To Counter New Trump HHS Sabotage, CA Consumer Advocates Urge Quick Passage of Ban on Junk Insurance

Sacramento, CA – To counter a new Trump Administration HHS rule to extend so-called "short-term" insurance that does not have to abide by Affordable Care Act patient protections, California consumer advocates urge the passage of legislation to ban such substandard insurance from being sold in our state.
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For Immediate Release: Wednedsay August 1, 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 CONSUMER ADVOCATES URGE QUICK PASSAGE OF BAN ON SUBSTANDARD “SHORT-TERM” PLANS, TO COUNTER NEW TRUMP HHS RULES

  • SB 910 (Hernandez) would ban so-called “short-term” insurance and keep 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’s HHS today issued final regulations to extend so-called “short-term” plans from three months to up to three years, 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.

Sacramento, CA – To counter a new Trump Administration HHS rule to extend so-called “short-term” insurance that does not have to abide by Affordable Care Act patient protections, California consumer advocates urge the passage of legislation to ban such substandard insurance from being sold in our state. SB 910, by Senator Ed Hernandez, bans substandard “short-term” insurance, which can deny for pre-existing conditions, and trap some consumers who buy such junk coverage but find out later it doesn’t cover many needed treatments. These limited plans also target and siphon off younger, healthier people, destabilizing the individual insurance market and spiking premiums for traditional insurance.

The Trump Administration’s Center for Medicare and Medicaid Services today announced a final rule to extend the use of short-term health insurance plans from the current three month span to a full year, with renewals for up to three years, making them no longer short-term. Such 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.

To prevent these caps on coverage, denials for pre-existing conditions, and spikes of premiums that would results from this HHS rule, SB 910 (Hernandez) would ban the sale of such substandard “short-term” insurance in California. SB 910 has already passed the California State Senate and is pending for a vote as early as next week on the California Assembly floor.

“The new final rule extending substandard coverage plans is worse than we thought, allowing so-called short-term plans that don’t have to abide by key patient protections or essential benefits to be extended for three years. SB 910 would prevent this new, giant loophole that would allow insurers to deny people for pre-existing conditions, arbitrarily cap coverage, and otherwise undermine our individual insurance markets. The California Legislature should act immediately when they come back next week to shield consumers from these Trump Administration attacks on our patient protections and health system,” said Anthony Wright, executive director, Health Access California, the statewide health care consumer advocacy coalition and the sponsor of SB 910. “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 caps on coverage.”

“These junk health plans collect premiums from patients, but may not cover them when they actually need care. These so-called short term plans imperils the finances of those who buy this substandard coverage, but 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,” said Wright.

The bill is part of the #Care4AllCA package of legislative priorities to shield consumers from the sabotage of the Trump Administration’s attacks on the Affordable Care Act and our health system, 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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