The coalition argued in its complaint that the final rule, issued last month by three federal agencies, violates the plain-English meaning of “short-term” by allowing the sale of the plans for up to 364 days at a time (up from three months) and “limited duration” by allowing renewals for up to three years (up from 12 months). The plans are sold in the individual market to those without employment-based or government-sponsored insurance.
The coalition also argued that the rule is unlawful because it arbitrarily creates an unauthorized “alternative” to Affordable Care Act (ACA)-compliant plans and violates the ACA by undercutting compliant plans and making them increasingly unaffordable. APA was joined in the lawsuit by the National Alliance on Mental Illness, Mental Health America, National Partnership for Women & Families, Association for Community Affiliated Plans, AIDS United, and Little Lobbyists, according to a news release.
Short-term health plans may be less expensive than comprehensive plans, but they are not required to cover “essential health benefits,” such as mental health and substance use disorder services, prescription drugs, hospitalization, emergency services, or maternity care. Similarly, short-term plans are not subject to important consumer safeguards or antidiscrimination rules and can deny coverage for any preexisiting condition; set higher premiums based on age, gender, or health status; retroactively cancel coverage; and deny renewals. Short-term plans may also increase uncompensated care for health care providers, the coalition wrote.
“This rule jeopardizes the insurance coverage of many Americans with complex medical needs that require strong, predictable insurance protection and care,” APA President Altha Stewart, M.D., said in a statement. “Without this coverage, patients with complex medical needs will suffer and often end up in emergency rooms, raising health care costs. We call upon the Administration to drop this rule and enforce the protections of the Affordable Care Act.”
For more information, see the Psychiatric News article “Trump Expands Low-Cost, Short-Term Health Plans.”