About 1M People May Have to Work Harder to Get Cheaper Health Plans Under HHS Rule


Upward of 1 million people who have health plans that are cheaper than Obamacare plans will have to renew them more often under a new Obama administration rule.

The short-term health plans, which currently can be sold for up to 12 month terms, don’t comply with Affordable Care Act requirements, such as prohibitions against pre-existing condition exclusions, the ban on lifetime and annual dollar limits and the requirement to cover essential health benefits. Under the new regulations they can only be sold for up to three months.

Plans must comply with the new regulations as of April 1, 2017, and the current plans must terminate by Dec. 31, 2017.

“In some instances, individuals are purchasing this coverage as their primary form of health coverage and, contrary to the intent of the 12-month coverage limitation in the current definition of short-term, limited-duration insurance, some issuers are providing renewals of the coverage that extend the duration beyond 12 months,” the Department of Health and Human Services, the Department of Labor and the Internal Revenue Service said in the rule.

Part of the reason the agencies gave for issuing the new restrictions is that the short-term plans are attracting healthier people, which keeps them out of the ACA marketplaces. The Obama administration is trying to get more healthy people to sign up for ACA plans to reduce costs.

The average increase in the benchmark, second-lowest-cost silver-tier plan on which tax credit subsidies are calculated will be 22 percent for 2017, the HHS reports. That’s the sharpest premium increase so far for the ACA marketplaces, which began operating in 2014.

But AgileHealthInsurance, a health insurance broker owned by Health Insurance Innovations that sells the short-term plans, doesn’t believe it will be hurt by the rule, executive director Sam Gibbs said.

Most short-term plans currently sold are about 90 days in duration and customers can re-apply for other plans afterward, Gibbs said. “It’s going to be inconvenient but it won’t substantially affect the market,” Gibbs said.

The HHS expects 13.8 million people will sign up for 2017 coverage in the ACA marketplaces during the open enrollment period from Nov. 1 through Jan. 31, 2017.

Read the full story at http://www.bna.com/shortterm-health-plans-n57982082031/.

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