The Association for Community Affiliated Plans filed a brief this week in the U.S. District Court of Appeals in response to its ongoing lawsuit challenging new Trump administration rules expanding coverage of short-term, limited duration insurance plans.
"At the risk of using jargon, this is crazy town bananapants," ACAP CEO Margaret Murray said in a statement Wednesday, drawing on the experience of one man with short-term insurance who recently thought he contracted the novel coronavirus, or COVID-19, and went to a U.S. hospital for testing.
Critics say the "junk plans" are being marketed as primary coverage and could destabilize insurance markets and leave patients with inadequate coverage. The plans are generally exempt from many Affordable Care Act rules such as coverage of preexisting conditions.
New rules issued by the Trump administration expanded coverage of the plans, designed to fill gaps in coverage for those transitioning between jobs or insurance plans. They now come with a renewal option lasting three years, where previous rules capped coverage after three months.
"We are also now seeing how junk insurance can be a threat to public health, as a man who returned from China with flu like symptoms was left with a bill for thousands of dollars after he went to get tested for coronavirus — and when it turned out he had the flu, his junk plan demanded three years’ worth of medical records to prove that the flu wasn’t caused by a pre-existing condition," Murray said in the statement.
Reporting from the Miami Herald confirmed that the man, Osmel Martinez Azcue, had a STLDI plan, which don't have to cover the ten essential health benefits under the ACA, and as a result are typically cheaper and attractive to younger, healthier adults with low premiums. But the coverage is not comprehensive, can have preexisting condition exclusions and annual or lifetime coverage limits.
Last year the Trump administration allowed short-term plans to be sold for longer than they had before, providing some with an alternative to enrolling in the more comprehensive and expensive Affordable Care Act plans.
Officials argue that extension is well within both their and patients’ rights, as outlined in the Health Insurance Portability and Accountability Act (HIPAA) of 1996. HIPAA says STLDI plans are not considered "individual health insurance coverage,"requiring an expiration date within 12 months.
Obama-era rules imposed three-month short-term coverage caps on insurers —later reversed by the current administration in attempts to dismantle the ACA — and now at the heart of the ACAP’s ongoing legal battle.
In July, a district judge ruled in favor of the Trump administration policy change in the lawsuit brought about by the ACAP and other groups, including the National Alliance on Mental Illness and AIDS United.
The ACAP represents 74 safety net health plans which provide health coverage to more than 20 million people, and argued that its member plans lost 100,000 subscribers since the rule went into effect in August 2018.
But without a sufficient link in the decline of ACAP member plans to an increase in short-term plan enrollment, the judge upheld the new rules ——a decision the plaintiffs’ soon appealed.
"This is a largely unregulated insurance product that uses fine print and bureaucracy to keep premium as profit and out of the hands of providers that deliver needed medical services," Murray said in Wednesday’s regarding the brief. "Unfortunately, these plans have been encouraged to proliferate — and it’s entirely possible that they may keep people from seeking needed medical attention and contribute to the spread of the coronavirus here in the U.S."