AHIP Pans Proposed Rule for Short-term Health Plans

The health insurance lobby says the duration of short-term plans should be extended no longer than six months, and that consumers should be clearly told the limits of their coverage.

The federal government's proposal to relax coverage requirements for 90-day, short-term health plans is getting a chilly reception from the health insurance industry.

America's Health Insurance Plans incoming President and CEO Matt Eyles told the Department of Health and Human Services that the short-term plans should not be offered as a full replacement for comprehensive coverage.

"We are concerned that substantially expanding access to short-term, limited duration insurance will negatively impact conditions in the individual health insurance market, exacerbating problems with access to affordable comprehensive coverage for all individual market consumers," Eyles said in a letter to HHS Secretary Alex Azar.

Under the proposed rule, short-term insurance would not have to comply with coverage mandates under the Affordable Care Act, which include preexisting condition protections, preventive care, prescription drugs and mental health coverage. The proposed rule also eliminates the three-month limit on the duration of the plans.

Critics contend that the restrictions on short-term plans were put in place to prevent health insurance companies from siphoning off healthy people at the expense of the more comprehensive, and expensive ACA-mandated options.

Eyles appeared to agree with many of the criticisms.

In his letter to Azar, Eyles said that the short-term plans should be extended no more than six months, and should provide consumers with clear disclosures about the extent of the coverage and the availability of more comprehensive coverage through the healthcare marketplace.

He also recommended that the rule change not go into effect before Jan. 1, 2020.

Earlier this month, the Alliance of Community Health Plans also raised concerns about the proposed rule in a letter to Centers for Medicare & Medicaid Administrator Seema Verma.

"With few advantages of short-term, limited duration insurance and the high risk of introducing additional instability in the small group and individual marketplaces, ACHP recommends that the Departments not finalize the proposed rule," ACHP President and CEO Ceci Connolly said in the letter.

"We suggest that other policy approaches, such as establishing a federal reinsurance program for the ACA-compliant individual and small group markets, would be far more effective in promoting affordable coverage options," Connolly said.