New Report Identifies Hazards of Short-Term Health Plans

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On February 25, 2020, the Leukemia & Lymphoma Society released a report that underscores how short-term health plans offer coverage that is inadequate for many consumers. The report, based on a study conducted by Milliman, Inc., analyzes the costs faced by patients who are enrolled in short-term plans and who need treatment for any of the following conditions: lymphoma, heart attack, lung cancer, diabetes, and mental health.

The main findings of the report pertain to the out-of-pocket costs that short-term plan enrollees could incur following a serious diagnosis compared to enrollees in ACA-compliant plans. For example, a patient newly diagnosed with lymphoma while covered in a short-term plan could be responsible for $23,100 to $45,800 in out-of-pocket expenses in the first six months following diagnosis, compared to $6,300 that a patient covered in an ACA-compliant plan would expect to pay over the same period. This demonstrates how short-term plans offer inadequate coverage compared to ACA-compliant plans and how they can leave consumers stranded following a serious diagnosis.

Additional findings include:

  • Only 33 percent of short-term plans studied in the report offer prescription drug coverage;
  • Only 42 percent of short-term plans studied in the report offer mental health coverage;
  • More than 1-in-4 short-term plans studied in the report have a deductible over $7,900, which is the maximum deductible allowed for ACA-complaint plans;
  • States that have allowed the expansion of short-term plans have experienced a 4.3 percent increase in health insurance premiums in 2020; and
  • States that restricted the availability of short-term plans have experienced a 1.2 percent reduction in health insurance premiums for ACA-compliant plans.

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