Number of uninsured could rise under Biden's proposed three-month limit to short-term plans 

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The Biden administration's proposal to limit the duration of short-term health  plans to three months would likely increase the uninsured rate, according to Mackenzie Wallace, a partner in Thompson Coburn's Dallas office.

"Limiting the length of coverage could increase the uninsured population," Wallace said of the proposed three-month limit.

This would have significant implications for hospitals and health systems, said Wallace, who represents health systems and hospitals, especially in litigation over denied claims.

Some individuals, such as those job-hunting and believing they'll regain coverage in three months, could be caught off-guard and uninsured, she said.

"It concerns me, someone not covered during that time," Wallace said. "When I looked at that particular piece of legislation, if you shorten the length of coverage … it endangers the underinsured or uninsured population."

WHY THIS MATTERS

The population most at risk for being uninsured or underinsured are younger adults, especially those who are unemployed and people with limited incomes. The latter group does not include seniors, who have access to Medicare.

While the Affordable Care Act offers plans for as little as $10 a month, the coverage still requires people to go online and pay, something many people whose incomes are at the poverty level, are unwilling to do, according to Wallace. 

Many then are willing to take the risk that they'll remain healthy, with the result that it's the health systems who pay for uncompensated care.

"Most," she said of hospitals, "don't heavily pursue through collections."

The uninsured rate in Texas is 18% of the state's population, she said. Texas has 1.7 times the national average of the uninsured rate. Among non-elderly people, that's 20%, she said.

THE LARGER TREND

Short-term plans are meant to offer coverage to individuals who have changed jobs, have moved or for other reasons need health insurance for a limited time. 

Critics have argued these plans are exempt from patient protections in the Affordable Care Act, such as coverage for preexisting conditions. 

The proposed regulation, released in July, would limit the length of short-term, limited-duration health insurance plans to three months, with room for a one-month extension. 

Some Republicans have objected to Biden's proposal, saying the coverage period is too brief and could lead to uninsured consumers.

It would overturn Trump administration policy that, in 2018, rescinded previous rules so that consumers had access to inexpensive, year-round coverage. Short-term plans were allowed to last 364 days and be renewed for an additional two years, for a maximum length of 36 months. 

Out-of-pocket spending under short-term plans is far higher than what is permitted in comprehensive coverage, according to the Commonwealth Fund.

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org