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Short-Term Plans May Short-Change Purchasers

The short-term health insurance plans that the administration proposes making more available to consumers as an alternative to comprehensive health insurance that meets Affordable Care Act coverage requirements may leave consumers with greater out-of-pocket costs and less coverage for some critical services.

According to a Kaiser Family Foundation review of available short-term, limited duration plans in 10 markets across the country, those plans:

  • often do not cover mental health and substance abuse services and outpatient prescription drugs
  • may turn down individuals or charge them higher premiums based on age, gender, or health status, including pre-existing conditions
  • require greater cost-sharing by their purchasers
  • do not cover maternity services at all

Such plans are not required to comply with the Affordable Care Act’s essential health benefits requirement.

Such plans may pose a particular risk to Pennsylvania safety-net hospitals because residents of the low-income communities they serve may be especially inclined to purchase such less-expensive health insurance.  When that insurance fails to cover some of the cost of caring for such patients, urban safety-net hospitals may be left with unreimbursed expenses for costs those patients are unable or unwilling to pay.

For a closer look at short-term health insurance plans, how they operate, and what they do and do not cover, see the report “Understanding Short-Term Limited Duration Health Insurance, which can be found here, on the web site of the Kaiser Family Foundation.

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2012 Safety-Net Association of Pennsylvania