Lack of data prevents assessment of short-term insurance plans: GAO

A new study from the General Accounting Office (GAO) said that it is not clear whether short-term insurance plans were a good option for those who lost health insurance during the pandemic.

A lack of data on these short-term plans, which have a politically controversial history, hindered government regulators from assessing their effectiveness for both employer-sponsored insurance (ESI) plans and those offered through the Affordable Care Act (ACA), the study said.

“GAO found that limited and inconsistent data hinder understanding of the role short-term plans played during the COVID-19 pandemic for those who lost ESI, such as whether they were used by consumers as temporary coverage or as a longer-term alternative to [plans under the ACA],” the report said.

“Policy researchers and representatives of national organizations that GAO interviewed said there was a lack of comprehensive data and information on short-term plans, including data on how many people enroll in them and for how long. In addition, data collected on short-term plans varied across the six states that GAO reviewed.”

Short term plans expanded under Trump

Short-term insurance plans are controversial in part because they don’t have to follow rules set up by the ACA, such as required coverage of pre-existing conditions. The Trump Administration argued that easing the rules around how long an enrollee could remain on the plan would make such plans more affordable and accessible during the pandemic, when many had lost ESI plans.

Under the original ACA rules, short-term insurance plans had to be just that—limited in duration. The ACA put a limit of three months on enrollment in such plans. That was expanded under the Trump Administration, which allowed enrollees to extend their time on such plans as long as three years.

During Joe Biden’s campaign for President, he called the expanded short-term plans “junk insurance,” but since being elected, the Biden Administration has not changed the Trump-era rules.

GAO findings: not enough data

The GAO study noted that during the COVID-19 pandemic, millions of Americans lost their jobs and the employer-sponsored plans that came with those jobs. As part of its duties in reviewing COVID-19 relief efforts, GAO attempted to analyze the effectiveness of the expanded short-term plans.

The study looked at short-term plans in six states. It found serious limitations on the data, including:

• Two states did not have data on short-term plan enrollment.
• Three states reported fewer than 10,000 enrollees in short-term plans and trends varied as to whether enrollment increased or decreased.
• One state did not have short-term plans offered from 2019 through 2021.

“GAO found that limited and inconsistent data hinder understanding of the role short-term plans played during the COVID-19 pandemic for those who lost ESI, such as whether they were used by consumers as temporary coverage or as a longer-term alternative to PPACA-compliant plans,” the report said.

The study also noted that reviews from state officials were mixed: some said short-term plans met an important need for those who had lost ESI insurance. In other states, officials said the short-term plans did not provide good value to consumers.

One problem that the GAO report mentioned was that short-term plans are excluded from the very data-collecting and disclosure requirements that would allow regulators to compare plans.

“Unlike [ACA]-compliant plans, short-term plans are not subject to federal requirements to provide consumers with key information about their benefits that would facilitate comparison with other options,” the study said.