California Insurance Commissioner Urges Federal Government to Withdraw Proposed Health Care Rule: A Race to the Bottom Rather Than Providing A Meaningful Alternative
Short-Term, Limited-Duration Insurance will provide skimpy, unreliable coverage
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Today the California Insurance Commissioner Dave Jones sent a letter to the Centers for Medicare and Medicaid Services in opposition to the proposed rule, Short-Term, Limited-Duration Insurance. In part Jones' letter reads:
"The proposed rule, Short-Term, Limited-Duration Insurance, a race to the bottom rather than providing a meaningful alternative. , is yet another attack on the integrity of the nation's health insurance markets. This rule attempts to replace comprehensive coverage compliant with the Affordable Care Act (ACA) with skimpy health insurance that had previously driven some consumers to bankruptcy. Short-term limited-duration insurance is not individual health insurance under federal law and, therefore, does not have to comply with the ACA. These policies typically lack the consumer protections available in the ACA market by utilizing underwriting based upon health status, denying coverage for individuals with pre-existing conditions, or pricing those individuals out of these products. As such, under federal law, an insurer could deny coverage or charge higher premiums based on any factor the insurer deems relevant, including pre-existing conditions, gender, gender identity, or age, unless prohibited by state law. Although touted as being an affordable alternative to ACA-compliant coverage, these policies return us to a race to the bottom rather than providing a meaningful alternative. I strongly oppose the proposed rule, Short-Term, Limited-Duration Insurance (proposed Rule), because it further erodes the protections provided under the ACA, poses significant risk to health insurance markets in California and the nation, and offers consumers skimpy health insurance policies that cannot be relied upon to cover necessary health services when they need them most." |
Editor's Note: Federal Register, Short Term, Limited-Duration Insurance; A Proposed Rule by the Internal Revenue Service, the Employee Benefits Security Administration, and the Health and Human Services Department on 02/21/2018
Secretary of Labor's Order 1-2011, 77 FR 1088 (Jan. 9, 2012).
5.Section 2590.701-2 is amended by revising the definition of “Short-term, limited-duration insurance” to read as follows:
Short-term, limited-duration insurance means health insurance coverage provided pursuant to a contract with an issuer that:
(1) Has an expiration date specified in the contract (taking into account any extensions that may be elected by the policyholder without the issuer's consent) that is less than 12 months after the original effective date of the contract;
(2) With respect to policies having a coverage start date before January 1, 2019, displays prominently in the contract and in any application materials provided in connection with enrollment in such coverage in at least 14 point type the following:
THIS COVERAGE IS NOT REQUIRED TO COMPLY WITH FEDERAL REQUIREMENTS FOR HEALTH INSURANCE, PRINCIPALLY THOSE CONTAINED IN THE AFFORDABLE CARE ACT. BE SURE TO CHECK YOUR POLICY CAREFULLY TO MAKE SURE YOU UNDERSTAND WHAT THE POLICY DOES AND DOESN'T COVER. IF THIS COVERAGE EXPIRES OR YOU LOSE ELIGIBILITY FOR THIS COVERAGE, YOU MIGHT HAVE TO WAIT UNTIL AN OPEN ENROLLMENT PERIOD TO GET OTHER HEALTH INSURANCE COVERAGE. ALSO, THIS COVERAGE IS NOT “MINIMUM ESSENTIAL COVERAGE”. IF YOU DON'T HAVE MINIMUM ESSENTIAL COVERAGE FOR ANY MONTH IN 2018, YOU MAY HAVE TO MAKE A PAYMENT WHEN YOU FILE YOUR TAX RETURN UNLESS YOU QUALIFY FOR AN EXEMPTION FROM THE REQUIREMENT THAT YOU HAVE HEALTH COVERAGE FOR THAT MONTH.;and
(3) With respect to policies having a coverage start date on or after January 1, 2019, displays prominently in the contract and in any application materials provided in connection with enrollment in such coverage in at least 14 point type the following:
THIS COVERAGE IS NOT REQUIRED TO COMPLY WITH FEDERAL REQUIREMENTS FOR HEALTH INSURANCE, PRINCIPALLY THOSE CONTAINED IN THE AFFORDABLE CARE ACT. BE SURE TO CHECK YOUR POLICY CAREFULLY TO MAKE SURE YOU UNDERSTAND WHAT THE POLICY DOES AND DOESN'T COVER. IF THIS COVERAGE EXPIRES OR YOU LOSE ELIGIBILITY FOR THIS COVERAGE, YOU MIGHT HAVE TO WAIT UNTIL AN OPEN ENROLLMENT PERIOD TO GET OTHER HEALTH INSURANCE COVERAGE.
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