by Birthright: A War Story | Updated on 9.25.18
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Short-term plans are riddled with limitations and exclusions, many of which are prime examples of the kind of egregious gender discrimination that was rampant in the individual health insurance market before the passage of the Affordable Care Act.
The Trump administration is bringing discrimination back to health insurance. On February 21, the administration issued a proposed regulation to expand access to short-term health insurance—a type of insurance some are calling “junk insurance” because it contains numerous exclusions and limitations, such as for reproductive health services, many of which discriminate against women and transgender people.
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Short-term health plans are limited benefit plans designed for brief gaps in coverage, such as when there is a waiting period before insurance coverage starts at a new job. These plans do not provide what most people in the United States know as comprehensive health insurance. They are riddled with limitations and exclusions, many of which are prime examples of the most egregious gender discrimination that was rampant in the individual health insurance market before the passage of the Affordable Care Act (ACA). While the ACA ended these practices in the individual health insurance market, the consumer protections of the ACA do not apply to short-term plans. These include the requirements to cover essential health benefits, preventive services without cost-sharing, and preexisting conditions, as well as the requirement to offer plans regardless of health status.
Under current regulations, short-term plans are limited to less than three months in duration and cannot be extended. But the proposed regulation would allow short-term plans to be offered for up to 12 months. In addition, in its request for public comments, the administration asked for input on making such plans available for longer than a year. In essence, the administration is trying to make short-term plans a long-term coverage option instead of comprehensive health insurance.
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Short-term plans are anything but comprehensive, and people who enroll in them face significant gaps in coverage. Among them are exclusions for reproductive health services. The ACA requires all individual market health insurance plans to cover maternity care because, in the past, insurers routinely excluded maternity care or charged additional premiums for riders to cover it. Short-term plans, however, routinely exclude coverage for most maternity care. This means the plans do not cover routine prenatal care, childbirth, or postnatal care. They will cover some maternity-related care in case of complications, such as preeclampsia or gestational diabetes, although it is up to the insurer to define what constitutes a “complication” of pregnancy.
There is another big caveat. Short-term plans exclude coverage for preexisting conditions, including a pregnancy. Even if you did not know you were pregnant or became pregnant after enrolling but before the plan started, the plan will deny coverage for any complication of a pregnancy that existed when the plan contract starts. And if the complication is related to a preexisting condition, such as high blood pressure or a prior cesarean section, the plan will likely be exclude it as a preexisting condition.
The ACA also requires all new health insurance plans to provide birth control and sterilization services without a co-pay as part of a package of preventive services. But short-term plans are not required to cover preventive services, let alone without co-pays. In fact, short-term plans generally exclude all birth control and sterilization services. Short-term plans also exclude coverage for abortion services. And, unsurprisingly, short-term plans do not provide coverage for other preventive services related to pregnancy and childbirth, including breastfeeding support and supplies. Basically, short-term plans leave patients short when it comes to services related to preventing pregnancy or being pregnant.
Some short-term insurers also charge women more for coverage, a practice known as gender rating that is now prohibited in the individual market. Gender rating is not consistent across the short-term market, as some insurers charge men more in certain age brackets. Other exclusions, including the preexisting condition exclusions, leave women without needed coverage. Sixty-seven million non-elderly women and girls have preexisting conditions that would be excluded by short-term plans. Numerous media reports have stories of people who had their short-term plans rescinded after filing an expensive claim or had claims for cancer treatments denied as a preexisting condition even when the enrollee did not know she had cancer. Some plans also specifically exclude services that disproportionately affect women, such as chronic fatigue, chronic pain, and arthritis.
Short-term plans also discriminate based on gender identity by excluding coverage for transition-related services, such as surgery. One short-term insurer does not just exclude gender-affirming services, but classifies the exclusion as “sex transformation” along with exclusions for “treatment of sexual function, dysfunction or inadequacy; or treatment to enhance sexual performance or desire.” Not only does this exclusion deny people medically necessary health services, but it also suggests that gender-affirming treatment is simply about sexual activity.
Enrollment in the short-term market is currently small. But recent research finds it could increase to over 4 million people if the proposed regulation is finalized. As healthier people move to these plans, rates for comprehensive insurance will increase. This will leave women who seek out real insurance that will cover pregnancy, birth control, or chronic health needs paying more for coverage. As a result, even women who do not choose a short-term plan will be harmed by the expansion of these plans.
Millions of people pay full price for insurance on the individual market or go without insurance because they are not eligible for premium subsidies. They may be ineligible because they earn too much (over 400 percent of poverty), earn too little in a state that has not expanded Medicaid, or have access to another coverage option that they cannot afford—such as an employer plan. For those not eligible for a premium subsidy, short-term plans are less expensive than options available through the health insurance exchanges.
But you get what you pay for. While being pitched as providing more freedom and lower cost options, the reality is that short-term plans cost less because they cover less.
Written by Birthright: A War Story
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