WASHINGTON–The Association for Community Affiliated Plans (ACAP), National Alliance on Mental Illness (NAMI), Mental Health America, American Psychiatric Association (APA), AIDS United, National Partnership for Women & Families, and Little Lobbyists today filed suit in the U.S. District Court for the District of Columbia to invalidate the short-term, limited-duration insurance (STLDI) plan rule issued last month by three federal agencies. This rule will harm patients and their families as well as others in the health care system by undermining access to quality, affordable coverage, will significantly disrupt insurance markets in states across the country, and threatens to bring back abusive practices that harm consumers specifically prohibited by the Affordable Care Act (ACA).
The groups argue in their complaint that the final rule violates the plain-English meaning of “short-term” by defining it as 364 days instead of three months, as currently allowed, and “limited duration” as up to 36 instead of 12 months. The plaintiffs also argue that the rule arbitrarily reverses previous limits on these plans to create an “alternative” to ACA-compliant plans that Congress did not authorize and that violates the ACA by effectively undercutting ACA plans and making them increasingly unaffordable and unsustainable for consumers who have nowhere else to turn. As such, the plaintiffs believe that the courts will agree that the rule is unlawful.
The rule expands the availability of discriminatory, inadequate short-term “junk” plans, which can: set higher premiums based on age, gender, and health status, deny access to basic benefits, undermine catastrophic protections, deny coverage for any pre-existing condition, and increase uncompensated care for health care providers. Expansion of short-term plans also threatens people’s access to quality coverage. Middle-income families with comprehensive coverage will see their premiums increase while limited, medically underwritten plans lure healthy people out of the quality plans that include consumer safeguards. Such plans are not subject to mental health parity nor the non-discrimination rules that protect people with conditions like HIV/AIDS. Additionally, rushing sale of short-term plans will undercut health plans that play by the rules and will confuse consumers when they are signing up for 2019 coverage starting on November 1.
Examples of the real-world consequences of these “junk” plans cited in the complaint include:
- A woman in Illinois went to the hospital with heavy vaginal bleeding resulting in a five-day hospital stay and a hysterectomy, only to be denied coverage under her short-term plan on the ground that her menstrual cycle constituted a pre-existing condition.
- A man in Washington, D.C., purchased a short-term plan with a stated maximum payout of $750,000; when he sought coverage for a $211,000 bill resulting from a hospitalization, however, he was paid only $11,780, in part due to a denial of coverage based on his father’s medical history.
“Short-term, limited-duration health plans are like the small spare tire in a car: they get the job done for short periods of time, but they have severe limitations and lead to trouble if you drive them too fast or too long,” said Margaret A. Murray, CEO of the Association for Community Affiliated Plans. “Consumers who substitute comprehensive coverage with a STLDI plan will be rudely reintroduced to denials of care on the basis of pre-existing conditions, coverage limits and fine print should they need care in a meaningful way.”
Mary Giliberti, CEO of National Alliance on Mental Illness, said: “For the past 20 years, NAMI has fought for parity—the fundamental tenet that mental health care is just as important as physical health care. This rule change rolls back the clock on Congress’ bipartisan efforts to ensure patient protections and fair insurance coverage of mental illness—and will start a downward spiral that leaves people with mental health conditions right back to where we were, excluded from lifesaving healthcare.”
“At a time when suicide and overdose deaths have hit epidemic levels and continue to rise, the last thing we need is a rule that confuses consumers and offers worse mental health and substance use benefits. The STLDI rule not only violates the intent of Congress in the ACA, it also rips away needed treatment and threatens the lives of countless Americans,” said Paul Gionfriddo, President and CEO of Mental Health America.
“The Administration’s rule harms our patients by allowing plans that deny coverage for pre-existing conditions or that discriminate against those with mental illness and substance use disorder,” said Altha Stewart, M.D., President of the American Psychiatric Association. “This rule jeopardizes the insurance coverage of many Americans with complex medical needs that require strong, predictable insurance protection and care. Without this coverage, patients with complex medical needs will suffer and often end up in emergency rooms, raising health care costs. Our lawsuit is necessary to protect our patients. We call upon the Administration to drop this rule and enforce the protections of the Affordable Care Act.”
“The plans and protections of the ACA have been life savers for people living with HIV. Discrimination based on pre-existing conditions including HIV was prolific before the ACA. These plans are a giant step backwards and will effectively sanction discrimination by the insurance industry and will deny access to thousands including people living with HIV. Access to essential medications for HIV treatment not only preserve individuals’ health, but achieving viral suppression through medications can also prevent new HIV infections. These short term plans are not only a threat to people with HIV, but to our the nation’s public health by making it harder to end the HIV epidemic in America,” said Jesse Milan, Jr., JD, President & CEO, AIDS United.
Debra Ness, President, National Partnership for Women & Families, said: “Women and families depend on quality, comprehensive health insurance. Yet the Trump administration is putting that at risk by pushing skimpy, junk plans that don’t offer the coverage we need and deserve. The National Partnership is proud to join allies in filing suit against these dangerous and discriminatory policies that undermine women’s health and economic security. We refuse to go back to a time when families were victim to predatory practices and one illness away from financial ruin.”
“Children with complex medical needs require access to affordable health insurance that covers essential health benefits, pre-existing conditions, and does not impose monetary caps on care. The ACA assures these families that any plan they buy will have these protections. The STLDI rule destroys that assurance. Those who buy these STLDI plans will have necessary care for their children go uncovered and face financial ruin. Those fortunate enough to have ACA-compliant plans will face skyrocketing premiums because of the effects of the STLDI plans on the market. Our children deserve better,” said Elena Hung, President of Little Lobbyists.
The plaintiffs represent a broad array of insurers, health care providers, and consumer groups that advocate for patients, particularly those with pre-existing conditions and serious illnesses. A deluge of overwhelmingly negative comments from across the health care sector has warned that short-term plans will leave many enrollees uncovered when they need health care, increase premiums for those who buy quality plans, increase costs to taxpayers, and reduce choices. One analysis found that 98 percent or 335 of 340 health care group comments either raised problems with the rule or expressed outright opposition to it.
The Trump administration’s final rule was issued without Congressional approval or public support: a recent survey found that 90 percent of people say it is important that the ACA’s pre-existing protections remain law. This final rule unilaterally undermines federal health insurance protections for people with private insurance, especially the 133 million Americans with pre-existing conditions.