- 656
A few excerpts from a new article in Modern Healthcare about how use of STH plans is expected to grow, but consumers should be wary of them...
It's expected that more people will select short-term plans if they are again sold for 364-day periods—particularly starting in 2019 when repeal of the penalty for not obtaining ACA-compliant insurance takes effect.
That worries health policy analysts, state regulators and major insurance trade groups, who predict short-term plans will siphon off healthier customers, leave the more comprehensive Obamacare plans with a sicker group of customers, and drive up premiums.
They're also concerned about the newly expanded association health plans recently proposed by the Trump administration...
Exacerbating these fears is that insurers and brokers typically advise short-term plan customers that if they do get injured or sick, they can return to the ACA's guaranteed-issue marketplace at open-enrollment time and buy a plan that covers their condition. That threatens to create even greater risk segmentation between the two markets.
The growth of the short-term market also increases the potential for consumer confusion, because people don't necessarily realize the limits of noncompliant plans, which can saddle them with large, unforeseen costs for uncovered conditions and services. States are eying stepped-up regulation, including setting tougher disclosure requirements. Currently, only New York and New Jersey effectively prohibit short-term plans...
With their limited benefits, short-term plans pay out much less of their premium revenue for medical claims than ACA-compliant plans—67.4% versus 92.9% in 2016, according to data from the National Association of Insurance Commissioners and the CMS...
Adding to consumer confusion, some insurers, such as American National Life, are selling products that combine features of short-term plans and scheduled-benefits indemnity plans. These hybrids include payment caps for specific services, for instance a $2,000-a-day limit for a hospital stay or a $2,500 maximum for a surgeon's fee.
Limited-benefit indemnity plans generally are offered on a guaranteed-renewal basis, while short-term plans are not, which is not always made clear to consumers.
"People were calling and saying they were told they could get a guaranteed-renewable short-term policy, and after asking more questions, I found out they were being offered a scheduled-benefits plan," said Mike Higgins, a broker in Phoenix who mostly sells plans to self-employed small-business owners. "Those plans are dangerous—$2,000 a day sounds great until you have a serious illness or accident, and then you're off to the poorhouse quickly."
Lots more in the article link:
Short-term health plans could saddle ACA plans with a sicker group of customers and drive up costs.
It's expected that more people will select short-term plans if they are again sold for 364-day periods—particularly starting in 2019 when repeal of the penalty for not obtaining ACA-compliant insurance takes effect.
That worries health policy analysts, state regulators and major insurance trade groups, who predict short-term plans will siphon off healthier customers, leave the more comprehensive Obamacare plans with a sicker group of customers, and drive up premiums.
They're also concerned about the newly expanded association health plans recently proposed by the Trump administration...
Exacerbating these fears is that insurers and brokers typically advise short-term plan customers that if they do get injured or sick, they can return to the ACA's guaranteed-issue marketplace at open-enrollment time and buy a plan that covers their condition. That threatens to create even greater risk segmentation between the two markets.
The growth of the short-term market also increases the potential for consumer confusion, because people don't necessarily realize the limits of noncompliant plans, which can saddle them with large, unforeseen costs for uncovered conditions and services. States are eying stepped-up regulation, including setting tougher disclosure requirements. Currently, only New York and New Jersey effectively prohibit short-term plans...
With their limited benefits, short-term plans pay out much less of their premium revenue for medical claims than ACA-compliant plans—67.4% versus 92.9% in 2016, according to data from the National Association of Insurance Commissioners and the CMS...
Adding to consumer confusion, some insurers, such as American National Life, are selling products that combine features of short-term plans and scheduled-benefits indemnity plans. These hybrids include payment caps for specific services, for instance a $2,000-a-day limit for a hospital stay or a $2,500 maximum for a surgeon's fee.
Limited-benefit indemnity plans generally are offered on a guaranteed-renewal basis, while short-term plans are not, which is not always made clear to consumers.
"People were calling and saying they were told they could get a guaranteed-renewable short-term policy, and after asking more questions, I found out they were being offered a scheduled-benefits plan," said Mike Higgins, a broker in Phoenix who mostly sells plans to self-employed small-business owners. "Those plans are dangerous—$2,000 a day sounds great until you have a serious illness or accident, and then you're off to the poorhouse quickly."
Lots more in the article link:
Short-term health plans could saddle ACA plans with a sicker group of customers and drive up costs.
