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Protecting Patients in State-Regulated Insurance

NORD supports the Affordable Care Act (ACA) and its requirements that health insurers offer comprehensive plans with strong patient protections and opposes efforts to expand access to short-term, limited duration health plans.

The ACA established a range of critical protections for individuals with pre-existing conditions, including prohibiting insurers from denying patients coverage because of a pre-existing condition, charging patients more because of their health status, and excluding certain benefits in order to discourage individuals with health complications from enrolling in their plans. The ACA also drastically changed the health care system in an attempt to secure affordable health insurance for all Americans and establish a minimum standard of quality for all plans.

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Destabilization of the ACA & Insurance Marketplaces

Despite the obvious achievements of the ACA, unfortunately, in recent years Congress and the Trump Administration took various actions to destabilize the ACA and, by extension, insurance marketplaces across the country. In April 2018, the Administration announced various changes to the marketplaces within its Notice of Benefit and Payment Parameters for 2019 final rule that allows states to weaken their essential health benefits and network adequacy requirements.¹ In December 2017, Congress lowered the penalty for violating the ACA individual mandate to zero as part of the Tax Cuts and Jobs Act of 2017, in effect repealing the individual mandate.² In August 2018, the Administration released its Short-Term, Limited-Duration Insurance final rule, which allows for the expanded use of short-term, limited-duration health plans and association health plans, both of which include fewer comprehensive requirements for coverage and benefits.³ Finally, the Administration declined to defend the constitutionality of the ACA in a lawsuit brought by some state attorneys general that, if successful, could mean the end of the ACA and the protections it affords all those with pre-existing conditions.

Short-Term, Limited-Duration Health Plans

In order for the health costs of those with complex health conditions to remain affordable and sustainable, there must be significantly more people without complex health conditions participating in the same system. Since healthier individuals are more likely to choose to participate in plans that offer cheaper but less comprehensive coverage, the proliferation of short-term, limited-duration health plans, further enabled by the Trump Administration, results in healthier individuals with fewer routine health care needs segmenting themselves into a separate risk pool. This leaves those with more significant health concerns bearing the brunt of higher health insurance costs. Additionally, individuals may enroll in a short-term, limited-duration health plan with the impression that the short-term plan will cover the same benefits as a comprehensive plan, then later discover that their coverage does not include many of the essential benefits they need covered. These issues are particularly concerning for the rare disease patient community, who need affordable and comprehensive health insurance benefits to treat their conditions and keep them healthy.

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; more information on each state can be found in the appendices.

  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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