groups: Trump plan to expand short-term insurance would 'disrupt and destabilize' exchanges

Daily Briefing

    Provider and insurer groups are urging the Trump administration not to move forward with a proposal to expand short-term health plans, saying that doing so would cause Affordable Care Act (ACA) premiums to rise.

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    According to CMS, short-term health plans are "designed to fill temporary gaps in coverage when an individual is transitioning from one plan or coverage to another form of coverage." The plans are not required to comply with certain ACA requirements, such as provisions that bar insurers from denying an individual coverage or charging him or her higher premiums based on pre-existing medical conditions. The plans also do not have to comply with the ACA's minimum coverage requirements.

    Prior to 2016, insurers were able to sell short-term plans that were valid for up to 364 days. However, HHS under former President Barack Obama shortened the use of such plans to just three months in an effort to curtail their use and encourage individuals to purchase ACA-compliant coverage.

    In February, HHS issued a proposed rule that would allow insurers to sell short-term health plans that are valid for up to one year. The public comment period for the proposed rule ended Monday at 5 p.m.

    Projected effects

    The Trump administration projected that if the proposed rule were to be finalized, only 100,000 to 200,000 people would leave ACA plans for short-term ones.

    But health care think tanks and consulting groups have released much higher projections, ranging from the Wakely Consulting Group's projection of one million to 1.9 million people to the Urban Institute's projection of 4.3 million people.

    Joseph Antos, a resident scholar at the American Enterprise Institute, said these high-end estimates are likely unreliable. "This is a limited market," he said, adding, "These plans were always intended to be bridge plans from one state of life to another state of life, and I think they're going to remain that way."

    Physician, insurer groups push back

    Ahead of Monday's comment submission deadline, physician and insurer groups pushed back against HHS' plan to extend the coverage period for short-term health plans. 

    American Medical Association (AMA) President David Barbe said that the group "supports efforts to maximize health plan choices and make coverage affordable for individuals seeking coverage in the individual and small group markets," but believes that the proposed rule "would culminate in plans being offered that fall far short of maintaining crucial state and federal patient protections, disrupt and destabilize the individual health insurance markets, and result in substandard, inadequate health insurance coverage."

    American Academy of Family Physicians (AAFP) Board Chair John Meigs Jr. in a letter to HHS Secretary Alex Azar argued that expanding short-term health plans would allow insurers to "reduce or eliminate certain essential health benefits to avoid vulnerable, expensive patients by excluding specific services." Meigs warned that those changes could "potentially make plans more expensive for people with long-term chronic conditions or with sudden medical emergencies."

    The leading health insurance group also urged HHS not to extend short-term health plans beyond 6 months. America's Health Insurance Plans incoming President and CEO Matt Eyles in a letter to Azar wrote, "We are concerned that substantially expanding access to short-term, limited duration insurance will negatively impact conditions in the individual health insurance market, exacerbating problems with access to affordable comprehensive coverage for all individual market consumers."

    Eyles in the letter urged HHS "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." If HHS moves forward with its plans, Eyles said the rule change should not take effect before Jan. 1, 2020.

    The Alliance of Community Health Plans in its comments warned that the proposed rule could "cause more insurers to flee the market, leaving consumers with fewer options" (Japsen, Forbes, 4/22; Johnson, "Wonkblog," Washington Post, 4/23; Commins, HealthLeaders Media, 4/23; Hellmann, The Hill, 4/23).

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