Obama administration looks to curb use of short-term health plans
09 Jun 2016

Obama administration looks to curb use of short-term health plans

09 Jun 2016

It is nice to know the President is reading my blog.

How else to explain today’s news that the administration is looking to curb the use of short-term plans to three months or less? Ok, I admit, maybe it was a low-level staffer at Health and Human Services who originally saw How to save $1,000 in health premiums over the next 4 months and they forwarded that up the chain of command. Still, I appreciate the implied compliment, Mr. President.

CNBC and Kaiser Health News both report today on the administration’s move to limit the maximum length of short-term plans to 3 months, without an option for renewal.

While the reasons cited are sound (only the healthiest people can obtain short-term coverage, and pulling healthy people from the overall insurance pool does ultimately raise the rates for others), short-term plans are often a last-resort option and fill a very specific need in the market.

We have clients who missed the open enrollment deadline. Their fault? Sure. But shouldn’t they be able to buy some coverage to protect them against catastrophic health expenses until the next open enrollment period?

Even more concerning, we are seeing cases of clients whose former employer screwed up in one way or another, e.g., the employer failed to pay premiums on the group health plan, employee coverage was canceled retroactively, and the employees didn’t find out until more than 60 days beyond the cancellation date. Note: 60 days happens to be the window to buy new minimum coverage following a qualifying event. Their fault? No way, but their only recourse would be to hire an attorney and hope for the best. But wouldn’t it be helpful if they could buy a short-term plan to cover the gap until they could get covered again?

You can learn more about short-term plans and whether they are right for you or someone you know, right here.

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