The window on patients being able to carry so-called skimpy insurance plans may get larger after CMS and other federal agencies co-released a proposed rule that would extend the duration of such plans to 12 months. The move might restrict access to some providers and services, notes CMS.
Previously, individuals could carry a "short-term, limited duration" plan, which doesn't meet the minimum coverage benefits of the Affordable Care Act (ACA), for three months. This type of coverage, which
CMS says "is designed to fill temporary gaps in coverage when an individual is transitioning from one plan or coverage to another form of coverage," is exempt from the ACA essential health benefits minimum, which means insurers can offer different packages that may be less costly -- and cover fewer services or procedures -- than ACA plans.
In 2016, a short-term, limited duration plan cost an average of $124 per month for individual coverage, compared to $393 for an ACA plan that met the minimum coverage requirements under law, says CMS.
The impact of the proposal remains to be seen. CMS estimates that up to 200,000 individuals will switch from an ACA-compliant plan to a short-term, skimpy plan in 2019, should the rule be finalized as written. Purchasers "are likely to be relatively young and healthy," notes the proposed rule.
The withdraw of healthy, young individuals may lead to rising premiums as soon as 2019, CMS concedes. The agency also puts out a risk table of potential benefits and drawbacks of the proposal. On the plus side, CMS says, the proposed rule may lead to "increased access to affordable health insurance for consumers unable or unwilling to purchase PPACA-compliant plans, potentially resulting in improved health outcomes for them."
At the same time, that could mean "reduced access to some services and providers for some consumers who switch
from PPACA-compliant plans" and "increased out-of-pocket costs for some consumers, possibly leading to financial
hardship."