One big problem with expanding consumer use of short-term health insurance is that consumers may have no good way to know what a policy will really cover.
Jessica Altman, the Pennsylvania insurance commissioner, presented that argument Wednesday, in Washington, at a hearing organized by the House Health Energy and Commerce health subcommittee.
A typical short-term health insurance policy covers much less care than ordinary major medical plans cover, and consumers often buy the coverage without understanding the limitations, Altman said at the hearing.
“The plans are sold without consumer access to provider directories, formularies, sample coverage documents, summaries of benefits and coverage, or a uniform glossary,” Altman said.
The Affordable Care Act exempts “short-term limited duration insurance” (STLDI) from the requirements the ACA sets for major medical coverage.
The administration of former President Barack Obama imposed new benefits duration limits on short-term policies, in part to keep issuers of short-term policies from cutting into sales of ACA-compliant individual major medical coverage.
The administration of President Donald Trump has eliminated the benefits duration restriction. A state can now let an issuer keep the same short-coverage in place for up to three years.
Issuers and distributors of STLDI products have argued that the products offer coverage tailored to fit what consumers actually want, and what consumers are willing to pay for.
Issuers note, for example, that ACA rules have pushed issuers to make enrollees stick with increasingly narrow provider networks. A typical short-term health insurance policy may use a very large rented network, or come with no incentives or requirements to use providers within any particular network.
The New House
Democrats are now in charge of the House and the House Energy and Commerce health subcommittee.
Many Democrats in Washington and state capitals have been hostile to efforts to expand use of short-term health insurance.
What STLDI Supporters Say
Supporters of the Trump administration efforts, including Grace-Marie Turner, president of the Galen Institute, say Democrats are simply trying to protect expensive, restrictive ACA-compliant coverage against competition.
Turner testified at the House Energy hearing that Covered California had a hard time attracting new enrollees to exchange plan coverage this year.
“Marketing doesn’t work when the main reason that people don’t sign up for coverage is because of cost,” Turner said.
STLDI insurance policies typically cost lost than half of what ACA-compliant policies cost, Turner said.