Short-Term, Limited-Duration Health Plans

Rare disease patients need affordable, comprehensive health insurance benefits to treat their conditions and keep them healthy. Short-term, limited-duration health plans are not required to meet the quality standards outlined in the ACA and, in many cases, are able to discriminate against patients with pre-existing conditions or not provide coverage for essential health care needs. Additionally, many short-term, limited-duration plans have been found to use deceptive marketing practices, causing some individuals to enroll in these plans believing they will receive the same benefits as a comprehensive plan.² It is only after an unexpected health issue, such as a rare disease diagnosis, that those individuals discover they do not have adequate health care coverage.

Additionally, the presence of short-term, limited-duration health plans in the marketplace can increase costs for rare disease patients. In order for health care costs for people with complex health conditions to remain affordable and sustainable, there must be significantly more individuals without complex health conditions participating in the same health care system. Since healthier individuals are more likely to choose plans that offer cheaper but less comprehensive coverage, the proliferation of short-term, limited-duration health plans results in people with fewer routine health care needs segmenting themselves into a separate risk pool. This leaves those with more complex health conditions bearing the brunt of higher health insurance costs.

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1. Federal Register: Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2019, 83 Fed. Reg. 16930 (2018, April 17). https://www.federalregister.gov/documents/2018/04/17/2018-07355/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2019
2. Corlette, S., Lucia, K., Palanker, D., & Hoppe, O. (2019, Jan. 31). The Marketing of Short-Term Health Plans. RWJF. https://www.rwjf.org/en/library/research/2019/01/the-marketing-of-short-term-health-plans.html

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Grading Methodology

NORD’s State Report Card includes information on what actions, if any, states have taken to mitigate the expansion of short-term, limited-duration health plans. States were graded separately on the following three categories, and an overall grade for short-term, limited duration health plans was determined by taking the average of these three separate grades:

1. Limits on the initial contract duration of short-term, limited-duration health plans;
2. Prohibition on renewability of short-term, limited-duration health plans; and
3. Limitations on the duration of renewability periods for short-term, limited-duration health plans.

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