Insurers, consumer groups are critical of HHS move on short-term insurance plans

Healthcare advocacy groups and other stakeholders are speaking out against the Trump administration’s decision to allow short-term healthcare insurance plans to extend up to three years. Short-term plans, which are intended to temporarily cover those without coverage and aren’t required to follow Affordable Care Act (ACA) protections, were previously limited to three months.

HHS Secretary Alex Azar announced the final rule on Wednesday, August 1, to allow short-term plans to run up to 12 months, with renewal options up to 36 months. He argued the plans offer some Americans a more affordable insurance option.

The expansion was met with backlash from major industry stakeholders. Twenty-five groups representing more than 100 million American consumers—including the American Heart Association, American Cancer Society and American Lung Association—were “deeply troubled” by the decision.

“Despite serious concerns expressed by individuals and organizations across the entire spectrum of our health care system, the administration has finalized a rule that will reintroduce health insurance discrimination based on gender, health status, age and pre-existing conditions,” the organizations wrote in a joint statement.

At least one major health insurance provider, Blue Cross Blue Shield Association, was also firmly against the expansion of the plans.

“The broader availability and longer duration of slimmed-down policies that do not provide comprehensive coverage has the potential to harm consumers, both by making comprehensive coverage more expensive and by leaving some consumers unaware of the risks of these policies,” BCBSA Vice President Justine Handelman said in a statement.

Three states—New York, New Jersey and Massachusetts—have already banned short-term insurance policies, and California is also weighing legislation to outlaw the sale of such plans. Democratic Massachusetts Senator Elizabeth Warren referred to the plans as “junk plans” via Twitter.

Others in the space argue extending the plans could harm patients because they don’t provide comprehensive coverage.

“Short-term plans were designed to provide temporary insurance during gaps in coverage, such as when a person changes jobs,” the American College of Physicians said in a statement. “Because they were meant to be used for a limited time period, the plans are not required to meet many of the patient protections required by standard insurance regulations and known to improve health outcomes.”

Some see the Trump policy may as another measure that will destabilize the insurance market. Blue Cross and Blue Shield of North Carolina announced it was lowering ACA plan rates by an average of 4.1 percent to consumers at the end of July, the first decrease of its kind by the provider.

“Short-term health plans will harm the existing health insurance market and undermine critical provisions that protect against the age tax, against discrimination based on pre-existing conditions, against lifetime limits, and against the loss of important benefits,” David Certner, AARP legislative counsel and legislative policy director, tweeted on Aug. 1.

HHS Secretary Alex Azar defended the decision and took a swipe at those launching criticisms at the plan options.

“The same people who often criticize these [plans] are the same people who wrote the ACA that expressly provides for short-term limited-duration plans,” Azar said in a CNBC interview.