Limiting Short Term Health Insurance Prevents People from Getting Health Insurance

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Congress exempts STLDI [short term limited duration insurance] plans from all federal medical insurance regulations. As a result, premiums are sometimes 90 percent lower than ObamaCare premiums and ObamaCare’s preexisting‐​conditions provisions aren’t always making coverage worse for the sick in STLDI plans.

In 2016, the Obama administration arbitrarily limited the duration of STLDI plans to three months. In 2018, the Trump administration issued a final rule that enables initial STLDI contracts to last as long as 12 months; allows enrollees to renew that initial plan for as much as 36 months; and allows consumers to stitch together as many 36‐​month plans as they like using “renewal guarantees” that protect them from underwriting after enrollment.

That is from the at all times insightful health economist Michael Cannon today. His post, “GAO Report Neglects to Mention the Cruelty of Limiting Short-Term Plans,” Cato at Liberty, June 2, 2022.

One other excerpt:

Balvin soon required emergency surgery for diverticulitis. (Her STLDI plan paid promptly and fully for her hospital care.) On the time, federal rules required her insurer to cancel quite than renew her STLDI plan after three months. Those rules subjected Balvin to underwriting when she went to buy a subsequent three‐​month plan, which meant that plan wouldn’t and will not cover her second hospitalization for a related condition. Those federal rules left Balvin to face $97,000 in hospital charges with no insurance. The NAIC foretold this consequence of limiting STLDI‐​plan durations and renewals. Those that seek to limit STLDI are actually attempting to deny consumer protections and coverage to the sick.

The entire thing is well price reading.

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