The term “junk insurance plans” refers to health insurance policies known as Association Health Plans (AHPs) and short-term plans.
AHPs allow small businesses, including self-employed individuals, to form an association to purchase health insurance coverage as if they were a single large employer. Given that the rules that govern large group plans contain fewer patient protections than the rules for small-group and individuals plans, AHPs may cover fewer treatments and services than consumers anticipate.
Short-term health plans provide health insurance coverage that is designed to fill temporary gaps in coverage. Pursuant to federal regulations, short-term plans have a maximum duration of up to 12 months and may be renewed for up to 36 months. Short-term plans are exempt from the definition of individual health insurance coverage under the Affordable Care Act. Consequently, they may discriminate against people with pre-existing conditions and are not required to provide coverage for benefits such as maternity services, prescription medications, and mental health services, among others.