Source: Queens Gazette: I On Politics

By John Toscano

Congress Member Carolyn B. Maloney (D-NY) wrote to US Secretary of Health and Human Services Alex Azar, US Secretary of Labor Alexander Acosta and US Secretary of the Treasury Steven Mnuchin on April 23 urging them to withdraw a proposed rule from their departments “that will endanger Americans’ health.” The proposed rule, from February 21, would extend the allowable duration of short-term, limited-duration (STLD) insurance from 3 months to up to 12 months. “These STLD plans are often referred to as ‘junk insurance’ because of the substandard coverage they provide. This proposed change will destabilize the individual insurance marketplace and provide substandard coverage,” Maloney explained.

Congress Member Maloney argues in her letter that “[T]his rule will again leave Americans more vulnerable to financial hardship should they become ill. Customers who purchase STLD plans may be shocked and unprepared to pay for medical expenses they thought would be included in any product sold as ‘health insurance,’ such as prescription drug coverage, specialist visits, or chronic disease treatment.”

“In addition to defrauding customers, these plans will result in 8.1 million less Americans with minimum essential coverage, create market instability, and lead to increased costs for those remaining in the ACA individual marketplace,” Maloney said.

In her letter she stated that “the substandard coverage…does not include basic healthcare services, like mental health treatment, maternity care, and substance abuse services.

“These plans are exempt from complying with ACA health insurance mandates. For instance, they can enforce lifetime or annual limits and charge people with pre-existing conditions higher rates.

“While STLD policyholders will be subject to significant out-of-pocket costs and customers in the ACA-compliant individual insurance market experience premium increases estimated to be up to 18.3%, insurance companies will reap large profits selling these plans which provide minimal coverage… As a result, brokers are likely to market these plans very aggressively, and consumers may purchase them without understanding how they differ from compliant plans.

“While the proposed rule published by the Departments estimated that federal spending would increase $168 million as a result of these policy changes, (the journal) Health Affairs predicts federal outlays to increase by up to $3.1 billion.

“A deeply unfortunate consequence of the introduction of these plans will be the remaining 2.6 million STLD customers who currently have ACA-compliant plans but will switch to an STLD plan that has a mere fraction of the benefits they had previously, creating market instability and increased costs for those remaining in the ACA individual marketplace.

STLD plans are intended to provide policyholders an option for bare minimum health insurance coverage during short periods of transition, such as changing jobs or unemployment.

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