The Trump administration is promoting short-term health care plans as a cheaper alternative to Obamacare, but some state regulators are pushing back against the expanded use of the plans, which starting in October will be able to provide coverage for up to three years, according to new federal regulations released earlier this month.
Some state officials worry that the plans, which typically provide a limited set of benefits and refuse to cover pre-existing conditions, will leave patients in the lurch – and stuck with enormous bills – when they need medical care. Jessica Altman, Pennsylvania’s insurance commissioner, told The Hill, “There are so many things those plans don’t have to do or cover. … these plans are not comparable to [Obamacare] compliant plans.”
The short-term plans are subject to state regulation, and Health and Human Services Secretary Alex Azar has encouraged states to embrace them. "This affordable option will only be as available as state legislators and insurance commissioners allow it to be," Azar said last week at a meeting of conservative state legislators.
But as The Hill reports, several states are taking steps to restrict the use of the plans:
- California currently limits the plans to 185 days of coverage, and state legislators are working on a bill to ban them entirely.
- Lawmakers in Hawaii are considering a bill that would prohibit the sale of short-term plans to anyone who is eligible for an Obamacare plan.
- Maryland has passed a bill limiting the plans to three months, without a renewal option.
- Washington’s insurance commissioner may limit the plans to three months and create strict transparency rules aimed at deceptive marketing by insurance brokers.
Other states, including Massachusetts, New Jersey, Rhode Island and Vermont, will rely on existing regulations to sharply limit the sale of the plans.
On the other hand, some states with Republican leaders are embracing the expansion of short-term plans. Tennessee’s insurance commissioner, Julie Mix McPeak, told The Hill, “We need competition. Having a plan that can be a stopgap measure, and affordable, is not necessarily a bad thing,” McPeak said. At the same time, however, McPeak said there are concerns about consumers failing to understand the limited nature of the coverage they buy. “We have to really make sure consumers know what they’re purchasing, and they’re aware of what’s covered and what’s not covered,” McPeak said. “The last thing we need is for consumers to have surprise bills.”