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1/ Bloomberg has a must-read story out today on short-term, limited duration junk insurance plans that the Trump administration is promoting as an alternative to comprehensive ACA plans. The story highlights how bad these plans are for consumers. bloomberg.com/news/features/…
2/ First, they are called junk plans for a reason. While ACA plans are required to cover Essential Health Benefits, junk plans Deny access to basic benefits, such as prescription drugs, maternity care, and mental health and substance use disorder treatment.
3/ And when it comes to pre-existing conditions, they are doubly bad for consumers. Junk plans can set higher premiums based on age, gender, and health status, charging older people, women, or anyone with a history of physical or mental health problems more.
4/ Junk plans can also deny coverage outright for your preexisting condition, both when you purchase the plan and even later when you make a claim and then they retroactively rescind your coverage. This happens to be people in real life.
5/ For example, a woman in Illinois went to the hospital with heavy vaginal bleeding resulting in a five-day hospital stay and a hysterectomy, only to be denied coverage under her junk plan on the ground that her menstrual cycle constituted a pre-existing condition.
6/ A man in D.C., purchased a junk plan with a stated maximum payout of $750,000; when he sought coverage for a $211,000 bill resulting from a hospitalization, however, he was paid only $11,780, in part due to a denial of coverage based on his father’s medical history.
7/ Junk plans also don't even serve as adequate catastrophic coverage. Insurers are allowed to set extremely high deductibles and to cap what they pay for health care, exposing enrollees to high out-of-pocket costs. Plus this comes with the aforementioned denials and exclusions.
8/ Under the ACA, regular insurers are required to spend 80-85% of premiums on actual medical care. If they don't, they have to give the money back in the form of rebates. Because of this rule, consumers are getting $743 MILLION back just this year. wsj.com/articles/healt…
9/ But junk plans are exempt from this rule, called the medical-loss ratio. A recent study found that some junk plans spend as little as 9 cents on the dollar on medical care. Again, that's compared to 80-85 cents on the dollar for ACA plans. khn.org/morning-breako…
10/ Aggressive marketing of junk plans is also confusing for consumers, who think they are getting real insurance but instead end up with a junk plan.
11/ A study found that, "Consumers shopping online for health insurance, including those using search terms such as 'Obamacare plans' or 'ACA enroll,' will most often be directed to websites and brokers selling STLDI or other non-ACA compliant products." rwjf.org/en/library/res…
12/ Another problem with junk plans, and one of the reason the Trump admin dramatically expanded their sale, is that they undermine the ACA marketplaces by drawing out healthier people. That leaves sicker people in the ACA risk people, driving up premiums.
13/ @CenterOnBudget wrote about the risks of rising premiums for sicker people and the many other problems associated with junk plans. cbpp.org/blog/blocking-…
@CenterOnBudget 14/ Even Trump's Council of Economic advisers admitted this in a report: “healthier-than-average members” are likely to leave the exchanges as a result of the STLDI rule. “their departure is expected to somewhat raise gross premiums for those who remain on the exchanges.”
@CenterOnBudget 15/ The Trump rule dramatically expanding the sale of junk plans turns the idea of "short-term, limited duration" on its head. It changed the definition of short-term from 90 days to 364 days and limited-duration went from 12 months to 36 months.
@CenterOnBudget 16/ Before, these plans really filled short-term gaps, but now they are being marketed and promoted as substitutes for comprehensive insurance. Expanding junk plans is also a way to get around Congress' very clear intent in creating Essential Health Benefits required by the ACA.
@CenterOnBudget 17/ The Association for Community Affiliated Plans (ACAP), National Alliance on Mental Illness (NAMI), Mental Health America, American Psychiatric Association (APA), AIDS United, National Partnership for Women & Families, and Little Lobbyists sued to block the junk plan rule.
@CenterOnBudget 18/ A lower court let the junk plan rule stand, but the lawsuit is currently on appeal to the D.C. Circuit. You can read all about it here. stopjunkinsurance.com
@CenterOnBudget 19/ The good news is that states can protect consumers by cracking down on junk plans and some are doing so. @commonwealthfnd wrote about state efforts earlier this year. commonwealthfund.org/publications/i…
@CenterOnBudget @commonwealthfnd 20/ In case you need more evidence about how woefully inadequate junk plans are, @ACSCAN did a detailed report on plans being sold in Florida, Illinois, Maine, Pennsylvania, Texas, and Wisconsin. fightcancer.org/policy-resourc…
@CenterOnBudget @commonwealthfnd @ACSCAN 21/ To go back to the couple featured in Bloomberg's excellent report, they thought they had comprehensive insurance. Instead, they ended up with a junk plan that left them with $244,447 in medical bills, "three times the value of the [their] home," after a heart attack + bypass.
