Washington, D.C. – U.S. Senator Joe Donnelly today released the following statement after the Departments of Labor, Treasury, and Health and Human Services finalized their rules around short-term insurance plans. These plans continue the Administration’s efforts to undermine health insurance markets and are expected to raise health care costs for Hoosiers, while failing to offer essential coverage and protections for those with pre-existing conditions.
Donnelly said, “These plans will allow insurance companies to deny coverage to those with pre-existing conditions, raise premiums for Hoosier families, and continue the Administration’s efforts to undermine health care markets. I continue to believe that rather than taking harmful actions the Administration should work together in a bipartisan manner to make quality health care more affordable and accessible.”
The new rule on short-term health plans will allow consumers to buy so-called “junk” plans for up to 364 days at time, reversing the current limitation that these plans can only be used for three months at a time as a bridge option for consumers. These plans, sold outside of the current health insurance exchanges, including in Indiana, allow insurers to deny coverage for those with pre-existing conditions. Short-term “junk” plans are scheduled to become available in two months, which could further harm the individual marketplace when open enrollment begins for consumers this fall.
These plans will allow insurers to charge more when consumers are sick and higher rates for older Hoosiers. In addition, these plans are not required to cover essential health care benefits including emergency services, mental health care, prescription drugs, or preventative care. The “junk” plans can be renewed for a maximum of up to three years, however insurers could choose not to allow consumers to extend coverage if someone gets sick or is diagnosed with cancer or another disease, for example.
According to the Kaiser Family Foundation, approximately 30 percent of Hoosiers under the age of 65 (more than 1.1 million people) have pre-existing conditions that could have left them with no coverage or facing higher rates, before the Affordable Care Act prohibited such discrimination.
The Centers for Medicare and Medicaid Services Chief Actuary projected earlier this year that the short-term plan rule would raise premiums and cost the federal government $38.7 billion.
21 patient groups sent a letter to the Departments of Labor, Treasury, and Health and Human Services opposing the short-term plan rule, writing “we are deeply concerned about the impact the proposed rule on short-term plans will have on the individuals and families we represent.” These groups include the American Cancer Society Cancer Action Network, American Heart Association, American Lung Association, and Cystic Fibrosis Foundation. In addition, 98% of health care groups who commented on the proposed rule were in opposition.
For the 2019 enrollment period, as part of its ongoing efforts to sabotage health insurance markets, the Administration will encourage organizations that do receive enrollment funding to promote off-market “junk” insurance plans that do not cover pre-existing conditions or offer other basic benefits and protections.