WASHINGTON DC – Today, Representative Cindy Axne (IA-03) led 41 of his colleagues in a letter asking the US Department of Health and Human Services (HHS) take immediate action to curb expansion of the court– Limited Time Insurance Plans (STLDI), commonly referred to as “junk plans”, which are offered to Americans.

STLDI plans attract consumers with premiums than comprehensive health coverage, but they are not required to meet essential consumer protections under the Affordable Care Act (ACA). These junk plans can charge different premiums based on age and health status, deny coverage for pre-existing conditions, limit benefits, and more.

“I am incredibly proud of the work that Congress and the Biden administration have done to strengthen the ACA and make health insurance more affordable for millions of Americans, and it is imperative that we continue this good work by protecting the consumers against undesirable plans”, said Representative Axne. “These plans are a raw deal and carry significant financial risk for consumers, and it’s high time we changed them.”

Junk diets were never intended to be comprehensive long-term coverage and often leave Americans like 31-year-old Sam Bloechl with hundreds of thousands of dollars in medical debt. Bloechl bought a bundle of junk plans, was diagnosed with non-Hodgkin’s lymphoma, and then was denied health insurance coverage. He ended up with over $800,000 in medical bills.

The Obama administration has limited the duration of STLDI plans to less than three months. However, in 2018 the Trump administration issued a final rule that allowed individuals to purchase STLDI plans for up to one year, with up to three years of renewable coverage.

“The junk plans pose clear risks to consumers, undermine the strength of the ACA, and are inconsistent with the goal of making affordable, high-quality health insurance available to all Americans,” wrote the members. “We urge HHS to take delayed action to reinstate the 90-day limit on STLDI plans, reduce the ability to renew STLDI plans, and redouble efforts to prevent consumers from being directed to STLDI when they are looking for traditional health insurance plans. ”

The Biden administration has twice issued executive orders to strengthen the ACA, including revising rules inconsistent with this goal, but to date, the 2018 STLDI rule remains in effect.

“Short-term insurance plans do not provide meaningful coverage and continuing to allow extended use of these plans is not beneficial to patients,” said Mary Dwight, senior vice president and director of policy and advocacy at the Cystic Fibrosis Foundation. “We urge the administration to reverse the rule to its original intent – ​​for these plans to be used in the short term while the individual market provides full coverage to both healthy people and those with chronic conditions, such as cystic fibrosis, need to manage their care.

“Short-term plans leave patients and consumers vulnerable to physical and financial harm by relying on practices such as pre-existing condition exclusions and retroactive coverage denials that were commonplace before the ACA was passed. “, said Dr. Gwen Nichols, CMO of the Leukemia & Lymphoma Society of Canada. “It is critical that the administration take immediate action to protect patients from these harmful products, and we commend Representative Axne for her leadership in this important letter.”

Read the full letter HERE:

Dear Secretary Becerra:

We are writing to call on the Department of Health and Human Services (HHS) and the Biden administration to take action to protect Americans from short-term, limited-duration insurance (STLDI) plans that do not not offer comprehensive health care coverage, commonly referred to as “junk plans”. Specifically, we urge you to rescind the final rule issued by the previous administration that expanded STLDI and restore STLDI to its short-term, temporary hedging purpose.

On January 28, 2021, President Biden signed Executive Order 14009 aimed at rolling back efforts to undermine the Affordable Care Act (ACA) and make high-quality health care accessible and affordable for every American. Congress and the Biden administration have since made substantial progress toward that goal. The American Rescue Plan Act (ARPA) increased the generosity of ACA premium tax credits and made millions more consumers immediately eligible for these credits. Under the provisions of ARPA, an individual will pay no more than 8.5% of their income in premiums for a referral plan, including approximately 3.5 million Americans whose income exceeds 400% of federal poverty level and who were previously not eligible for premium subsidies. Eligible consumers with incomes below 150% of the federal poverty level, or about 5.1 million Americans, can select a premium-free referral plan. When combined with a special extended 2021 enrollment period and an active 2022 open enrollment period promotion, Americans had more time to find a plan with lower premiums through the Marketplace.

These efforts have helped millions of Americans find more affordable health insurance. According to recent enrollment data, 14.5 million Americans have chosen health insurance coverage through Marketplace for 2022, including nearly 6 million new consumers. Those who signed up saved, on average, $800 per person in premiums over the past year. We’re proud to have helped deliver real savings for working families looking to budget for health insurance, childcare, and other household essentials as part of the US bailout.

However, the expansion of STLDI undertaken by the previous administration threatens to undermine these strenuous efforts. Under a final rule released in August 2018, the STLDI plan term limit was extended from 90 days to 364 days, including an option to renew coverage for up to 3 years. Basically, STLDI plans do not have to comply with the consumer protections included in the ACA: they can choose not to cover the ten essential health benefits, include medical underwriting, deny coverage for pre-existing conditions, charge higher cost sharing amounts and impose lifetime limits. An analysis of STLDI plans found that 43% of plans surveyed did not cover mental health services, 71% of plans did not cover outpatient prescription drugs, and no plans covered maternity care.

Although STLDI plans serve a purpose for those who need temporary coverage, such as workers transitioning between jobs who do not choose COBRA, they are not comprehensive health care coverage, and these are our voters who suffer from the lack of proper safeguards on STLDI plans. People looking for temporary health insurance are often lured by the cheaper premiums these plans offer, only to end up with inadequate coverage when they need care. The financial consequences for consumers can be significant. In a case reported by NPR, Sam Bloechl, a 31-year-old man diagnosed with stage 4 non-Hodgkin’s lymphoma, found himself with bills totaling more than $800,000 after his short-term health insurance plan ran out. refused his care, citing a previous visit to a chiropractor as evidence of a pre-existing condition.

Junk plans pose obvious risks to consumers, undermine the strength of the ACA, and are inconsistent with the goal of making affordable, high-quality health insurance available to all Americans. We urge HHS to take overdue action to reinstate the 90-day limit on STLDI plans, reduce the ability to renew STLDI plans, and redouble efforts to prevent consumers from being directed to STLDI when searching traditional health insurance plans.

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