Patient Groups Approve of Legal Challenge to Health Insurance Rule

Groups Will Urge the Court to Reject Short-Term Health Plan Changes

Today a lawsuit was filed in U.S. District Court to stop the implementation of a rule governing short-term limited duration insurance plans (STLD). The lawsuit is supported by numerous patient groups including, the American Cancer Society Cancer Action Network, American Lung Association, March of Dimes and National Multiple Sclerosis Society.

Under the rule, which is scheduled to take effect next month, insurers will be able to issue short-term plans that can be extended for up to 36 months.

These short-term plans can deny or charge people more for coverage based on their health status and are exempt from having to cover essential health services. The plans will also be able to charge older people more than three times what they charge a younger person for the same coverage.

The patient groups plan to file an amici curiae or friend-of-the-court brief in support of the plaintiffs in this case.

Following is the group's joint statement:

"The short-term insurance rule poses a serious threat to patients everywhere, including those with cancer, multiple sclerosis and serious respiratory conditions. These short-term plans will be able to deny people coverage or charge them more because of their health status and will be able to pick and choose what services they will cover for those who do enroll.

"Extending the availability of these plans will likely split the individual insurance market between older and sicker Americans who will have to pay more for comprehensive health coverage and younger and healthier people who will pay less, but who will be left with inadequate coverage should they receive an unexpected diagnosis or encounter a serious health problem.

"These kinds of bare bones plans were widely available before 2014, and the data show they often left people with pre-existing conditions unable to afford or obtain coverage on the individual market while healthy people faced financial ruin whenever they needed major health services. Manipulative sales tactics and fraud was also common among these plans.

"Despite overwhelming objections from patients, providers and consumer groups, the administration still approved this highly problematic rule. On behalf of the tens of millions of patients our organizations collectively represent, we intend to make clear to the court the real and serious health and financial risks patients would face should this rule be allowed to take effect." 

For more information, contact:

Allison MacMunn
[email protected]

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