Short-term health plans leave consumers on the hook for massive medical costs, investigation finds

Short-term health plans routinely refuse to pay the costs of treating beneficiaries, but have seen a surge in enrollment as a result of Trump administration policies, according to a new report released Thursday from House Democrats.

Short-term plans don’t have to comply with ObamaCare’s coverage rules. The Energy and Commerce Committee investigation found that most plans will deny coverage or charge more for people with pre-existing conditions. 

The plans will also charge women more than men, and deny women basic health services, like preventive screening procedures and routine tests, including pelvic exams.

“These plans are a bad deal for consumers and oftentimes leave patients saddled with thousands of dollars in medical debt,” Energy and Commerce Chairman Frank Pallone Jr. (D- N.J.) and subcommittee chairwomen Anna Eshoo (D- Calif.) and Diana DeGette (D-Colo.) said in a statement.

The investigation found that there was an increase of more than 600,000 people enrolled in short-term plans during the 2019 plan year, compared to the 2018 plan year across nine insurers.

During the 2018 plan year, there were about 2.36 million consumers enrolled in short-term plans. Across those same nine companies, there were about 3 million consumers enrolled during the 2019 plan year.

Short-term plans were originally designed to fill gaps in insurance coverage for consumers, but the administration has allowed the plans to be renewed for up to three years, much longer than the previous three-month limit.

The Trump administration lifted restrictions on short-term plans to offer an alternative for customers who can’t afford ObamaCare plans, particularly those who make too much money to qualify for subsidies.

The plans are also available year-round, while sign-ups for ACA plans are limited to six weeks at the end of the calendar year.

“President Trump has brought more affordable insurance options back to the market, including through allowing the renewal of short-term plans. We’ve been abundantly clear that these plans aren’t for everyone, but short-term plans can be an affordable option for millions of men and women left behind by the Affordable Care Act,” a spokeswoman for the Department of Health and Human Services said. 

The House Democratic investigation into 14 companies that sell, or help people buy the plans, found “deceptive” and “misleading” marketing tactics used to attract customers who might not know their plans don’t cover all of the same benefits ObamaCare does, like prescription drugs or mental health care.

In a few cases, the  plans exclude coverage of routine care such as basic preventive care, wellness exams, pelvic exams, pap smears and birth control.

“Coverage limitations vary greatly from plan to plan and insurer to insurer, and limitations are not always made clear in marketing materials, making it extremely difficult for consumers to understand what they are purchasing,” the report found.

For instance, some of these plans impose a maximum of $500 per policy period for doctor’s office visits, a maximum of $1,000 per day for hospitalization, $500 per visit for emergency services, and maximum of $2,500 per surgery for surgeon services. 

“Consumers who fall sick while enrolled in one of these plans may incur huge, potentially ruinous medical costs,” the report said.

The report was released on the same day a coalition of GOP-led states and the Trump administration filed briefs at the Supreme Court urging the justices to overturn the entire health law.

“The unregulated landscape of [short-term] plans also serves as an unfortunate reminder of what a post-Affordable Care Act world would look like in the individual market, in the event that the legal challenge brought by Republican Attorneys General and supported by the Trump Administration succeeds in striking down the law,” the report said.

Tags Anna Eshoo Diana DeGette Donald Trump

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