Statements made by U.S. Secretary of Health and Human Services Alex M. Azar II in an Aug. 20 commentary (“How Trump is helping Obamacare’s victims”) about the value of “short-term, limited-duration” health insurance plans don’t pass the smell test for truthfulness. As the ranking member of the Minnesota Senate’s committee on health and human services, I caution consumers to read the fine print before they explore this option as an alternative to comprehensive coverage. When something sounds too good to be true, it often is.
The vast majority of Minnesotans get their coverage through either a private employer-sponsored plan or a public program. Although just 4.4 percent of Minnesotans buy individual plans, it is a segment of consumers who face unique financial uncertainty if private insurers raise their prices.
After reading Azar’s commentary, one is led to believe that short-term, limited-duration insurance is going to make life better for these individuals. In reality, these plans are akin to allowing auto manufacturers to cut the price of manufacturing a car by using paper air bags — they are cheaper and work great, until you crash. The lower prices advertised by Azar are possible only because the product he’s selling is a total clunker. These plans should be used in only the rarest of circumstances.
According to the Minnesota Department of Commerce, short-term, limited-duration insurance is an option designed to be an emergency bridge when gaps in care occur as a result of the unexpected. Under Minnesota law, consumers can enroll in this form of insurance for up to six months. Consumers cannot renew their plan, but they can buy a new one, meaning they can have coverage under short-term plans for up to 365 days (within an 18-month period). The Trump administration and some state lawmakers are pushing to expand those limits.
Azar praises these plans for offering lower monthly premiums, but what he doesn’t tell you is that they do not offer comprehensive coverage, do not prohibit private insurers from denying care if you have a pre-existing medical condition, and limit the amount of care you receive when you get sick. For heaven’s sake, many of these plans cap what they will spend and do not even have to cover essential benefits like prescription drugs!
People on the individual market who are healthy could trade their comprehensive care for clunker insurance to cut their monthly premium down for a while, as Azar says, but doing so puts them at risk of financial ruin in a medical emergency. For example, a Star Tribune editorial in May (“Buyer beware of health plan ‘reforms’ ”) informed consumers that short-term plans may only contribute $1,000 per day should they find themselves in the hospital. The federal government’s HealthCare.gov website pegs the average cost of a three-day hospital stay at $30,000. You do the math.
Trump’s plan will make good coverage even costlier. When healthy consumers are pushed out of the individual market pool in favor of clunker insurance, as Azar advocates, it means the people who remain and need good coverage will pay even higher premiums than before.
It is troubling to watch the Trump administration take action to dismantle years of work that have gone into expanding quality coverage to more Minnesotans. Whether it’s slashing funding to important programs that lower the cost of insurance, eliminating the individual mandate, or now pushing risky insurance plans onto unsuspecting Minnesotans, the Trump administration is driving up prices and making it harder for people to get quality coverage.
Affordability is rightly on people’s minds when it comes to health coverage, but many people are unaware that help may be available for them to get covered. Right now three of four uninsured Minnesotans are eligible for financial help either through a public program or federal tax credits. These individuals are not “priced out” but rather face complicated barriers to getting the care they need.
But there are still Minnesotans who don’t get help but deserve it, which is why I teamed up this year with my colleague Sen. Scott Jensen, R-Chaska, a practicing physician, to introduce a smarter alternative. Our bill creates a refundable state tax credit for those who make too much to qualify for federal tax credits. It would completely eliminate the gap that prevents some families from receiving thousands of dollars to offset the costs of their monthly premiums.
When a new governor and Legislature return to the State Capitol in January, health care will be a major topic of conversation. “Short-term, limited-duration” insurance should not be a part of that conversation.
This counterpoint was originally published in the Star Tribune.