As of last Friday, Mainers have until Dec. 15 to enroll in health insurance for 2020 and health care advocates are cautioning people against the short-term “junk plans” littering the market.
Sold outside of the Affordable Care Act marketplace, these limited-duration plans do not follow most rules outlined in the ACA. They typically last less than a year, provide few benefits, and come with high deductibles.
“You see often that they will not offer maternity care, prescription drug coverage, and other benefits you are guaranteed to have in an ACA-qualified health plan,” said Kathryn Ende, the policy director for the Maine-based Consumers for Affordable Health Care. “They could also exclude coverage for pre-existing conditions, and they could have a benefit cap.”
A benefit cap limits how much the health plan will pay for certain services before shifting the costs to consumers.
Many Mainers who have purchased these plans in the past, Ende explained, didn’t understand what they were agreeing to.
“A lot of people were buying them thinking they were qualified health plans,” she said.
Although the Obama administration limited these plans so that they could only provide coverage for three months, the Trump administration has allowed these seemingly affordable plans to proliferate. Ende is concerned that increasing numbers of healthier, young people will be enticed to enroll in what they see as a cheaper health care alternative, which will ultimately disrupt the ACA marketplace.
“You have a cheaper premium, but that’s because they’re not covering as much,” Ende said. “A qualified health plan has to spend at least 80 cents of every dollar they collect in premiums on providing health coverage, and they’re only allowed to keep 20 percent of what they charge as profit. Short-term plans do not have to follow that, so they [have kept] more money from people and don’t cover as much.”
A new Maine law will restrict limited-duration plans so that they can only be sold in person, will be required to cover pre-existing conditions, and consumers will have to wait a year before they can potentially enroll in another limited-duration plan. But this law will not go into effect until January 2020, meaning Maine consumers, including the 100,000 people currently without insurance, will have to be wary of the plans they purchase online or over the phone.
“In order to get a qualified health plan, folks should be going to healthcare.gov or working with an in-person navigator,” Ende added.
Author: Cara DeRose