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FAH Statement | ACA/Coverage | FAH Policy Blog Team

FAH Submits Comments on Short Term Insurance Proposed Rule

The Federation of American Hospitals submitted comments today on CMS’s proposed rule changing the definition of short-term, limited duration (STLD) insurance outlining how the changes would harm consumers and destabilize insurance markets.     

Under the proposed rule, the definition of a STLD plan would be changed from a plan with an expiration date that is less than 90 days to one with an expiration date that is less than 12 months after the original effective date – meaning a short-term plan could last as long as 364 days.

In the letter FAH wrote, “Consequently, under the proposed rule, it is likely that many consumers may be attracted to the lower costs offered by STLD plans and/or misunderstand their limitations, only to find that their coverage is ridden with gaps, leaving them without coverage for needed services and exposed to significant out-of-pocket costs. Moreover, FAH members and the health care providers that care for these individuals are concerned that the result will be increased uncompensated care, particularly for patients who need uncovered services or treatment for pre-existing conditions.”

FAH also highlighted the negative effects the proposed rule would have on insurance markets.

“By allowing the STLD plans to be available for the same duration as ACA-regulated products, more people are expected to enroll in such plans. Those who enroll, however, would likely be only those with the lowest likelihood of health needs and expensive treatment. Older adults and people with preexisting conditions would remain in the ACA-regulated individual health insurance market, creating additional instability in that market. Coverage of hospital services could be greatly compromised, leading to increasing numbers of underinsured individuals and rising hospital bad debt.”

You can read the entire comment letter by clicking here.