We have started to turn the corner in the fight against the coronavirus with vaccines being deployed, and all adult Americans will be able to schedule vaccine appointments without barriers, the early stages of the pandemic exposed major gaps in our healthcare system.
Pennsylvania was not immune to these gaps — with an uninsured rate that likely skyrocketed from 5.4%, an unemployment rate of 7.3% that ranks in the bottom 10 of all states, and an aging population that features nearly 5 million individuals with chronic diseases; the state faced serious issues when dealing with the pandemic.
The issue was only exacerbated by the prevalence of short-term, limited-duration insurance plans (STLDIs). These plans, also known as “junk plans,” are exempt from many Affordable Care Act (ACA) requirements, and usually exclude coverage for preexisting conditions, including conditions an individual did not know they had or were not aware required medical intervention; have limits on the payout for covered services; and are not required to cover preventive services. Above all, they pose grave threats to the consumer.
And even with the recently signed American Rescue Plan that takes major steps to help expand access to high-quality, affordable health insurance by boosting subsidies for marketplace plans, lowering the cap on monthly payments, and expanding free and low-cost options to the uninsured — especially the 25,000 in Pennsylvania — these plans still pose a major threat to the health and well-being of the state’s most vulnerable populations.
In a year in which joblessness around the country resulted in more than 5 million people losing their insurance coverage, these “junk plans” have proliferated.
What were originally set to be used as stop-gap measures — providing a few months’ worth of coverage while a more long-term solution was sought — have now turned into one-way tickets for weak coverage and high out-of-pocket costs.
This is an issue made worse by a Trump administration rule change that extended the time for which these plans can be offered (12 months) and renewed (up to three years). Many families in middle-income neighborhoods like those I represent in Germantown, Logan and West Oak Lane cannot afford the financial pitfalls associated with the lack of coverage STLDI’s provide and the high bills associated with care.
A recent survey from Consumers for Quality Care reveals that Americans across the board are fed up with junk insurance that doesn’t act like insurance. In fact, 84% of the people surveyed said insurance companies should not be allowed to sell plans that cover so little, making going to the doctor unaffordable even with insurance.
And yet, the lower price tag on these plans has been all the more appealing as Americans across the country, especially in Pennsylvania, who have lost coverage after losing their jobs due to COVID-19 look to carry any health insurance. But these low-price plans on the front end often turn to high costs on the back end as consumers, particularly those with chronic disease, lose coverage for pre-existing conditions, are forced to pay full out-of-pocket costs for prescription drugs and preventive/routing care, and are faced with maximum payouts for care.
I have been impressed with the work U.S. Sen. Bob Casey has done on this issue. Not only has he been an advocate for repealing the harmful Trump rule, but he has gone to great lengths to educate Pennsylvanians on how to avoid enrolling in one of these plans. Also, his request for a U.S. Government Accountability Office has led to revealing that junk plans were deceptively marketed to consumers as providing coverage for pre-existing conditions. The federal government, however, still needs to do more. Congress and the Biden administration need to work to eliminate — or at the very least scale back — these plans from the marketplace by reducing the length they can be offered to six months.
Beyond that, insurance companies need to be held accountable and prioritize transparency when selling these plans. Far too often, as the GAO report showed, insurers market these plans as providing full coverage, and the onus is oftentimes put on the consumer to dive into the weeds of a plan information — a task that proves confusing to anyone looking to enroll in a health insurance plan.
With COVID-19 cases still happening, and unemployment still high, consumers need to trust the health insurance they are being sold, and that cannot be done with the existing lack of transparency in the market. Quite frankly, we have too much going on in our lives to deal with deceptions from insurance companies, so the federal government should step in here.
The pandemic has left millions of Americans in a pinch. Health insurance is a necessity as Americans still grapple with the threat of COVID-19; but with these barebones, low-cost options as one of the only options for the recently unemployed, services fall far short when they are most needed. It’s time for the federal government to act and work to protect Americans from the threat of these harmful plans.