New plans in Iowa don't offer pre-existing condition protections
The new Trump era low-cost health plans rolling out for 2019 confirm critics' fears that the plans will offer fewer consumer protections. The plans don't have to follow the Affordable Care Act, which means they can sidestep the law's 10 essential health benefits.
The Des Moines Register reported that the Farm Bureau Federation's health coverage may reject people with pre-existing conditions. The Iowa legislature gave the Farm Bureau Federation the OK to offer the plans, which provide some protections, such as maternity, behavioral health, substance abuse and prescription drug benefits.
- Meanwhile, a federal judge scheduled a hearing about short-term health plans for Oct. 26. The plaintiffs filed a preliminary injunction motion in September arguing that the latest short-term plan rule was unlawful and will harm the ACA and health insurance industry.
The three Farm Bureau Health Plans are geared for Iowans who don't qualify for ACA tax credits, which help pay a person's healthcare premiums and out-of-pocket costs.
They offer some of the same protections found in the ACA, but lack in other areas, namely "applicants must pass underwriting to qualify for enrollment." This means people could get denied or pay much higher rates depending on their health status, including pre-existing conditions.
In a statement announcing the new plans, Craig Hill, Iowa Farm Bureau Federation president, said, "Although this may not be a solution for all, the Farm Bureau Health Plan may be an option for thousands who need an affordable plan that provides them comprehensive, renewable health coverage."
The Farm Bureau plans are not considered health insurance, unlike the ACA plans and individual market plans. Before the Republican-led Congress ended the individual mandate penalty as part of its tax legislation at the end of last year, these kinds of plans would not have complied with the ACA nor been considered health insurance. In other words, the federal government would have taxed those members at tax time for not being covered by health insurance.
Now, Iowans can drop their coverage and get a farm bureau plan without being penalized.
The Trump administration is changing regulations for limit short-term health plans and association health plans in 2019. Short-term plans will now be open to anyone rather than only young people or those who can't afford any other coverage. The plans will last 12 months rather than just three months. Members will also have the chance now to renew their short-term plans twice, so they would remain in effect last three years. This change gives short-term plans a more even playing field with ACA exchange plans.
A Center on Health Insurance Reforms at Georgetown University's Health Policy Institute report earlier this year found that ACA plan members who make more than 400% of the federal poverty level and therefore don't qualify for subsidies may flee the ACA plans because they face higher costs. Lower-income members, on the other hand, are more likely to stay in the exchanges since their subsidized plans protect them from significant rate hikes.
Despite the Trump administration's changes, not all states allow this kind of short-term coverage. Multiple states, including California and New York, don't allow the sale of short-term health plans.
Meanwhile, there are multiple court cases involving the ACA. A Texas case is looking to wipe out the law, and the Department of Justice is arguing in favor of that outcome. Other lawsuits, including one filed in Washington, D.C., look to protect the law from attacks. The plaintiffs, including the Association for Community Affiliated Plans, said expanding short-term plans would hurt the exchanges and wouldn't provide enough consumer protections.