Two weeks ago, a federal appeals court upheld the freedom of consumers to purchase health plans that are exempt from the Affordable Care Act’s costly regulations; that consumers can purchase year‐round; and that can cover enrollees for a full year—including during the 10‐month period that the ACA prohibits consumers from purchasing ACA plans. Short‐term, limited duration insurance (STLDI) plans offer consumers additional choice. Since they are exempt from the ACA, they cost dramatically less than ACA plans and often offer greater choice of health care providers.
Last week, I published an oped in The Hill praising the appeals‐court ruling. I noted that the lead plaintiff in the case is a lobbying group—the Association for Community Affiliated Plans—that represents private insurance companies who sell ACA plans. The group asked the courts to impose a rule that would throw STLDI enrollees out of those health plans after just three months. Insurance regulators at the National Association of Insurance Commissioners have warned such a rule would strip coverage from sick patients, leaving them uninsured for up to an entire year. As it turns out, the regulators were right: when that rule was briefly in place during 2017, it stripped Arizona resident Jeanne Balvin of her STLDI plan, leaving her with $97,000 in hospital charges and no coverage. The court agreed that the rule ACAP desires would create situations where sick STLDI enrollees “could be denied a new policy ‘based on preexisting medical conditions.’”
ACAP admitted in court both that it is seeking that rule because STLDI plans are cutting into its members’ revenues, and that it wants the courts to throw STLDI enrollees out of their plans after three months because that would improve its members’ revenues. I wrote:
Complaining that STLDI plans were cutting into their business, ACAP asked federal courts to remedy that “injury” by reinstating this heartless rule.
To be clear: ACAP is asking federal courts to improve its members’ bottom lines by stripping coverage from their competitors’ enrollees after three months, because doing so will frighten consumers into enrolling in ACAP members’ plans. ACA plans must not be very attractive if the insurers who sell them feel they cannot compete unless the government actively punishes people who choose their competitors’ plans.
Today, The Hill published an equal‐length rebuttal by Margaret A. Murray, the head lobbyist for ACAP. The oped is heavy on rhetoric. It labels STLDI plans “junk insurance,” for example, a phrase that appears an average of once per paragraph. (More about junk insurance in a moment.) Worse, the oped gets crucial facts wrong.
It claims, incorrectly, that ACA plans neither deny coverage for preexisting conditions nor impose lifetime caps on benefits. On the contrary, for 10 months every year, ACA plans do both. In effect, and with few exceptions, the ACA prohibits enrollment in ACA plans except during a narrow window in November and December. During the other 10 months of the year, the ACA effectively offers a benefit limit of $0. As any honest ACA supporter will tell you, the purpose of that restriction is to block people with preexisting conditions from enrolling in coverage during those 10 months.
For 10 months every year, therefore, STLDI plans offer more comprehensive coverage than ACA plans. You can see for yourself: call up one of the insurance companies Ms. Murray represents and one STLDI issuer, tell them you would like to enroll in one of their health plans right now, and see how much coverage each insurer offers you.
ACA plans deny coverage to people with preexisting conditions in other ways as well. Last week, the Cato Institute held a forum exploring the case of seven‐year‐old leukemia patient Colette Briggs. ACA‐participating plans have repeatedly dropped coverage for Colette’s cancer treatment. Colette’s parents have had to fight with insurance companies, plead with Congress, and go to the media to get ACA plans to cover Colette’s care. They often failed.
ACA plans are treating Colette this way for the same reason economists have found ACA plans are getting increasingly worse for patients with other expensive illnesses: the ACA literally rewards insurers who discriminate against such patients in these ways. Chances are extremely high that ACAP’s members are doing the same. (Who’s selling junk insurance now?) If both ACA and STLDI plans have downsides, why not let consumers decide which they prefer?
There are plenty of other problems with Murray’s oped. It claims STLDI plans engage in misleading marketing, yet it neither substantiates that allegation nor acknowledges the ACA owes its existence to misleading marketing. (Sprechen Sie, “If You Like Your Health Plan, You Can Keep It”?) It derides measures that protect consumers and insurers from fraud as if they were some evil plot. It fails to recognize that when STLDI plans offer less coverage than ACA plans, they are reflecting consumers’ preferences.
But the biggest problem with Murray’s oped is its refusal to take responsibility for ACAP’s actions. Insurance regulators and a federal court have warned ACAP’s desired rule will strip coverage from, and deny care to, sick patients. ACAP has admitted in federal court that it is pursuing that rule in order to improve its members’ bottom lines. Murray’s oped blames everyone else in sight for the damage everyone knows her organization’s actions would cause in the pursuit of more money for its members.