CA Senate Votes on Ban “Short-Term” Junk Health Coverage

Despite efforts by the Trump Administration to promote substandard "short-term" insurance, the California State Senate today voted 27-10 on a bipartisan vote to ban such insurance from being sold in our state.
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For Immediate Release: Monday May 21st, 2018

Anthony Wright, executive director, Health Access California, 916-870-4782 (cell)
Rachel Linn Gish, director of communications, Health Access California, 916-532-2128 (cell)

CALIFORNIA SENATE VOTES TO PROTECT CONSUMERS FROM JUNK INSURANCE, RESISTING FEDERAL SABOTAGE OF OUR HEALTH SYSTEM

  • SB 910 (Hernandez) keeps Californians from being caught with substandard coverage that doesn’t cover essential health benefits, can deny for pre-existing conditions, and may have annual & lifetime limits.
  • President Trump has issued regulations to expand access to so-called “short-term” plans, even though a recent federal report found that these plans would siphon off the healthiest people from the ACA exchanges, leaving an older and sicker risk pool and driving up premiums.
  • In resisting President Trump’s administrative attacks on our health system, the California Senate also passed SB 1108 (Hernandez), to prevent the federal government from imposing eligibility restrictions, including work requirements, on our Medicaid program. 

Sacramento, CA – Despite efforts by the Trump Administration to promote substandard “short-term” insurance, the California State Senate today voted 27-10 on a bipartisan vote to ban such insurance from being sold in our state. SB 910, by Senator Ed Hernandez, bans substandard short-term insurance, which harms consumers who buy such coverage but find out later it doesn’t cover many needed treatments. These limited plans also target younger, healthier people, spiking premiums for those still in the remaining individual insurance market.

Earlier this year, the Trump Administration’s Center for Medicare and Medicaid Services announced a proposed rule to extend the use of so-called short-term health insurance plans from the current three month span to a full year. The rule promotes the use of these substandard “junk” policies that do not need to comply with Affordable Care Act consumer protections. Such “short term” plans can deny coverage to people with pre-existing conditions, do not have to cover essential health benefits, and may impose annual and lifetime limits on how much care will be covered.

California health and consumer organizations praised the State Senate in protecting patients by passing SB 910 (Hernandez):

“California has rightly taken another step to shielding consumers from the Trump Administration attacks on our patient protections and health system. California should rightly reject these substandard plans that deny people with pre-existing conditions, that don’t cover essential health benefits, and that have annual and lifetime limits on coverage,” said Anthony Wright, executive director, Health Access California, the statewide health care consumer advocacy coalition and the sponsor of SB 910. “These junk health plans collect premiums from patients, but may not cover them when they actually need care. This imperils the finances of those who buy these plans and also spikes premiums and destabilizes the insurance market for everybody else. California can’t go back to the bad old days where coverage didn’t cover basic treatments or ran out prematurely.”

The bill is part of a broader set of legislation to protect consumers from the federal government’s administrative attacks on our health system. This includes SB 1108 (Hernandez) which would prohibit the state from pursuing waivers that make it harder for low-income people to enroll in Medi-Cal, also approved by the Senate today on a bipartisan vote.

Both bills are part of the #Care4AllCA package of legislative priorities to hold consumers harmless from the administrative attacks and to take steps toward a more universal, affordable, and accountable health system in California.

Resources:

SB 910 (Hernandez) Fact Sheet: Limiting Junk Insurance: Short Term Insurance Plans

California Health Care Foundation: Short-Term Plans Could Bring Long-Term Risks to California’s Individual Market

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