Final Rule Expands Health Plans Exempt from Affordable Care Act
Beginning in October, bare-bones, short-term health plans that are exempt from critical coverage provisions of the Affordable Care Act (ACA), will become more widespread in the insurance market. A final rule issued this week by the Departments of Health and Human Services (HHS), Labor and Treasury would permit the sale of limited health coverage plans that expose consumers to more risks and potentially larger medical bills when seeking critical care. The National Council strongly opposes any moves that undermine the availability of comprehensive coverage, including mental health and addiction benefits offered at parity.
Before this final rule, short-term health plans were limited to three months, and were meant to provide individuals with limited coverage during times of transition until they could obtain comprehensive coverage that is ACA-compliant. Under the new rule, insurers can sell these plans for an initial period of up to 12 months, and they can be renewed year-to-year for up to 36 months. Short-term plans are exempt from many important provisions including: parity for behavioral health coverage – the requirement that behavioral health services be covered at the same rate as medical and surgical coverage; the essential health benefits that require coverage for services including mental health and substance use disorder treatment; and requirements that prevent plans from denying coverage for individuals with pre-existing conditions like mental illness and chronic diseases.
ADVOCATES AGREE: SHORT-TERM PLANS INADEQUATE
The National Council, in partnership with Families USA, Mental Health America, and the National Alliance on Mental Illness, recently released a report that details our concerns with expanding these short-term plans. Several key conclusions and recommendations of the report stand in direct opposition to the implications of this final rule. The new rule requires short-term plans to notify customers that these plans are not ACA-compliant, do not exempt them from paying penalties in 2018 under the requirement that all individuals have qualifying health insurance, and they do not provide minimum essential health benefits. However, the report concludes that these notices are often unclear and misleading for consumers. Individuals may not realize the extent to which health care services such as those related to a suicide attempt or drug overdose are not covered under these plans, as the exclusions “are often buried in fine print.”
Additionally, since these plans are not subjected to laws around parity and essential health benefits, “coverage of mental health and substance use services within short-term plans is either nonexistent or woefully inadequate,” according to the report.
THE BOTTOM LINE
By expanding these insufficient health plans, the Trump Administration has opened the door for Americans to purchase health insurance that lacks the proper protections and coverage options for their needed care. The National Council remains concerned for the impact that this rule would have on the lives of individuals living with mental illness and addiction.