On February 20, 2018 the Trump Administration’s Center for Medicare and Medicaid Services (CMS) announced a proposed rule to extend the use of so-called “short-term” health insurance plans from three months to a year, and otherwise promote the use of these substandard “junk” policies that would not follow Affordable Care Act consumer protections. Such “short-term” plans could deny coverage to people with pre-existing conditions, do not have to cover essential health benefits, and can impose annual and lifetime limits on how much care they will cover.
Health Access, and other health and consumer organizations urge the state Legislature to protect patients by passing SB 910, by Senator Ed Hernandez, to ban such “short-term” insurance. These short-term coverage plans are actually a long con, collecting premiums from patients but not actually covering medically necessary care. This substandard coverage imperils the finances of those who buy it, but also spikes premiums and destabilizes the insurance market for everybody else. California should not allow the Trump Administration to sabotage our health system and should simply ban this junk coverage from being sold in the first place, protecting patients across the board.
Why is short-term insurance considered junk insurance?
- It can deny people with pre-existing conditions.
- It can charge higher rates based on a person’s health status.
- It does not have to cover any or all 10 ACA essential health benefits.
- It can include dollar caps on services and stop covering medical expenses after the cap is reached.
- It does not have a maximum limit on annual out-of-pocket costs.
- It does not allow people to use federal financial assistance to pay premiums.
More information on SB 910 (Hernandez) can be found in this fact sheet. This announcement is the newest proposal in a string of attempts by the current federal administration to try to undermine the Affordable Care Act. California has already taken substantive steps to protect California consumers and patients from theses harmful attacks – including preserving our open enrollment period, and determining a work-around for the de-funding of the cost-sharing reductions. A list of California’s efforts to resist administrative attacks on our health care is available here.