Limiting Short Term Health Insurance Prevents People from Getting Health Insurance

Congress exempts STLDI [short term limited duration insurance] plans from all federal health insurance regulations. As a result, premiums are often 90 percent lower than ObamaCare premiums and ObamaCare’s preexisting‐​conditions provisions aren’t constantly making coverage worse for the sick in STLDI plans.

In 2016, the Obama administration arbitrarily limited the duration of STLDI plans to 3 months. In 2018, the Trump administration issued a final rule that allows initial STLDI contracts to last up to 12 months; allows enrollees to renew that initial plan for up to 36 months; and allows consumers to stitch together as many 36‐​month plans as they like using “renewal guarantees” that protect them from underwriting after enrollment.

This is from the always insightful health economist Michael Cannon today. His post, “GAO Report Neglects to Mention the Cruelty of Limiting Short-Term Plans,” Cato at Liberty, June 2, 2022.

Another excerpt:

Balvin soon required emergency surgery for diverticulitis. (Her STLDI plan paid promptly and fully for her hospital care.) At the time, federal rules required her insurer to cancel rather than renew her STLDI plan after three months. Those rules subjected Balvin to underwriting when she went to purchase a subsequent three‐​month plan, which meant that plan would not and could not cover her second hospitalization for a related condition. Those federal rules left Balvin to face $97,000 in hospital charges with no insurance. The NAIC foretold this consequence of limiting STLDI‐​plan durations and renewals. Those who seek to limit STLDI are literally trying to deny consumer protections and coverage to the sick.

The whole thing is well worth reading.