Most discussion of the Trump administration's finalized rule allowing short-term health plans to be sold for a term of up to one year and renewed for up to three years spotlights not only the likely damage to risk pools in the ACA-compliant market, but also the dangers to enrollees posed by far-from-comprehensive insurance.
The Kaiser Family Foundation, for example, analyzed current short-term offerings available in 45 states. The report emphasized the impact of medical underwriting, exclusions for pre-existing conditions, medical loss ratios averaging 67% (and 50% for the two largest carriers) -- and the holes in coverage:
When reading about such Swiss-cheese coverage, I've wondered: what if the federal government or a state required these medically underwritten plans to meet ACA standards, or something close to them? -- e.g., cover Essential Health Benefits, offer actuarial value of at least 60%, perhaps meet a minimum MLR of, say 75%? Or: what if insurers decided to take advantage of a new market opportunity and offer ACA-comparable plans in the noncompliant market? Suppose they offered EHBs and a relatively high actuarial value, but with a yearly benefit cap?
I suspect that the public policy impact might be worse than under current rules, which allow plans to exclude pretty much whatever they want.
The Kaiser Family Foundation, for example, analyzed current short-term offerings available in 45 states. The report emphasized the impact of medical underwriting, exclusions for pre-existing conditions, medical loss ratios averaging 67% (and 50% for the two largest carriers) -- and the holes in coverage:
Of the short-term products offered on eHealth and/or Agile Health Insurance across all states, 43% do not cover mental health services, 62% do not cover services for substance abuse treatment (both alcohol and other drugs), 71% do not cover outpatient prescription drugs, and no plans cover maternity care. In seven states, none of these four benefit categories are covered in the short-term policies offered.The plans on offer on eHealth.com do look pretty bad. I looked at one that does provide "prescription drug coverage" -- with a relatively low deductible of $1000 -- but with this caveat:
Covered after plan deductible when prescribed on an inpatient basis for a covered Injury or Sickness. Outpatient not covered; discount only.As for the hospital where you have to get that covered drug prescription: benefits are capped at $1000/day.
When reading about such Swiss-cheese coverage, I've wondered: what if the federal government or a state required these medically underwritten plans to meet ACA standards, or something close to them? -- e.g., cover Essential Health Benefits, offer actuarial value of at least 60%, perhaps meet a minimum MLR of, say 75%? Or: what if insurers decided to take advantage of a new market opportunity and offer ACA-comparable plans in the noncompliant market? Suppose they offered EHBs and a relatively high actuarial value, but with a yearly benefit cap?
I suspect that the public policy impact might be worse than under current rules, which allow plans to exclude pretty much whatever they want.
