Over 100 Patient Groups Join to Raise Alarm Over Proposed Insurance Rule

More than 100 organizations representing millions of patients, providers and consumers joined together in letters and formal comments to Congressional leadership and federal agencies urging the withdrawal of a proposed rule on short-term, limited duration insurance plans (STLD). The groups warn that the proposed rule would likely divide the individual insurance market and significantly weaken patient protections, leaving millions of patients with few meaningful or affordable coverage choices.

Currently short-term plans are only available for up to 3 months and are intended to fill brief gaps in coverage. The proposed rule would extend the availability of these plans up to 364 days and provide an option for indefinite renewability, allowing them to function like permanent health insurance without having to follow most of the permanent plan rules.

"Expanding access to these policies will likely cause premiums in the individual insurance marketplace to increase dramatically, as younger and healthier individuals choose to enroll in cheap, short-term plans," the letters explain. "Allowing STLDs to proliferate would force individuals, including those with serious or chronic diseases and disabilities, into a smaller, sicker market to obtain the coverage they need to manage their health. Premiums for comprehensive plans that meet federal standards would likely skyrocket, and plans would likely exit the market. This will make insurance either unavailable or unaffordable for those who rely on the marketplace to get coverage."

As proposed, STLD plans could continue to deny or charge people more for coverage based on their health status; would be exempt from covering essential health services, like prescription drugs or hospitalization; could impose lifetime or annual caps on coverage for certain services; and could charge older people more than three times what they charge a younger person for the same coverage. Even healthy people would be at greater risk of unmanageable out-of-pocket costs as few people anticipate a serious illness, and unexpected diagnoses or long-term hospitalizations may not be covered under short-term plans.

The letters go on to note, "Our organizations are dedicated to identifying and promoting improvements to our health insurance markets that control costs, stabilize the market, and positively impact coverage and care for millions of Americans. Expanding access to STLDs will move us away from – not towards – achieving these goals."

Public comments on the rule are due to the Departments of Health and Human Services, Treasury and Labor today.

The joint comment letter can be viewed here.

The letter to the Secretaries of HHS, Treasury and Labor can be viewed here.

The letter to Congressional Leaders can be viewed here.