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Government NewsFull Access

APA Joins Lawsuit Against Trump’s ‘Skimpy’ Plan Rule

Published Online:https://doi.org/10.1176/appi.pn.2018.10b7

Abstract

APA joins a coalition to file suit against the administration’s new rule that expands short-term, limited duration health plans.

APA joined a coalition of mental health and health advocacy groups last month to file a federal lawsuit to invalidate a new Trump administration rule that expands short-term, limited-duration health plans, dubbed “skimpy” plans for the sparse coverage they provide.

The coalition argued in its complaint that the final rule, which took effect October 2, violates the plain-English meaning of “short term” by allowing the sale of plans providing up to one year of coverage instead of the current three months and “limited duration” by allowing renewals for up to three years instead of one. The plans were originally intended to fill short-term gaps in coverage, such as when individuals are between jobs, and were permitted for sale for up to only three months at a time, with renewals of up to one year.

The coalition also argued that the rule creates an unauthorized alternative to plans that comply with the Affordable Care Act (ACA) and undercuts such plans, making them increasingly unaffordable. APA was joined in the lawsuit by the National Alliance on Mental Illness, Mental Health America, National Partnership for Women & Families, Association for Community Affiliated Plans, AIDS United, and Little Lobbyists.

“This rule jeopardizes the insurance coverage of many Americans with complex medical needs that require strong, predictable insurance protection and care,” said APA President Altha Stewart, M.D. “Without this coverage, patients with complex medical needs will suffer and often end up in emergency rooms, raising health care costs. We call upon the administration to drop this rule and enforce the protections of the Affordable Care Act.”

The plans are sold in the individual market, representing about 10 percent of health insurance plans sold, and are bought by people without employment-based or government-sponsored insurance. With efforts to repeal and replace the ACA having failed so far, this rule is purportedly aimed at providing more affordable consumer choices.

Short-term health plans are typically less expensive than comprehensive plans, but they are not required to cover the ACA’s required “essential benefits,” such as mental health and substance use disorder services, prescription drugs, hospitalization, emergency services, or maternity care. Similarly, short-term plans are not subject to consumer safeguards or antidiscrimination rules that the ACA requires. For instance, insurers can deny coverage for preexisiting conditions; set higher premiums based on age, sex, or health status; retroactively cancel coverage; and deny renewals. Short-term plans may also increase uncompensated care for health care providers, the coalition wrote.

The exclusions and lack of safeguards can lead to disastrous results and bankruptcy for consumers, the coalition said. For example, one man in Washington, D.C., purchased a short-term plan with a stated maximum payout of $750,000 and thought that he was well covered. When he filed a claim for a hospitalization bill that topped $211,000, however, the plan reimbursed him just $11,780 and denied the rest, in part due to his father’s medical history.

The final rule threatens the lives of Americans by taking away needed treatment, said Paul Gionfriddo, president and CEO of Mental Health America. “At a time when suicide and overdose deaths have hit epidemic levels and continue to rise, the last thing we need is a rule that confuses consumers and offers worse mental health and substance abuse benefits.”

The National Alliance on Mental Illness (NAMI) is concerned that expanding skimpy health plans will result in excluding people with mental health conditions from care. “For the past 20 years, NAMI has fought for parity—the fundamental tenet that mental health care is just as important as physical health care,” said Mary Gilberti, CEO of NAMI. “This rule change rolls back the clock on Congress’ bipartisan efforts to ensure patient protections and fair insurance coverage of mental illness.” ■

The coalition’s statement can be accessed here. The Short-Term, Limited-Duration Insurance Final Rule is available here.