Short-term, limited-duration health plans pose risks for patients, healthcare providers
As a healthcare executive with over 38 years’ experience in provider and health plan services, I have serious concerns regarding the consumer value and reliability of short-term, limited-duration insurance. Sentara Healthcare has evaluated the merits of these plans, but because they do not align with our values and mission to provide high-quality, value-driven healthcare, we have decided not to offer them at this time.
The challenges of short-term plans include their provision of narrow coverage, potential for denial of coverage for pre-existing conditions, and risk of sudden coverage termination. Policymakers and regulators have not fully considered the consequences of and public reaction to transforming shortterm plans from a stop-gap measure to a substitute for more comprehensive plans provided through the Affordable Care Act.
The rule issued in the Federal Register in August 2018 authorized states to implement expanded short-term insurance coverage beyond a three-month to a 12-month period with options to extend up to 36 months. This insurance model may create unintended consequences that destabilize the already precarious economics of the exchange market.
There is evidence that this destabilization of the exchange market is already happening. Modern Healthcare reported that more unsubsidized customers opted for short-term plans over unsubsidized ACA-compliant plans during the first half of the open-enrollment period for 2019 coverage than in the previous open enrollment. Also, 70% of eHealth customers enrolled in a short-term plan, while only 30% opted to buy an ACA plan at full cost; compared with the 56% of customers who chose short-term plans in 2018 (ModernHealthcare.com, Nov. 28, 2018).
Customers continue to make complex decisions regarding their health coverage with limited information and visibility into the coverage they are selecting. Even with the push toward transparency, the health insurance market remains a difficult arena for customers to navigate.
Short-term policies are most attractive to relatively young, healthy individuals who aren’t eligible for exchange subsidies and want low-cost insurance solutions. These policies look positive on the surface but can lead to individuals and families being denied a meaningful scope of coverage, services or renewals. Individuals covered under these shortterm policies can find themselves suddenly unable to renew or dropped from their policy after a life-altering diagnosis—already one of the most vulnerable and uncertain moments of a person’s life. They often remain uninsured until the next open enrollment.
The limited consumer protections of short-term plans reverberate across our complex healthcare ecosystem. Most analyses indicate that short-term health plans will be an additional destabilizer of the exchange market. The Congressional Budget Office predicted that premiums would continue to rise as healthier indi- vidual consumers naturally shift toward the narrow-coverage, lower-cost option.
Health systems are also at risk of unintended consequences from these policy changes. Short-term policies are not required to cover the 10 essential health benefits established in the ACA. The longer coverage period of the policies and lack of essential coverage inherently puts health systems at risk for increases in uncompensated care. The limited services covered by short-term health plans may further amplify this effect by increasing individuals’ dependence on emergency departments.
As an integrated system with a notfor-profit mission, Sentara strives to offer reliable access to appropriate healthcare and services. The shortterm health plans might add value to the market as a stop-gap measure while individuals transition to more comprehensive coverage. But offering short-term insurance may put health systems at risk for customer dissatisfaction when their expectations are not met by the limitations of the short-term coverage. The resulting community dissatisfaction would fall squarely on the health plans and health systems offering these products.
The ACA made many positive strides in providing a predictable, guaranteed level of coverage. We should not allow short-term policies to let us slide back toward past problems. States, health systems and health plans all have an important role in delivering high-quality, affordable care.