Welcome to Health Insurance HQ—coming to you from the experts at The Actors Fund’s Artists Health Insurance Resource Center and special guests!
Listen up, friends!
This is important. In October 2017, President Trump signed an executive order that allowed the government to expand the availability of short-term insurance plans and association plans. This order could significantly limit the protections available to you as a health care consumer, and increase the costs of your premiums by at least 18 percent.
What are short-term plans? Short-term plans were originally designed to provide temporary coverage during unexpected coverage gaps. In January 2017, short-term plans were limited to three months of coverage. However, the executive order allows these plans to be expanded to up to 12 months of coverage. In addition, short-term plans don’t have to offer the same protections or benefits that the Affordable Care Act mandates. If you purchase one in 2018, you will still have to pay a tax penalty for being uninsured. If you purchase a short-term plan and it expires, the insurance company does not have to renew it, meaning you would lose coverage and not be able to enroll in any other insurance plan until the next Open Enrollment period begins (November 1 of every year).
See below for a handy chart that shows how Affordable Care Act plans differ from short-term plans:
Consumer Protections in ACA Plans Compared to Short-Term Coverage
|
Consumer Protection |
ACA Plans |
Short-Term Coverage |
|
Includes coverage for preexisting conditions? |
Yes |
No – short-term plans can decline to offer coverage at all or exclude coverage for preexisting conditions |
|
Prohibits higher rates based on health status? |
Yes |
No – short-term plans can charge a higher rate based on an individual’s health status |
|
Covers essential health benefits? |
Yes |
No – coverage varies by plan and many exclude benefits such as prescription drugs, maternity, mental health and substance use disorder services |
|
Prohibits dollar caps on health care services? |
Yes |
No – short-term plans can include a dollar cap on services and stop paying medical bills after that cap is reached |
|
Caps out-of-pocket expenses for consumers? |
Yes |
No – short-term plans may not have a maximum limit on consumer out-of-pocket costs |
|
Allows consumers to use federal premium assistance based on their income? |
Yes |
No – premium tax credits cannot be used to purchase short-term plans |
|
Satisfies the individual mandate? |
Yes |
No – consumers enrolled in a short-term plan may have to pay a penalty for failing to have minimum essential coverage |
What are association plans? Association plans generally pool small employers (and occasionally sole-proprietors) with a common professional interest into an association for the purposes of buying more reasonably-priced insurance. Some of you who live in New York may remember TEIGIT, an association plan for members of entertainment unions. Their plans were well-designed and more reasonably priced than what was available on the individual market at the time (prior to the Affordable Care Act). However, this was because New York had robust insurance regulations which included coverage of pre-existing conditions and benefits like hospitalization and drug coverage, etc. The insurance laws of the state governed the association plan, so if those laws were lax, the plan was as well. This executive order allows plans to be exempt from most state regulation and oversight, although it does require associations to accept people with pre-existing conditions. If this proposed rule goes into effect, association plans would be selling an almost-unregulated product with little oversight alongside small group plans, which are regulated and have to provide certain protections and benefits. This creates an unequal playing field which would result in premiums going up for those buying non-association plans, according to the Congressional Budget Office.) In addition, common patient protections, such as laws that provide access to emergency care, access to specialists and review of denied medical claims, would not apply to these plans.
Why should I care? This will affect everyone who has coverage, not just those who enroll in these plans. While the rates may drop for those that belong to association plans or buy short-term policies, premiums will increase for everyone else on the individual market. “According to estimates from the Urban Institute, the proposed rule will result in 2.1 million people shifting from ACA-compliant plans to short-term coverage, resulting in premium increases of 18.2 percent in states that do not prohibit or limit short-term plans.” Indeed, because of this executive order, as well as the repeal of the individual mandate beginning in 2019, a report released by California’s insurance marketplace states that every state could see premium increases. “Cumulatively, states could see increases ranging from 35 to 90 percent from 2019 to 2021”, with states in the South and Midwest facing the highest jumps.
In addition, fewer consumers would have their rights protected. It would create a parallel insurance market that offers fewer consumer protections than the ACA-regulated market, and fraud would likely increase.
What can I do? The public has until April 23, 2018 to submit comments on these proposed rules. To comment on them, visit the Federal Register.
You can also ask your state legislators to: 1. Require short-term plans comply with all Affordable Care Act individual market rules, or 2. Limit the duration of short-term plans to three to six months.
Should these rules be codified and you are tempted to purchase one of these plans, please call the Artists Health Insurance Resource Center first. We can help you understand the plan and determine whether it meets your needs or not.
And remember, if it sounds too good to be true, it probably is.
Yours in good health,
Renata Marinaro
National Director of Health Services at The Actors Fund
Do you work in performing arts and entertainment and have questions about health insurance? The Actors Fund provides assistance nationally. Contact our regional office closest to you to speak to a counselor.
New York City
917.281.5975
Los Angeles
855.491.3357
Don’t forget to use the resources section of our website. It contains tools to help you make decisions about your health insurance, including new online tutorials on how to choose providers and how to read an Explanation of Benefits. In addition, you’ll find an updated Stage Managers National Health Directory, our national online directory of health care providers recommended by industry professionals that can be used by theaters and touring companies. For these resources and more, visit actorsfund.org/HealthServices. You can also find out more about enrollment assistance and upcoming health insurance seminars near you!
Photo © Kimberly M. Wang / eardog.com