In and of itself, this wouldn't be too problematic as long as people are still ultimately enrolling in fully ACA-compliant policies and receiving ACA subsidies if they're eligible for them. Hell, one of these 3rd-party authorized web brokers even has a banner ad at the top of my website...which I only allow because this particular one only sells on-exchange ACA-compliant policies.
Critics say ‘junk plans’ are being pushed on ACA exchanges
The Trump administration has encouraged consumers to use private brokers, who often make more money if they sell the less robust plans.
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.
I've written a lot over the past nearly three years about the damage caused to ACA policy enrollment caused by the Trump Administration's slashing of 90% of HealthCare.Gov's marketing, awareness and outreach budgets.
A significant portion of the reduction in ACA exchange enrollment in 2017, 2018 and 2019 can be blamed squarely on this.
That's not just my opinion; it's been supported by detailed analysis as well as the corresponding increase in enrollment on state-based exchanges, which operate their own marketing/outreach budgets.
The following graph compares the two over the first six Open Enrollment Periods. I've had to adjust for the fact that since 2014, several states have switched from state exchanges to the federal one or vice-versa, but even so, the contrast is dramatic and clear:
I've written endlessly about #ShortAssPlans for several years now. Hell, I even put together a crude video explainer (see above) to explain what "Short-Term, Limited Duration plans" and "Association Health plans" are and why they should be tightly regulated, if not eliminated altogether.
However, the truth is that for all of my blog posts and warnings about these types of substandard policies, about 90% of my focus has been on how opening up the floodgates on them would negatively impact the ACA-compliant risk pool. It's a bit of a zero-sum game, after all: The more healthy people who leave one, the more sick on average the other one is, which means a higher risk pool of enrollees, which means higher premiums, which leads to more healthy people dropping out and so on...the infamous "death spiral".
What I've written much less about, however, is the other reason why #ShortAssPlans generally suck...namely, the plans themselves tend to...well, suck.
There is a long history of shady and inept operators of association health plans and related multiple employer welfare arrangements, with dozens of civil and criminal enforcement actions at the state and federal levels. The U.S. Government Accountability Office identified 144 "unauthorized or bogus" plans from 2000 to 2002, covering at least 15,000 employers and more than 200,000 policyholders, leaving $252 million in unpaid medical claims. Some were run as pyramid schemes, while others charged too little for premiums and became insolvent.
...Powerful words from DC District Court Judge John Bates in holding a Trump DOL rule unlawful: "The Final Rule was intended and designed to end run the requirements of the ACA, but it does so only by ignoring the language and purpose of both ERISA and the ACA."
One Ohio resident paid $240 a month for health insurance that she later learned didn’t cover her knee replacement. Saddled with $48,000 in medical bills, she decided not to get the other knee replaced.
...A Kansas resident paid premiums on a policy for two years, then found out his insurance would not cover surgery for a newly diagnosed cancer.
The two policyholders have filed a lawsuit in federal court against Health Insurance Innovations, based in Tampa, Fla., accusing the company of misleading them about the kind of policy they were buying.
They say they believed they were purchasing Affordable Care Act plans that include coverage guarantees. But they were sold much less comprehensive coverage that left them vulnerable to tens of thousands of dollars in unpaid medical bills, according to the lawsuit.
Sorry, I'm a little behind the 8-ball today...a few hours ago, the House Education & Labor Committee voted on and approved H.R.1010, which would reverse the Trump Administration's executive order which removed restrictions placed on so-called "short-term, limited duration" (STLD) healthcare policies, commonly known as "junk plans" since most ACA regulations/requirements don't apply.
Again, the short version (no pun intended) is this: Under the Obama Administration, STLDs were restricted to no more than 3 months at a time, and forbid them from being renewed within the same calendar year. They were always intended to be just that: Short-term only, and of limited duration, for certain people in special circumstances only.
Back in January I reported that the state of Colorado is joining several other states in cracking down on non-ACA compliant so-called "Short-Term, Limited Duration" healthcare policies. As of April 1st, STLDs:
Can last no longer than 6 months/year (still longer than the 3-mo limit under Obama)
Have to stick to the ACA's 3:1 age band limit on premiums
Must be guaranteed issue (no more medical underwriting)
They can still exclude coverage of pre-existing conditions, but there's a limit of 12 months on the lookback timeframe
Must cover all 10 of the ACA's Essential Health Benefits
Must follow other ACA community rating requirements (limiting variances to age, tobacco use and geographic area)
A minimum Medical Loss Ratio of 80% to match the ACA's MLR (currently CO only requires a 60% MLF)
In other words, Colorado just made STLDs follow most of the same rules as ACA-compliant policies.
Virginia Governor Ralph Northam has been out of the national news for the past month or so, keeping a low profile since the media frenzy over the "med school blackface photo" debacle subsided. Rightly or wrongly, in the end, in spite of pretty much everyone under the sun demanding that he resign, he stuck it out and outlasted the scandal by simply...not.
He isn't up for reelection (and in fact under Virginia law he can't run again anyway), he didn't actually commit any crimes or anything else impeachable, so it sounds like the state has pretty much just sort of accepted that he's gonna stick it out for another couple of years. In fact, according to this article in the Virginian-Pilot, he seems to have regained some of his pre-scandal stature:
Two months after a blackface photo in an old yearbook nearly ended the political career of Virginia Gov. Ralph Northam, his life seems mostly back to normal.
Senate OKs small business health-care bill
By Richard Craver Winston-Salem Journal
The state Senate gave initial approval Wednesday to a Senate bill that would allow small-business employers to offer an association health-insurance plan, or AHP, that could provide lower premium costs.
Senate Bill 86 received a 40-8 vote on second reading, but an objection to a third reading kept it on the Senate calendar until at least today.
The GOP holds a majority in the NC Senate, but only by 29 to 21, so stopping this there was apparently a lost cause. They also hold a 65 to 54 majority in the state House. I'm not sure whether SB 86 has already been voted on there or not. If it passes both, it would be up to Democratic Governor Roy Cooper to veto the bill.
Over the past year or so, ever since Donald Trump issued an executive order re-opening the floodgates on non-ACA compliant "short-term, limited duration" (STLD) healthcare policies (otherwise known as "junk plans" since they tend to have massive holes in coverage and leave enrollees exposed to financial ruin in many cases), numerous states have passed laws locking in restrictions on them or, in a few cases, eliminating them altogether:
A big shout-out to Josh Dorner for providing a roundup of the current status of a five different lawsuits (six, really, although two of them are on the same topic in two different states) fighting back against GOP/Trump Administration sabotage of the Affordable Care Act, including:
The "Take Care" lawsuit (which tackles the Trump Admin slashing HC.gov's marketing budget, outreach budget, open enrollment period length and more)
There's also the various CSR reimbursement payment lawsuits filed by various insurance carriers. Those should have been a fairly minor issue only relating to about $2 billion in payments dating back to the 4th quarter of 2017...but as I explained in detail here, these suits may instead turn into an even more massive headache for the Trump Administration, and rightly so.
A couple of weeks ago, Louise Norris gave me a heads up that not only has the New Mexico Insurance Dept. restricted the sale of non-ACA compliant "short-term, limited duration" plans to be...you know...both short term and of limited duration via regulation...
In September 2018, the New Mexico Office of the Superintendent of Insurance (OSI) and Health Action NM (an advocacy group for universal access to health care) presented details about potential state actions to stabilize the individual market. OSI has the authority to regulate some aspects of the plans, including maximum duration, but they noted that legislation would be needed for other changes, including minimum loss ratios and benefit mandates.
New Mexico’s insurance regulations were amended, effective February 1, 2019, to define short-term plans as nonrenewable, and with terms of no more than three months. The regulations also prohibit insurers from selling a short-term plan to anyone who has had short-term coverage within the previous 12 months.