August 10, 2018

Wade: State law forbids sale of short-term health plans

The Connecticut Insurance Department has determined state law prohibits the sale of skimpy "short term" plans that are being promoted by President Donald Trump as a cheaper alternative to Affordable Care Act coverage.

"Connecticut already has the necessary statutory consumer protections in place to prohibit 'junk plans' " Insurance Commissioner Katharine Wade said in a statement released Thursday.

The department also said a review of the new Trump administration rules for short-term, limited duration plans require any of these policies sold in the state to cover the Affordable Care Act's comprehensive "essential health benefits."

Those essential benefits include hospitalization and outpatient care, as well as mental health, maternity, prescription drug coverage, pediatric care and rehabilitative services.

The ACA allowed people to purchase short-term plans, which usually lacked maternity, mental health, full drug benefit and other coverages, but limited their coverage period to three months. These policies were also not renewable.

But the Trump administration's new rules, issued Aug. 1, allow for nearly a year's coverage under a short-term plan. They also allow short -term plans to be renewed for up to three years.

Unlike other policies, short-term plans can bar coverage for people with pre-existing health conditions.

The Connecticut Insurance Department said state law prohibits exclusions for pre-existing conditions for any policy that has coverage of six months or longer.

Policies with coverage periods shorter than six months, however, can exclude coverage for people with pre-existing conditions, under state law.

On Thursday, the White House issued a release detailing what it called "Obamacare's failures," which included rising premiums, and extoling the administration's steps to "expand insurance options," including promoting the sale of short-term plans.

"The plans are expected to be utilized by millions and be up to 50 percent to 80 percent cheaper than Obamacare options," the White House said.

Critics of the administration's action say expanded short-term plans will attract younger, healthier consumers and force insurers to raise premiums on everyone else.

"The Trump administration's drive to undo many of the protections in the federal Affordable Care Act has created great uncertainty and concern," Wade said. "The bedrock principle of this important legislation was to create large risk pools and ultimately bring down the cost of health insurance premiums."

Sen. Richard Blumenthal, D-Conn., and Rep. Rosa DeLauro, D-3rd District, decried the expansion of short-term plans and urged Wade to impose extensive consumer protections on any new policies that might be offered.

On Thursday, Wade wrote Blumenthal that Connecticut law already protected consumers from the coverage limitations of short-term plans.

Other states, including New Jersey and Massachusetts, also regulate short-term plans to make them follow nearly all the same insurance rules that the Affordable Care Act plans have. In some of those states, carriers have decided against offering any short-term plans at all.

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