Committee on Energy and Commerce, Chairman Frank Pallone, Jr.
Subcommittee on Health, Chairwoman Anna G. Eshoo
Subcommittee on Oversight and Investigations, Chair Diana DeGette
U.S. House of Representatives, Democratic Staff Report, June 2020
Executive Summary (excerpts)
- The Committee’s investigation finds that the Trump Administration’s policy of expanding these dangerous, unregulated plans presents a threat to the health and financial well-being of American families, particularly in light of the current public health emergency.
- The Committee’s investigation finds that STLDI plans systematically discriminate against individuals with pre-existing conditions, and against women.
- These plans offer bare bones coverage, including major coverage limitations that are not always clear in marketing materials, making it difficult for consumers to know what they are buying.
- STLDI plans offer wholly inadequate protection against catastrophic medical costs.
- Some STLDI plans impose draconian coverage limitations even for illnesses, injuries, and conditions arising after a consumer purchases a policy.
- The Committee’s investigation finds that on average, less than half of the premium dollars collected from consumers are spent on medical care.
- STLDI plans engage in heavy-handed back end tactics to avoid paying medical claims that do arise.
- The Committee’s investigation concludes that these plans are simply a bad deal for consumers.
The Committee concludes that STLDI plans present a significant threat to the health and financial well-being of American families. STLDI plans include limited protection for both catastrophic medical costs and routine medical care, and it is unclear what kind of value consumers are getting for their premium dollars, other than a false sense of security. The Committee staff recommend federal legislation subject STLDI plans to the all of the ACA’s interlocking consumer protections, including guaranteed issue and renewability, the ban on pre-existing condition exclusions, coverage of the essential health benefits, the medical loss ratio, and the prohibition on rescissions. Subjecting STLDI plans to all of the ACA’s consumer protections at a federal level will ensure adequate protection for consumers.
In the absence of federal legislation, the Committee recommends that states significantly restrict STLDI plans. Additionally, states should limit STLDI plan duration to 90 days and prohibit renewability, including prohibiting the purchase of multiple STLDI plans in one plan year. Individuals who purchase consecutive policies may not fully understand the policies limitations and exclusions, including the pre-existing conditions exclusions. STLDI plans that are available for the entire plan year are also being marketed as an alternative to comprehensive, major medical insurance and are causing confusion for consumers who may be unaware that they are purchasing plans that do not provide comprehensive coverage.
The Committee staff recommend that states prohibit the sale of STLDI plans during ACA’s open enrollment. The increase in enrollment in STLDI plans by brokers and agents in December and January suggests that these plans are benefiting from and possibly capitalizing on the marketing and advertising around the ACA’s open enrollment season. Additionally, states should require STLDI plans to be sold only in-person. This may help prevent some of the aggressive marketing tactics that brokers are engaging in such as pushing consumers to purchase plans over the phone without reviewing any written information or coverage documents. Lastly, states should subject STLDI plans to the ACA’s consumer protection provisions, including the requirement that they provide coverage for all essential health benefits, and cover pre-existing conditions.
Full report (197 pages):
By Don McCanne, M.D.
The Trump administration’s expansion of the use of short-term health insurance plans (junk insurance) is absolutely criminal. This Congressional report explains why. The Committee staff recommend that the plans be required to comply with the ACA’s consumer protections, and that states significantly restrict these plans.
A far better solution would be to enact and implement single payer Medicare for All since obviously this would preclude the need for short-term plans, not to mention providing affordable, comprehensive coverage for everyone forever.
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