Health insurers support a Department of Health and Human Services (HHS) proposed rule that would sharply restrict people from buying short-term health plans that don’t comply with the Affordable Care Act (ACA).
But state insurance regulators and health insurance brokers disagree, arguing the proposal could result in consumers who are caught between employer sponsored plans or who missed an open enrollment period losing coverage altogether.
HHS proposed limiting short-term health plans, which currently can be sold for up to a year, to less than three months. The plans don’t comply with ACA requirements to cover a comprehensive set of benefits, such as prescription drugs, maternity care or mental health.
The restrictions are intended to push healthy people who are buying the plans into the ACA marketplaces.
America’s Health Insurance Plans and the Blue Cross Blue Shield Association say the restrictions are needed to help make marketplace plans profitable. Large health insurers such as UnitedHealthcare, Aetna and Humana are retreating from the unprofitable marketplaces, which insurers say have attracted a sicker group of people than originally expected since they began in 2014.
But the National Association of Insurance Commissioners and the National Association of Health Underwriters say the proposed rule wouldn’t necessarily result in a healthier mix of enrollees in the marketplaces because short-term plans usually exclude pre-existing conditions. “Only the healthy consumers would have coverage options available to them; unhealthy consumers would not,” the NAIC commented.
But a group of consumer representatives affiliated with the NAIC also commented that the sale of the short-term plans is “undermining the marketplace risk pools” by attracting healthier customers.
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