Summary: This is a consumer advocate's consideration of the CMS ruling expanding the availability of SHORT TERM LIMITED DURATION Insurance that has given rise to a lawsuit by Obamacare fans. As you know, it's not legal advice, but rather a consideration of the hysterical, "Oh, they're killing Obamacare," nonsense that often works against consumers.
The lawsuit concerns STLDI, short-term limited duration insurance. These are short-term plans that consumers used and had available even after passage of the ACA in 2010 to cover gaps, or that were used by students, etc. They were cheaper than Obamacare plans because they DO NOT COVER AS MUCH and are NOT bound by Obamacare qualified plan rules.
Like all cheaper plans, these plans often appeal to young-healthies, students, those between jobs and others. In 2016, six years after the passage of Obamacare, CMS under Obama, similarly to the rule for STLDI under this Administration, used their authority to CHANGE the definition of and availability of STLDI in order to try to force more young-healthies, specifically, and others to use exchange plans.
Obama's Administration in 2016 stated after CMS changed STLDI provisions:
"Some issuers are now offering short-term limited duration plans to consumers as their primary form of health coverage for periods that last nearly 12 months, allowing them to target ONLY THE HEALTHIEST CONSUMERS while avoiding consumer protections. As highlighted in recent press accounts, BY KEEPING THESE CONSUMERS OUT OF THE ACA single risk pool, such abuses of limited duration coverage increase costs for everyone else, and they could have a greater impact over time if allowed to become more widespread." [caps added for emphasis]
The current changes by CMS to STLDI EXPAND the availability of these short-term limited duration insurance plans, and the government is being sued, because groups are worried about the money they'll get from government and consumers. The groups suing are:
Association For Community Affiliated Health Plans, (an insurance company group focusing on Medicaid), National Alliance on Mental Illness, (education and advocacy on mental illness), Mental Health America, (policy and advocacy), American Psychiatric Association (providers), AIDS United, (policy and advocacy), The National Partnership for Women and Families, (policy) and Little Lobbyists, LLC (advocacy, education, outreach).
WHAT THEY WANT IS: To STOP implementation of STLDI Rule, declare the rule arbitrary and capricious, declare that short term limited duration can NOT be a plan whose term is GREATER THAN 3 MONTHS or longer than ONE YEAR WITH RENEWALS. And they seek to have the rule vacated and set aside.
THE REASON THEY WANT TO SUE IS MONEY: If you look up the complaint, you'll see the list of reasons they're suing, summarized here: Short-term plans which are not required to comply with Obamacare plan requirements will be cheaper than their plans. They argue that the movement of some people from ACA Marketplace plans to short-term insurance plans will INCREASE the cost of Marketplace plans by 5 percent. They argue that the fact that Short-term plans often don't cover costs of mental health or limit the coverage, will reduce that ability of people to pay for such services and therefore, they won't get such services. They argue that because their members aren't included in plans, they will lose business. And in the case of AIDS United, they argue that their members who must buy Obamacare plans because of their pre-existing conditions will be forced to pay more because, as noted above the movement of people into short-term plans will increase costs of ACA plans by five percent.
What's really at stake? Not much, obviously in my opinion. In 2008, The Mental Health Parity and Addiction Equity Act (MHPAEA) required group health plans to provide comparable coverage for mental health and addiction services as was provided for medical and surgical services (That's the PARITY).
In 2010, Obamacare expanded that PARITY coverage to individual plans. This coverage in Obamacare also had to be included as an Essential Health Benefit. Short Term Limited Duration often skimps on coverage, and its mental health coverage is no exception, so people who purchase such plans do NOT get the essential health benefit and mental health and addiction PARITY protection of Obamacare qualified plans. That's why you see so many plaintiffs from the mental health field as those suing in the lawsuit.
BUT, years since Obamacare, even after the individual mandate forcing consumers to purchase the financial product of health insurance or pay an IRS penalty, even after the 2016 CMS amendment trying to force young-healthies into the marketplace by restricting availability of STLDI, it hasn't worked.
In November of 2017 NPR, among the most liberal of reporters published:
Health Insurers Are Still Skimping On Mental Health Coverage," Jenny Gold, stated that "In 2015, behavioral care was four to six times more likely to be provided out-of-network than medical or surgical care." Most of the rest of the article discusses that low reimbursement rates means many professionals don't participate in plans and that plans have narrow networks of providers. Similar anti-Trump and pro-Obamacare media, like The Washington Post, have reported the same, NOT ENOUGH MENTAL HEALTH PROVIDERS ON PLANS, BECAUSE THEY DON'T GET PAID ENOUGH BY PLANS.
Of course, now the media want it both ways. After reporting how it wasn't working, now they're arguing and these folks are suing claiming that it will be worse if we have short-term plans that typically restrict or require people to pay for mental health and addiction services out of pocket. But it's not working, so the dogged commitment to an old law, 2010 Obamacare, is absurd but for the political angling.
[As an aside, arguably, by reducing the "insurance coverage," of these services, used to further hike up costs of health insurance plans because, now they pass those costs onto consumers, perhaps expanding the number of people paying out of pocket will get the prices charged by providers under control. It's a proven that covering something with insurance leads to higher prices charged. Whichever way you see it, we know it's not working and just because they're calling it Obamacare, doesn't make it work.]
Who knows what the DC Circuit Court will decide on this lawsuit. After King v. Burwell which held that people could be forced to take government stipends under the ACA in order to have to buy ACA health insurance just to keep marketplace numbers up, anything's possible. But this is an illogical lawsuit. In response to the complaint, here's how I see it.
First, short-term limited duration insurance is cheaper because it covers less, but has remained a choice for students, healthies, those between jobs as a means of having "something" they can afford so that they don't go without insurance.
Second, in 2016, under Obama, CMS LIMITED the availability of Short-term limited duration insurance in order to force people into marketplace health insurance purchases, specifically the young-healthies, because the young-healthies proved less than enthusiastic about purchasing expensive plans just to keep other people's rates lower, so CMS' current efforts to expand the availability of these short-term limited duration insurance plans is merely providing a consumer option.
Third, short-term plans which are not required to comply with Obamacare plan requirements will be cheaper than their plans. That's true. This is a consumer financial product, choice is important and as long as they're being sold as a cheaper, less coverage alternative and clearly indicate what they do/don't cover, they serve a purpose in the marketplace for affordable health insurance for students, those in between jobs and others who cannot afford health insurance that includes the Obamacare mandates.
They argue that the movement of some people from ACA Marketplace plans to short-term insurance plans will INCREASE the cost of Marketplace plans by 5 percent. Marketplace plans have gone up in cost every year. At their peak, they only covered 11 million Americans, (and that's a generous number), with people not participating for any variety of reasons from the political protection of public employees, to the extensive exemptions listed in healthcare.gov. Further, under these plans with or without health insurance, mental health providers have been too few and providers have rejected participation in plans because they want more money, leading to the fact that enormous numbers of those seeking mental health services are out of network.
Simply forcing people to purchase Obamacare plans by restricting the availability of short term limited duration insurance plans, in order to save Obamacare plan participants money, therefore is attaching a consumer penalty and burden based on a CMS ruling from a prior administration (Obama's CMS restrictions of STLDI in 2016).
They argue that the fact that Short-term plans often don't cover costs of mental health or limit the coverage, will reduce that ability of people to pay for such services and therefore, they won't get such services. A huge number of mental health and addiction services are already being paid for out-of-pocket by patients, ranging in numbers upwards of 63 percent in Washington, DC. We're already unable to pay for our services, with or without health insurance.
They argue that because their members aren't included in plans, they will lose business. This is the Psychiatric Association, which is playing a bit of a mind game, if you will on consumers. Article after article, statistic after statistic confirms that providers ARE NOT PARTICIPATING IN PLANS because they're not getting paid enough. If they get paid more, guess what? The cost of plans goes up, making the necessity of short-term limited duration plans even more essential.
In the case of AIDS United, they argue that their members who must buy Obamacare plans because of their pre-existing conditions will be forced to pay more because, as noted above the movement of people into short-term plans will increase costs of ACA plans by five percent. Though Obama's propaganda about single risk pool got a lot of publicity, the ACA was NEVER a single risk pool since it at the outset singled out tobacco users and people's ages as justifications for higher insurance premiums. Actually, given the fact that no other insurance risk, pre-existing conditions, obesity, substance abuse, alcoholism is ALLOWED to be a reason to charge people more in premiums, the law seemed discriminatory to begin with, since age is a protected class.
Further, Obamacare failed with this idea too, since the single risk pool didn't prevent insurers from complaining that not enough young-healthies were purchasing more expensive health insurance eg, silver plans, but instead chose bronze plans. The government tried to strong-arm young healthies by first in 2015 raising the price of silver plans LESS than they raised the price of bronze plans, so trying to make silver plans look like a better deal, which didn't work and then in 2016 having CMS restricting the availability of short-term limited duration insurance for the stated reason of compelling young-healthies to participate in Obamacare.
As we read through the politically anti-Trump propaganda that is twisting what's at issue with short-term limited duration insurance that is being published by media, just like when we read the pro-Obama propaganda, our lack of understanding will not protect us from the reality of what's being done by lawmakers or from the reality of what agendized groups are really looking for, and unfortunately, less and less it seems to be about consumers.
