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Money saver or bad deal? Debate over short-term insurance policies heads to Senate

Jim Spencer, Star Tribune (Minneapolis) on

Published in Home and Consumer News

WASHINGTON -- Short-term health insurance policies do not have to cover pre-existing conditions. They don't have to pay for prescription drugs. They don't have to offer maternity benefits, mental health benefits or any other minimal coverages. Nothing limits the deductible amount policyholders must pay before their insurance companies cut checks for care.

Even then, their insurance companies can spend as much of policyholders' premiums as they want on administrative costs instead of patient care.

These are among the reasons the U.S. Senate is expected to vote this week on whether to overturn a 2018 Trump administration rule that let states extend short-term, stopgap health insurance into a yearslong alternative to traditional coverage.

Minnesota-based UnitedHealthcare won't say how many short-term health insurance policies it has sold. It doesn't have to. Regulation of the policies, which make solid profits for United and dozens of other health insurance companies, is spare.

The White House says extending the length of these policies from 90 days to up to three years offers an affordable alternative for Americans who do not qualify for premium subsidies under the Affordable Care Act and cannot afford the premiums that come with the ACA's mandatory coverages. The Trump rule allows ACA subsidies to be used to promote sales of short-term policies.

Those who want to curb the expansion say it will undermine the nation's individual insurance market and health care reform by drawing away millions of the healthiest participants from the coverage pool.


Critics of short-term policy expansion include dozens of patient advocacy groups. The country's largest health insurance trade group, America's Health Insurance Plans (AHIP), says a need exists for affordable coverage choices. But AHIP remains "concerned that consumers who rely on short-term plans for an extended time period will face high medical bills when they need care that isn't covered or exceed their coverage limits."

Even in Minnesota, which limits the length of short-term health insurance to about six months with a single renewal within two years, Commerce Commissioner Steve Kelley warned that "to market these plans as a viable long-term solution ... is deceptive and dangerous."

Minnesota Sens. Amy Klobuchar and Tina Smith, both Democrats, have helped lead the opposition to short-term policy extensions.

Short-term policies are "really a license to discriminate," Smith said. "We don't need to go back to the bad old days when insurance is only for you if you don't need it."


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