Yesterday, Sen. Roy Blunt (R-MO) wrote an op-ed touting the Trump Administration’s junk plan policy that expands the availability of short-term limited duration plans. Blunt makes a valiant effort to argue these junk plans are actually insurance, but we thought it would be helpful to translate what these plans mean for people.
WHEN HE SAYS Junk Plans Will “Meet The Needs Of Consumers.”
WHAT HE MEANS IS…
Junk Plans Can Discriminate Against People Based On Whether They Have A Pre-Existing Condition Or Gender. Short-term health plans are exempt from key consumer protections mandated by the Affordable Care Act. These junk plans are allowed to discriminate against people with pre-existing conditions by dropping or denying coverage, charge women more, impose annual limits on care, and exclude basic coverage, like hospitalization, prescription drug coverage, and maternity care.
Junk Plans Don’t Have To Cover Certain Benefits, Forcing People To Pay More For The Same Comprehensive Coverage They Have Under The ACA. A study by the Commonwealth Foundation revealed that, “While 35 states and the District of Columbia require short-term plans to cover at least one state benefit mandate, none of them require short-term policies to cover all essential health benefits.” In a separate study of seventeen states, Commonwealth found that four states had no approved short-term plan sellers because they required such plans to cover all or some of the same rules as traditional coverage. The Congressional Budget Office has previously estimated that insurance plans that do not cover essential health benefits could supplement coverage by selling riders, such as a maternity care rider that would cost an additional $1,000 per month — charging people who need comprehensive care even more for the same coverage.
Most Junk Plans Did Not Cover Maternity Care, Substance Abuse Treatment Or Prescription Drugs. In an analysis of short-term plans conducted by the Kaiser Family Foundation, no short-term plans studied covered maternity care, 62 percent did not cover substance abuse treatment, and 71 percent did not cover outpatient prescription drug services.
WHEN HE SAYS Junk Plans Don’t Require People To Pay For Benefits They Will Never Use.
WHAT HE MEANS IS Junk Plans Can Discriminate Against People Who Are Sick And Need Care And Do Not Have To Provide Coverage For The Care You Need. Junk plans can exclude or deny medical services such as prescription drug coverage, hospitalization, and maternity care. Even when plans say they cover prescription drugs, the benefit is often capped at a limit, such as $3,000. One short-term plan marketed by UnitedHealth’s Golden Rule subsidiary does not cover hospitalization over the weekend, and only 29 percent of junk plans cover prescription drugs. Adding insult to injury, short-term plans have a history of finding ways to deny coverage after people become sick.
WHEN HE SAYS Junk Plans Will Help Provide Coverage To Americans Who Are Uninsured.
WHAT HE MEANS IS People Think They’re Insured, But Find Out They’re Really Not When They Get Sick. Because junk plans are so skimpy, insurance commissioners worry that they may trick people into thinking they have insurance only to be riddled with unexpected bills once they get sick. This happened to Dawn Jones, who was diagnosed with breast cancer after buying a short-term plan when she was between jobs. Despite not knowing she had breast cancer when she bought the policy, the insurance company refused to pay for her treatment, leaving her with a $400,000 medical bill.
DON’T TAKE OUR WORD FOR IT: STATE OFFICIALS WARN AGAINST JUNK PLANS
State Insurance Regulators Express Concern That Short-Term Plans Are Being Marketed To Consumers In Misleading Way. “State insurance regulators, gathered over the past three days for a meeting of the National Association of Insurance Commissioners, expressed deep concern that short-term plans were being aggressively marketed in ways likely to mislead consumers. Many said the plans, which need not comply with the Affordable Care Act’s coverage mandates, were a poor substitute for comprehensive insurance.” [New York Times, 8/6/18]
(AK) Lori Wing-Heier, Director Of Alaska Insurance Division: “I’m Concerned That People Will Buy These Policies, Show Up At The Hospital For A Condition They Did Not Expect, And Discover They Are Not Covered.” [HuffPost, 8/5/18]
(CA) California Insurance Commissioner, Dave Jones: “Of Course They’ll Be Less expensive…That’s Because It’s Junk Insurance And It Won’t Cover The Same Things.” [HuffPost, 8/5/18]
(CO) Colorado Interim Insurance Commissioner, Michael Conway: People May Read Warnings, But Not Understand How Bare-bones These Plans Really Are. “They may read [the warning], but that’s not the same as understanding it…Because of the ACA, now people think the baseline has changed ― that certain things are always covered.” [HuffPost, 8/5/18]
(NY) Deputy Superintendent At New York Department Of Financial Services, Troy Oechsner: “These Are Substandard Products.” “‘These are substandard products,’ sold on the premise that ‘junk insurance is better than nothing’ for people who cannot afford comprehensive coverage, Troy J. Oechsner, a deputy superintendent at the New York Department of Financial Services, told the insurers.” [New York Times, 8/6/18]
(PA) Pennsylvania Insurance Commissioner Jessica Altman Has Already Revoked The Licenses Of Eight Brokers Or Agents Misrepresenting Short-term Plans. “In Pennsylvania, Altman said she has already revoked the licenses of eight brokers or agents who had been misrepresenting short-term plans.” [The Hill, 8/12/18]
(TN) Tennessee Insurance Commissioner, Julie Mix McPeak Is Concerned About Whether Consumers Fully Understand The Plans They Buy. “‘We have to really make sure consumers know what they’re purchasing, and they’re aware of what’s covered and what’s not covered,’ Mix McPeak said. ‘The last thing we need is for consumers to have surprise bills.'” [The Hill, 8/12/18]