The federal government plans to place limits on short-term health plans that have become increasingly popular in the era of the Affordable Care Act, the health care reform law also known as Obamacare.
Currently, these plans offer coverage for nearly a year, but lack many of the provisions of more comprehensive health coverage required of plans sold under the law. For example, they may not cover:
- Maternity care
- Mental health care
- Prescription drugs
- Pre-existing medical conditions
Sellers of short-term plans also can cap the maximum amount they will pay out in coverage, a practice forbidden in Obamacare-compliant plans.
The government is cracking down on short-term health insurance plans in hopes of boosting policies sold on the insurance marketplaces created under Obamacare. According to a CNBC report, short-term plans continue to grow in popularity and are “siphoning off healthier customers from coverage sold both on government marketplaces and outside those exchanges.”
As part of the government’s proposed changes, consumers would be limited to purchasing short-term plans that offer coverage for just three months. Unlike at present, consumers would not be allowed to renew these policies.
The move is intended to drive more people away from short-term health plans and into Obamacare-compliant plans sold on the federal (healthcare.gov) and state health insurance marketplaces, or sold directly through insurers.
According to a Kaiser Health News report:
The government said these changes were necessary both to ensure that consumers have “meaningful health coverage” and that the short-term plans would not siphon away healthy people from other insurance plans that comply with the ACA. An exodus of healthy people could lead to increasing premiums for the remaining people in plans sold on healthcare.gov and on state marketplaces.
For more on health insurance coverage, read, “Top 5 Reasons You Could Pay More for Health Insurance Coverage in 2017.”
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