“The current administration says such plans offer consumers more affordable options—and more choice,” Murray explains. “But the marketing for these plans is really disingenuous. It’s not just that they are just short-term. They don’t cover what people think they will cover. They are very profitable for insurance companies. But they can be very costly for consumers, who likely won’t realize they don’t have comprehensive coverage until they are sick or injured.”
Over the past few months, several high-profile publications like Consumer Reports and the Washington Post have printed stories about the dangers, and unexpected costs, of STLDI for consumers.
“It’s like you are in the market for a car and someone offers you a really affordable roller-skate,” says Pollitz. “But a roller-skate is not the same thing as a car. It’s not going to get you as far if you really need to travel. And it’s going to cost you more in the long run.”
Murray also cautions more widespread adoption of such plans can affect the entire insurance market, siphoning cost-conscious consumers from risk pools and driving up premium costs for everyone.
“There are always some young invincibles, who think they won’t get sick—and there are some invincibles, too—and they will be attracted by the lower premiums,” she says. “But in doing so, that will leave people who are sicker to pay higher rates by moving people out of the ACA marketplace.”
That’s one reason why ACAP, as well as six other health organizations, filed a lawsuit in the U.S. District Court for the District of Columbia on September 14, 2018 in order to roll back the new STLDI rule and stop the expansion of such plans. Murray said the HHS rule violates the ACA, “undercutting plans that comply” with the still active legislation. They argue the Trump Administration is using these new rules to try to overturn the ACA—which they have not yet been able to successfully repeal in Congress.
“We thought this was important enough that it was worth suing the federal government in order to try and stop it,” she says. “We had hoped to get a summary judgment last year because we wanted to stop the spread of STLDI plans for the 2020 open enrollment. Unfortunately, we didn’t get that. The judge ruled against us. But we are appealing it—and the hope is that we will have a decision to stop these things being sold in 2021.
The take-home message
Donaldson says it is vital the healthcare community educate consumers about the risks of STLDI plans and make sure they are better aware of what sort of comprehensive plans are available on the Healthcare.gov marketplace.
“While alternative plans such as association health plans and STLDI may present more affordable premiums, they are not a replacement for comprehensive coverage and may not cover the treatments or prescriptions an individual may need throughout the year,” she says.
“We understand that life happens and there may be all manner of reasons why you are separated from coverage,” she says. “But it is becoming harder and harder to distinguish these plans from real coverage especially now that they are now being aggressively marketed to people all over the country. And it’s vital that people understand that 90% of consumers will play less than the listed price on Healthcare.gov marketplace because they qualify for subsidies. It really does pay to take the time to look before you sign up for one of these short-term plans.”
Kayt Sukel is a science and health writer based outside Houston.