Donnelly Helps Introduce Legislation that would Overturn Expansion of “Junk” Insurance Plans

The plans, which don’t require coverage for those with pre-existing conditions, are expected to raise health care costs for Hoosiers

Washington, D.C. – U.S. Senator Joe Donnelly helped introduce legislation that would overturn the Administration’s recently finalized rule about short-term “junk” insurance plans. These plans continue the Administration’s efforts to undermine health insurance markets and are expected to raise health care costs for Hoosiers, while failing to offer essential coverage and protections for those with pre-existing conditions.

Donnelly said, “The Administration’s efforts to expand ‘junk’ plans – which are likely to raise costs for consumers without covering those with pre-existing conditions – are misguided. The legislation I helped introduce would overturn this bad rule, and help stop the Administration’s ongoing efforts to undermine our health care system.”

The new rule on short-term health plans will allow consumers to buy so-called “junk” plans for up to 364 days at time, reversing the current limitation that these plans can only be used for three months at a time as a bridge option for consumers. These plans, sold outside of the current health insurance exchanges, including in Indiana, allow insurers to deny coverage for those with pre-existing conditions. Short-term “junk” plans are scheduled to become available in two months, and could further harm the individual marketplace when open enrollment begins for consumers this fall.

These plans will allow insurers to charge more when consumers are sick and higher rates for older Hoosiers. In addition, these plans are not required to cover essential health care benefits including emergency services, mental health care, prescription drugs, and preventative care. The “junk” plans can be renewed for a maximum of up to three years, though insurers could choose not to allow consumers to extend coverage if someone gets sick or is diagnosed with cancer or another disease, for example.

According to the Kaiser Family Foundation, approximately 30 percent of Hoosiers under the age of 65 (more than 1.1 million people) have pre-existing conditions that could have left them with no coverage or facing higher rates, before the Affordable Care Act prohibited such discrimination. 

The Centers for Medicare and Medicaid Services Chief Actuary projected earlier this year that the short-term plan rule would raise premiums and cost the federal government $38.7 billion.

21 patient groups sent a letter to the Departments of Labor, Treasury, and Health and Human Services opposing the short-term plan rule, writing “we are deeply concerned about the impact the proposed rule on short-term plans will have on the individuals and families we represent.” These groups include the American Cancer Society Cancer Action Network, American Heart Association, American Lung Association, and Cystic Fibrosis Foundation. In addition, 98% of health care groups who commented on the proposed rule were in opposition.

For the 2019 enrollment period, as part of its ongoing efforts to sabotage health insurance markets, the Administration will encourage organizations that do receive enrollment funding to promote off-market “junk” insurance plans that do not cover pre-existing conditions or offer other basic benefits and protections.

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