Short-Term Health Plans
We are continuing our advocacy blog series meant to help you take care when it comes to important arthritis health care and coverage issues. If you’re now just tuning into this series, check out previous advocacy blog posts here. Our last take care blog kicked off a focus on health insurance benefits and open enrollment. Today we explore short-term health plans, a type of insurance that has been on the market for some time but is receiving attention due to new actions taken by the administration. Read on to learn about these plans and why they are an unsatisfactory option for people with arthritis.
What are short-term health plans?
Short-term health plans are not new. As the name suggests, these plans are meant to fill in temporary gaps in health coverage. For example, if an individual is in between jobs or needs coverage outside of the traditional open enrollment period, short-term plans are available to purchase for up to three months from insurers and brokers.
Why are short-term plans in the news?
Earlier this month, the federal Departments of Labor, Treasury, and Health and Human Services finalized a regulation that loosens and expands the availability of short-term plans. Despite over 98 percent of health care stakeholders strongly opposing this action, the administration decided to move forward with its proposal.
What is changing with short-term health plans?
Beginning in October, the new regulation permits short-term plans to be sold for 12 months and renewed by an individual for up to 3 years. This is a change from current rules, which do not allow short-term plans to be a substitute for comprehensive coverage. Today, they are limited to a duration of 3 months and are not renewable health policies.
Are short-term health plans different than individual market health plans?
Yes, short-term health plans are separate from plans offered on the health insurance exchanges because they do not need to comply with important patient protections enacted under the Affordable Care Act. You will not find these plans on healthcare.gov, for example. Since short-term plans are not considered comprehensive coverage, the new regulation means insurers and brokers can more widely sell short-term plans that:
- Deny enrollment based on age, gender, health status, or other factors that might suggest an individual’s future use of health care services
- Exclude coverage for pre-existing conditions
- Exclude any or all of the essential health benefits like prescription drug coverage, emergency care, or other provider services
- Apply annual or lifetime dollar limits on coverage
- Increase patient out-of-pocket maximums above limits imposed by current law
- Impose more stringent network adequacy requirements
What kind of issues would someone with arthritis face if they enrolled in a short-term health plan?
Short-term plans are not ideal for people with arthritis since they can deny coverage for people with pre-existing conditions. The plans are also medically underwritten, meaning you would be asked to fill out a medical history; in turn, this is used to approve or deny your enrollment. The Affordable Care Act prohibited this behavior for plans offered on the individual market. However, because short-term plans are not considered comprehensive health coverage, they do not need to comply with this rule.
Do short-term policies need to disclose anything specific to consumers?
Yes, they must include clear language stating these plans may not work best for people with pre-existing conditions like arthritis. Be on the lookout for disclosure language that:
- Urges you to carefully check the policy for exclusions or limitations regarding coverage of pre-existing conditions, or specific health benefits like prescription drugs
- Warns a loss of short-term plan coverage means you may have to wait until the next open enrollment period before enrolling in health insurance again
For any health plan, it is always good practice to carefully review the terms and conditions to understand the scope of benefits and potential out-of-pocket costs you may incur.
Is there anything else I should be aware of about short-term health plans during open enrollment?
Short-term health plans often misrepresent health coverage and benefits; these plans also have a history of fraud. In addition, you should know that since these health plans are temporary and do not offer comprehensive coverage, premiums are significantly cheaper than insurance found on healthcare.gov. While lower premiums might sound attractive, if you are unexpectedly diagnosed with a chronic disease like arthritis, your plan may not offer coverage for services like prescription drugs or emergency room visits to help you manage your health – and failure to disclose a medical condition up front could also result in an insurer rescinding the insurance policy, leaving you without any health care coverage at all.
What resources are available from the Arthritis Foundation?
In the coming months the Arthritis Foundation will be raising awareness about the open enrollment period, but you can get started with our Your Coverage, Your Care toolkit. It’s a great resource to help you understand your insurance options, the claims process, and tips to overcome barriers. Additionally, if you have any questions about your health care, we have licensed clinical social workers on staff that can talk with you 24 hours a day for your convenience. You can reach the Arthritis Foundation Helpline at 1-844-HELP (4357).
If you’d like to stay informed of federal and state-based health care issues, consider signing up to be an Advocate. Becoming a part of our Advocacy grassroots network is an easy way to get involved and stay informed.