The Biden administration’s proposal to limit short-term, limited-duration health insurance (STLDI) to three months struck a nerve as 15,820 individuals and organizations people submitted opinions during the 60-day comment period, which ended on September 11.
The proposed rule by the Departments of Health and Human Services, Labor, and Treasury is scheduled to take effect on January 1. The rule would restrict the plans to up to four months with no option to renew. The new rule restores limits put into place in 2014 under the Obama administration. By executive order, President Trump allowed states to allow plans of up to one-year duration, with the option to renew for up to two years.
Restricting short-term insurance could potentially leave people who become sick without coverage, as their next option would be an Obamacare plan, which would not be available until the annual November enrollment period and could cost a lot more.
The Wrong Direction
Many of the comments were submitted by people who would be harmed by the new rule, notes the Paragon Health Institute in a letter it submitted, signed by 40 individuals from market-oriented public policy organizations.
“The main beneficiaries [of the new rule] would be health insurance companies that want to restrict alternative options, forcing Americans to buy heavily government-subsidized products (government subsidies cover roughly 80 percent of the premium for the average exchange enrollee) from them and not their unsubsidized competitors,” state the letter.
The letter says the proposal violates Americans’ right to control their health care and a promise by President Biden and will ultimately lead to higher premiums and subsidies for alternative private plans. The comment also points out the unemployed, who are the customers of such plans, are often out of work for more than four months and gaps in coverage will leave health care providers with more uncompensated care.
In another comment, 29 Republican state legislators in 19 states urged the administration to reconsider the rule.
“State policymakers and regulators have a better understanding of what the people of their respective states need,” the legislators wrote. “Continuing to recognize the preeminence of this type of regulation of insurance allows legislatures and departments of insurance to quickly adapt to market conditions and tailor responses appropriate to protect their citizenry.”
Adds More Uninsured
It is hard to describe how harmful it would be to limit STLDI, wrote Michael Cannon, Director of Health Policy Studies at the Cato Institute, in his multi-page public comment.
Cannon states that 95 percent of STLDI are “comprehensive major medical” plans, often more comprehensive than those on the Obamacare exchanges, and the Congressional Budget Office estimates 500,000 people will be left uninsured when STLDI plans end after four months.
“Most amazing is the administration acknowledges how dangerous the change is in its own rule,” wrote Cannon. “There is a label that will warn people about how dangerous the administration’s own proposal is by stating ‘when this policy ends, you might have to wait until an open enrollment period to get comprehensive health insurance.’”
Cannon included a chart of the price differences between STLDI and Obamacare premiums. In Phoenix, Arizona, for example, a bronze Obamacare plan will cost $680 a month while the range for short-term plans is $161.57 to $1,281.67. Consumers pay more for higher coverage caps and less out-of-pocket share maximums.
“This proposal is not an attempt to protect consumers,” wrote Cannon. “Quite the contrary: it would expose consumers to greater risk by reducing the consumer protections available in the STLDI market.”
‘Help Virtually No One’
Among the commenters supporting the rule were the American Academy of Family Physicians (AAFP) and the Planned Parenthood Federation of America.
“…STLD plans are not meant for long-term use and should be capped appropriately,” wrote the AAFP.
“…STLDI plans frequently have blanket exclusions for basic health care services that women, nonbinary, and transgender people rely upon, such as birth control, maternity services, abortion, and gender transition-related services,” wrote Planned Parenthood.
Supporters of the rule are likely to get their way, says Brian Blase, founder and president of the Paragon Health Institute.
“The Biden administration is likely to finalize this rule even though doing so would hurt a lot of people, particularly people who get sick, and help virtually no one,” said Blase. “They seem intent on taking coverage options away from people and promoting ACA plans at all costs.”
AnneMarie Schieber (amschieber@heartland.org) is the managing editor of Health Care News.