As promised, the Trump administration has issued proposed rules that would allow individuals to skirt Affordable Care Act regulations and buy short-term, low-coverage health plans.
Under the proposal, individuals would be able to purchase short-term plans that last up to 12 months, compared to the three-month maximum under the ACA.
The proposal would also exempt these short-term plans from ACA rules about what kind of coverage individual health plans are supposed to have, like covering 10 essential health benefits and barring insurers from rejecting individuals with pre-existing conditions.
The administration said short-term plans are meant for people who:
- Cannot afford ACA coverage purchased on exchanges,
- Are between jobs and need temporary coverage that’s cheaper than COBRA, or
- Have doctors who are not included in plans offered on public exchanges.
The Department of Health and Human Services predicted that 100,000 to 200,000 Americans would switch from individual market plans to short-term policies thanks to the new rules.
Short-term health insurance covered 148,118 people in 2015, according to the National Association of Insurance Commissioners.
Under the proposed rules, insurance companies would be required to prominently display in the contract and application materials that the policy is exempt from ACA protections.
Who would buy these plans?
Short-term health insurance is meant to provide temporary coverage for people transitioning between traditional health policies, perhaps because they are changing jobs.
Short-term plans are usually accepted at more doctors’ offices and hospitals compared with traditional insurance plans, which are often limited to narrow networks. And they are usually cheaper.
Healthier and young individuals who don’t think they need full coverage would likely choose these types of plans, which would pull them from the ACA markets. If that happened, marketplace plans could be left with an older and less healthy pool of covered individuals, which would likely force them to raise rates.
Short-term insurance plans cost an average of 25% less than bronze plans on the individual marketplace, or $65 less per month, according to data from AgileHealthInsurance.
The pricing is low because these plans don’t offer the 10 essential health benefits as normal ACA-regulated plans do (things like pregnancy care and mental health treatment) and they are not required to cover pre-existing conditions.
Currently, there are only a few players in the short-term health plan market, as the ACA allows individuals to carry short-term insurance plans for a maximum of three months. But, since the Trump administration announced in October 2017 that it would propose new regulations for short-term plans, more carriers have been exploring entering the market.
Two major industry lobby groups – America’s Health Insurance plans and the Blue Cross Blue Shield Association – have warned that the short-term plans could harm state insurance markets.
Helping Your Staff Get the Most from Their HSA Plans
As more employers adopt high-deductible health plans, which leave their employees with more “skin in the game,” it’s important that you educate them on how to get the most out of the attached health savings accounts.
Unfortunately, your employees may not be using the funds in their HSAs as efficiently as they should, and they could be leaving money on the table. One of the most common ways that happens is spending those funds on inappropriate care or misdiagnosed afflictions. It’s estimated that up to $1 trillion a year is spent on this type of erroneous care.
The nice thing about HSAs is that they have a threefold tax benefit:
- Money goes into the accounts pre-tax,
- The funds in the HSA grow tax-free, and
- Funds are withdrawn tax-free if used for qualified medical expenses.
Also, funds in an HSA remain in the account. There is no use-it-or-lose-it provision and workers retain ownership of the account even if they switch employers. They also can be kept until retirement and, like an IRA, your staff can roll over or combine HSAs if they have more than one.
But it behooves your employees to learn how they may be squandering the funds they have put into their HSAs
Examples of unnecessary care
- Duplicate tests, because doctors don’t have access to a patient’s full medical records when they go to two or more treatment centers.
- Overtreatment for common conditions such as back and joint pain, some types of cancer, and stable heart disease.
- False positives from tests, leading to follow-up tests.
- Replacement of less costly gold-standard medications and treatments with new and more expensive alternatives that may not yield better results.
- Care that was delivered on the insistence of a patient when it was not needed or medically appropriate.
Tools for corraling health spending
Fortunately, there are means available to help your employees better decide how to spend their HSA funds.
First and foremost, the majority of medical expenses, like office visits, are reimbursable and the employee should tap the HSA whenever they incur a copay, deductible or outlays for medicine.
Shopping around – If they are told they need a procedure, they can take matters into their own hands and shop around for the procedure among the available treatment facilities in the group network. Doing this can save thousands of dollars.
Second opinions – Getting a second opinion is important, particularly after:
- Receiving a diagnosis of a serious or complex health problem,
- A doctor recommends elective surgery, or
- If the diagnosis is not clear.
Fortunately, many group plans have second-opinion programs as stand-alone services or included as part of an advisory or vendor management program, and through medical centers of excellence.
Objective, evidence-based research – Supplying employees with evidence-based information on treatment options, presented in plain English, can help them understand their options, make more informed decisions, and avoid inappropriate testing and treatment.
It’s also helpful if this resource includes the option to speak with someone via phone or web chat who can answer questions about the information and suggest additional resources.
Referrals to experienced health care providers– Accurate diagnosis begins with connecting employees with the right physicians. The ability to connect workers with physicians who have proven experience and expertise in treating the condition that they’ve been diagnosed with can lower the risk of misdiagnosis and inappropriate treatment.