Analysis: What healthcare providers need to know about short-term limited-duration health insurance products going into 2020

• The Trump administration is encouraging consumers on the Obamacare individual market to seek help from private brokers, who are permitted to sell short-term health plans that critics deride as “junk,” according to The Washington Post.
• Under the ACA, all health insurance plans must cover 10 essential health benefits, but short-term health plans do not have to cover those services, according to the Post.
• The rule allowing the sale of such plans was finalized late last year, just weeks before open enrollment, so this is the first year they are widely available, according to the Post.

The Washington Post is reporting that, “The Trump administration is encouraging consumers on the Obamacare individual market to seek help from private brokers, who are permitted to sell short-term health plans that critics deride as ’junk’ because they don’t protect people with preexisting conditions, or cover costly services such as hospital care, in many cases. Consumers looking at their health insurance options on the website for the federal marketplace, called healthcare.gov, may be redirected to other enrollment sites, some of which allow consumers to click a tab entitled ’short-term plans‘ and see a list of those plans, often with significantly cheaper premiums. The rule allowing the sale of such plans was finalized late last year, just weeks before open enrollment, so this is the first year they are widely available.

“Under the ACA, all health insurance plans must cover 10 essential health benefits, including maternity and newborn care, prescription drugs, emergency room services and mental health. Short-term health plans do not have to cover those services, can discriminate against those with preexisting conditions and set caps on how much they are willing to pay, which is prohibited for Obamacare plans. Brokers often make higher commissions on short-term plans, health policy experts said, which gives them an incentive to sell them. They are supposed to present ACA-compliant plans to consumers, but can provide other options, including short-term plans. Some brokers make clear that such plans are not as comprehensive as ACA plans, but experiences differ.”

Takeaway

This is something providers will need to be aware this of going into 2020. The impact will be limited given there are approximately 10 to 11 million people enrolled on the exchanges at any given time. However, for those impacted, it will pose a significant challenge to the patient and provider. The hospital will be stuck between the patient, who may have thought they bought comprehensive coverage, and the plan that’s making limited payments based on the product sold to their member. These cases could exacerbate the risk of hospital medical accounts receivable resolution practices being scrutinized as reporters will inevitably highlight instances where consumers, either knowingly or unknowingly, bought one of these policies and then needed care that exceeded the relatively thin benefit these plans provide. As one CFO recently commented, “This isn’t our mess, but it is our problem.”  

Obviously, prevention is the best policy here.

The Kaiser Family Foundation has a good primer on short-term plans that can be used to help educate consumers.

Also, it’s another reason to make sure that it’s easy for patients to access hospitals’ patient financial assistance policies as recommended by HFMA’s Dollars & Sense, which is a compilation of industry-consensus recommendations and best practices for meeting consumers’ rising expectations, helping consumers make better healthcare decisions and improving the patient financial experience.