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Shelley Starkey

States Respond to Federal Expansion of Short-Term Health Plans

August 23, 2018 | Health Insurance Exchanges | Comments
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Many states across the country are pushing back against the Trump Administration’s recent expansion of short-term health plans, which would make bare-bones plans that are exempt from critical coverage provisions of the Affordable Care Act more widely available in the individual market. Officials in California, Illinois, Vermont, and Hawaii are seeking varied solutions to limit the effects of the change. The National Council strongly opposes the recent federal ruling to expand short-term health plans.

 THE PROBLEM WITH SHORT-TERM HEALTH PLANS

Prior to the final rule issued earlier this month, short-term health plans were meant to serve as a temporary, limited coverage option during times of transition for up to three months. Now, insurers can sell these plans for an initial period of one year and can renew them for up to three years. These 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.

 STATE-LEVEL RESPONSES

To combat the recent rule change, state officials ranging from insurance commissioners to legislators and governors are devising their own responses to limit the impact on their constituents. California’s legislature recently passed a bill to ban the sale of these plans outright, and the provision awaits Governor Jerry Brown’s signature. Maryland and Vermont have already enacted new laws in response to the federal ruling to limit the length of these policies to three months or less. Legislation in Illinois would limit the length of these policies to 180 days awaits Governor Bruce Rauner’s signature.

To learn more about the numerous problems and shortfalls of these short-term health plans, especially for individuals living with mental illness and substance use disorders, read this report compiled by the National Council in partnership with Families USA, Mental Health America, and the National Alliance on Mental Illness.