Consumers looking at their health insurance options on the website for the federal marketplace, called healthcare.gov, may be redirected to other enrollment sites, some of which allow consumers to click a tab entitled “short-term plans” and see a list of those plans, often with significantly cheaper premiums. Short-term plans were once barred from the exchanges because they were considered inadequate coverage and do not meet the insurance requirements laid out under the Affordable Care Act. If consumers select a short-term plan, they are directed to call a phone number to finish signing up, according to screenshots provided to The Post.
Critics say that both the sale of short-term plans through private brokers and consumers’ ability to select such plans are the latest examples of Trump administration efforts to weaken the ACA after failing to repeal and replace the law in Congress. The president has repeatedly contended that short-term plans provide “relief” from expensive individual market insurance plans that are unaffordable to many consumers. The rule allowing the sale of such plans was finalized late last year, just weeks before open enrollment, so this is the first year they are widely available.
In addition to these efforts, the administration is also seeking to void the law in court, siding with a group of Republican state attorneys general who argue it is unconstitutional since Congress zeroed out the penalty for not having insurance in its 2017 tax overhaul legislation. A trial court in Texas ruled the entire law invalid late last year, and an opinion is expected at any time from the U.S. Court of Appeals for the 5th Circuit. The law is likely to end up in front of the Supreme Court for a third time, possibly amid the 2020 presidential election.
Under the ACA, all health insurance plans have to cover 10 essential health benefits, including maternity and newborn care, prescription drugs, emergency room services and mental health. Short-term health plans do not have to cover those services, can discriminate against those with preexisting conditions and set caps on how much they are willing to pay, which is prohibited for Obamacare plans.
Brokers often make higher commissions on short-term plans, health policy experts said, which gives them an incentive to sell them. They are supposed to present ACA-compliant plans to consumers, but are allowed to provide other options, including short-term plans. Some brokers make clear that such plans are not as comprehensive as ACA plans, but experiences differ.
“The whole business model is signing people up for coverage and getting a cut of what they sell, and the place they’re going to make their money is selling these short-term plans,” said Nicholas Bagley, a professor of law at the University of Michigan and proponent of the ACA. Consumers “don’t fully understand the lack of protections if they go over some annual or lifetime [insurance] limit. These plans don’t cover preexisting conditions.”
The administration’s use of outside brokers has prompted nearly two dozen Senate Democrats, including Democratic presidential candidates Elizabeth Warren, Kamala D. Harris and Amy Klobuchar, to send a letter to CMS on Wednesday expressing their concern over the promotion of short-term health plans.
“We are concerned that [CMS] is not only failing to conduct sufficient oversight to protect customers, but is actively emailing consumers to encourage them to obtain coverage through third-party agents and brokers instead of the HealthCare.gov website,” the senators wrote in a letter. Democratic New Hampshire Senator Jeanne Shaheen orchestrated the effort.
Such plans were previously available for periods of three months or less and could not be renewed, but the administration late last year finalized a rule that allowed for the plans’ availability for up to 12 months, with the option to renew them for up to three years. A federal judge sided with the administration in a court challenge to their expanded availability and upheld the rule in July. Consumers still cannot use government subsidies to purchase short-term plans, however.
“For most of the people buying on the exchanges, this would be worse than what they’ve been buying, especially because the majority of people who buy on exchanges get help with their premiums,” said Allison Hoffman, a law professor at the University of Pennsylvania Law School.
The Centers for Medicare and Medicaid Services has sent at least five emails so far to individual market consumers encouraging them to use outside brokers, including through a service called Help on Demand, to sign up for health insurance, according to emails obtained by The Post from a recipient of ACA market emails. The agents and brokers must be registered with the federal exchanges, CMS said in a statement, and they help consumers sign up for individual market plans.
“While agents and brokers are required to provide assistance with Exchange, Medicaid and CHIP coverage and are directed to enroll consumers in such coverage options whenever possible, they are not prohibited from sharing information on other coverage options, such as those offered off-Exchange,” a CMS spokeswoman said.
Some critics of the policy say the expanded sale of short-term plans may be one of the factors depressing enrollment in Obamacare plans, which dropped 13 percent in the first three weeks of the sign-up period, compared to the same period last year, according to federal data released Wednesday. During the 2019 open enrollment, 1,924,476 people signed up for individual market plans in the first two weeks of enrollment, compared to 1,669,401 for 2020. Open enrollment ends on Dec. 15.
CMS said it has used Help on Demand for three years, but the agency has increasingly encouraged consumers to seek their advice through emails directing them to the service’s website.
The Trump administration has drastically cut federal funding for “navigators” — grass roots organizations that help people sign up for ACA plans, including those who may not otherwise know they are eligible for coverage. .
Premiums for the most common type of Obamacare plan dropped by 4 percent for 2020, CMS said last month, and the vast majority of consumers on the individual market qualify for government tax subsidies that help cover the cost of their insurance. However, consumers complain about high deductibles and premiums in individual market plans.