Court Upholds Senate Republican-Backed “Junk” Insurance Plans That Can Deny Coverage for Pre-Existing Conditions

Republicans Plow Forward With Toxic Health Care Agenda Amid A Global Pandemic

A federal court recently backed the expansion of short-term junk health insurance plans supported by Senate Republicans, allowing them to plow forward with their toxic health care agenda even in the middle of a global public health crisis. After enabling the dangerous GOP lawsuit to strike down the entire Affordable Care Act, which would eliminate protections for people with pre-existing conditions and kick an estimated 20 million Americans off their health insurance, Senate Republicans still have “no plan” to help the millions of Americans who would lose coverage if their lawsuit succeeds. The federal court’s decision will allow Republicans to continue promoting “an inferior and hazardous substitute,” putting vulnerable Americans “at increased risk amidst a global health emergency.”

These GOP-backed junk insurance plans would “force many to pay for lifesaving treatments,” “often exclude coverage for pre-existing conditions,” and “charge women more for the same coverage.” Vulnerable incumbent Senators Martha McSally, Cory Gardner, Steve Daines, David Perdue, Joni Ernst, Mitch McConnell, Thom Tillis, Lindsey Graham, and John Cornyn have all voted to defend these junk plans, which are “so skimpy that they offer no meaningful coverage” and can leave patients saddled with “catastrophic costs.”

These junk plans aren’t required to cover treatment for COVID-19, but that hasn’t stopped the White House from promoting them as an option for people who have lost their health insurance as a result of the pandemic. Senate Republicans have also refused to hold the Trump administration accountable for its harmful decision to keep special enrollment in the Affordable Care Act’s health exchange closed.

IN CASE YOU MISSED IT

AP: Court backs Trump expansion of cheap health insurance plans
By Mark Sherman

Key Points:

• A divided federal appeals court on Friday upheld the Trump administration’s expansion of cheaper short-term health insurance plans, derided by critics as “junk insurance,” as an alternative to the Affordable Care Act’s costlier comprehensive insurance.

• The U.S. Court of Appeals for the District of Columbia Circuit said in a 2-1 decision that the administration had the legal authority to increase the duration of the health plans from three to 12 months, with the option of renewing them for 36 months. The plans do not have to cover people with preexisting conditions or provide basic benefits like prescription drugs.

• House Speaker Nancy Pelosi said the decision would allow the administration to “keep railroading vulnerable families into shoddy junk health insurance plans.”

• In dissent, Judge Judith Rogers wrote that insurers offering the short-term plans “can cut costs by denying basic benefits, price discriminating based on age and health status, and refusing coverage to older individuals and those with preexisting conditions.” The plans “leave enrollees without benefits that Congress deemed essential and disproportionately draw young, healthy individuals,” making ACA plans more expensive, wrote Rogers, an appointee of President Bill Clinton.

Health Affairs: Appeals Court Upholds Rule Relaxing Short-Term Plan Restrictions
By Katie Keith

Key Points:

• The court reaches its conclusion while acknowledging the serious gaps in STLDI coverage. As Judge Thomas B. Griffith—writing for himself and Judge Gregory G. Katsas—puts it, “You get what you pay for.” STLDI plans, he notes, offer “skimpier coverage” and “higher deductibles” and “expose consumers with undiagnosed preexisting conditions to the risk of cancellation.” (The dissent also notes concerns about STLDI, including the fact that most STLDI does not cover outpatient drugs, mental health services, or maternity care.)

• Judge Judith W. Rogers dissented. Relying heavily on the Supreme Court’s decision in King v. Burwell, she concludes that the rule “flies in the face” of the ACA “by expanding a narrow statutory exemption beyond recognition” to create an alternative market exempt from the ACA’s reforms. Though Congress allowed limited exemptions to the ACA’s requirements, STLDI was never intended to be a form of primary coverage. The Trump-era rule thus exploits this limited exemption by allowing STLDI to compete with ACA plans as an alternative coverage option. As she puts it, “It is difficult to imagine a starker conflict between a statutory scheme and a rule that purports to administer it.”

• STLDI does not have to comply with the ACA’s market reforms. This means that short-term insurers can charge higher premiums based on health status, exclude coverage for preexisting conditions, impose annual or lifetime limits, opt not to cover entire categories of benefits, rescind coverage, and require higher out-of-pocket cost-sharing than under the ACA. These coverage limitations can lead to significant gaps for consumers who enroll in these products and become sick or injured.

• A year-long investigation by the U.S. House of Representatives’ Energy and Commerce Committee, which culminated in a 197-page report, reiterated many concerns that have been raised about STLDI in other analyses. Prior studies showed that STLDI is marketed using misleading and fraudulent practices, discriminates against individuals with preexisting conditions, offers limited financial protection, and engages in post-claims underwriting. Other analyses—from the Kaiser Family Foundation and the Leukemia and Lymphoma Society as well as a Trump administration assessment—have found that the sale of STLDI raises premiums for people with preexisting conditions who purchase coverage in the ACA markets. The House’s report found that these STLDI practices are widespread among the 14 major sellers and marketers of STLDI plans.

###