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08/01/2018

Insurance Commissioner Comments on Short-Term, Limited-Duration Final Rule

Harrisburg, PA - Insurance Commissioner Jessica Altman today issued the following statement on the federal government’s final rule on the expansion of short-term, limited duration health plans:

“I am disappointed and extremely concerned that the Trump Administration has once again taken action to dismantle the Affordable Care Act, this time by expanding the  availability of short-term, limited duration plans. This rule opens the door further to confusion, uncertainty, market instability and even deceptive marketing.

“These plans are meant to serve as a temporary alternative for a consumer with a gap in coverage. This final rule relaxes those limits and may lead consumers to consider a short-term plan as a low-cost alternative to ACA coverage.  To be clear, short-term plans are not an alternative to major medical coverage and should not be presented as such.

“Short-term plans do not have to provide critical protections that consumers deserve. They do not have to meet the minimum requirements for comprehensive coverage under the ACA. They can exclude preexisting conditions and deny coverage to an applicant due to a preexisting condition. They are not required to cover essential health benefits, prescription drugs or preventive services. They also can set lifetime and annual dollar limits to the amount they pay.

“Additionally, consumers who purchase these plans this year could still face a tax penalty, since the individual mandate repeal does not take effect until 2019.

“Consumers should not gamble with their health. They should understand that short-term plans, though seemingly affordable with potentially lower premiums, may become costly because of the trade-off for benefit coverage and provider access. One stroke survivor, for example, told us that her short-term, limited-duration coverage had a maximum payout of $40,000, but the costs for emergency and immediate follow-up care for her stroke totaled over $250,000.

“I’m also extremely concerned that some insurance agents or insurer websites may try to market short-term policies as comparable to ACA plans. In the past two years, the Insurance Department revoked eight licenses because of deceptive marketing of these plans, so I urge consumers to be very careful when examining short-term plans and to contact the Insurance Department if they were led to believe that their short-term policy met ACA comprehensive coverage requirements.”

Commissioner Altman submitted comments in April on behalf of the Commonwealth of Pennsylvania warning that the changes would increase potential for consumer harm and market destabilization.

The Insurance Department has created a brochure for consumers, Thinking about buying a short-term health insurance plan?

 

MEDIA CONTACT: Elizabeth Rementer; 717-787-3289; erementer@pa.gov -

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