Short-term plans are considerably cheaper than those operating under ACA requirements because they don't have to cover the ACA's 10 essential benefit categories. (Photo: Shutterstock)
Another day, another ACA lawsuit.
Seven health care industry and advocacy groups have brought suit against the Trump administration to keep short-term health plans from being expanded.
As reported by Modern Healthcare, the groups, including the Association for Community Affiliated Plans and the American Psychiatric Association, are challenging the rule from the administration that would expand the availability of short-term plans—which don't comply with the consumer protection rules in the Affordable Care Act—on the grounds that the rule violates the intend of the ACA to make “low-cost comprehensive insurance available” to Americans.
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This is just the most recent lawsuit against actions taken by the administration to cut back on or circumvent ACA coverage rules and insurance expansion. According to Modern Healthcare, other court actions would “halt the implementation of Medicaid work requirements, stop the expansion of association health plans, preserve contraceptive coverage, and overturn actions denying cost-sharing and risk-corridor payments to insurers.”
“We're very concerned that some plans in the ACA market may drop out because this will draw low-risk people out of the marketplace and increase unfair competition from plans that aren't subject to the same rules,” Margaret Murray, CEO of the Association for Community Affiliated Plans, representing safety-net insurers, told Modern Healthcare.
In a statement, a Centers for Medicare and Medicaid spokeswoman said the short-term plans “are an important option for people in certain circumstances and the Trump administration is committed to delivering greater access to more affordable choices to the men and women left out by Obamacare.”
The rule, which would take effect on October 2, would let people buy short-term plans that only last 364 days—but it would also let insurers renew such plans for up to 36 months. The plans are considerably cheaper than those operating under ACA requirements because they don't have to cover the ACA's 10 essential benefit categories, which include mental healthcare, maternity care and prescription drugs. They also can deny customers coverage because of preexisting conditions or charge higher prices based on age, heath status and gender—and without caps on out-of-pocket expenses.
The seven groups allege that the rule would transform the ACA's narrow exemption for short-term plans “into a loophole that would permit the creation of a parallel individual insurance market consisting of plans that are not subject to the ACA's consumer protection standards. This result cannot be reconciled with the text, structure, or purpose of the ACA.”
They also say that neither Health and Human Services, the Department of Labor nor the Treasury Department have provided any “well-reasoned justification” to eliminate the ACA's 2016 rule that limited short-term plans to three months, from the previous limit of 364 days. In addition, the suit alleges that those agencies failed to disclose when the new rule was proposed that they intended to let short-term plans be renewed at all, much less for 36 months.
Abbe Gluck, a health law professor at Yale University who supports the ACA, told Modern Healthcare that the new rule's proposed changes and extensions to short-term insurance are “not a reasonable interpretation of the law.”
The fear is that so many consumers will switch to the cheaper short-term plans that the stability of the ACA marketplace will be threatened, with premiums being driven up as only older and sicker consumers remain. But additional challenges to Trump administration changes to the law await.
“What we saw throughout the Obama administration was dozens of lawsuits filed by right-wing groups trying to eviscerate the ACA,” Tim Jost, an emeritus law professor at Washington and Lee University who supports the law, said. “Now things have flipped. There will be a new lawsuit every time the Trump administration does something to undermine the ACA. He keeps saying he's trying to destroy it. It's not surprising people are taking him seriously.”
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
