Short-term health insurance plans under consideration

The Departments of Health & Human Services, Treasury and Labor earlier this week released a proposed rule that would amend the definition of “short-term, limited duration insurance” as it relates to individual health insurance coverage.

In short, the proposal would allow consumers to buy short-term insurance plans that last up to 12 months, as compared to a maximum of less than three months under current law. The proposal would also eliminate the requirement that insurance plans must cover 10 essential health benefits and pre-existing conditions without annual or lifetime limits as currently required under the Affordable Care Act (ACA).

The intent is to make insurance coverage more affordable for people who do not qualify for federal subsidies under the ACA. However, opponents, including the American Hospital Association, argue that the proposed change will encourage younger, healthier individuals to buy short-term plans, leaving sicker and more costly participants in the individual markets, thus driving up the cost of monthly premiums. It is estimated the rule change could increase federal subsidy payments annually by between $96 million and $168 million.

Comments regarding the proposed rule change must be submitted by April 23. To submit an electronic comment, click here.

For more detailed information, read the American Hospital Association’s Special Bulletin.