PA Warns Of ‘Deceptive’ Short-Term Insurance Plans

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TRANSFORMING HEALTH – The Pennsylvania Department of Insurance is requiring companies to put a consumer notice on short-term, limited duration health insurance plans indicating that they aren’t regulated and may not offer much of what people have come to expect from health insurance.

“It basically says, ‘This is not major medical coverage, these may not cover the things major medical insurance covers,'” said Pennsylvania Insurance Commissioner Jessica Altman.

The move comes after the Trump administration’s recent rule, which allows people to sign up for the short-term plans for up to a year and renew the plans twice, allowing up to three years of continuous coverage. A previous, Obama-era rule limited the use of short-term coverage to 90 days.

Since the rule change, companies have begun to advertise the plans as a lower-cost alternative to the Affordable Care Act, Altman said. That, she said, amounts to “deceptive marketing.”

The department can penalize those whose advertising says something explicitly untrue, Altman said. However, some of the advertising manages to remain technically true — for example, advertising cheaper coverage — while not mentioning what the insurance includes.

“Yes, it may be cheaper for what you pay every month, but if you actually need care, you’re going to end up paying a lot more,” she said.

The department has already revoked eight insurance agent licenses in the past two years, and with efforts to sell short-term insurance on the rise, people are likely to see an increase in deceptive advertising.

The short-term plans aren’t regulated through the Affordable Care Act, and can deny someone coverage for a pre-existing condition or deny coverage for that condition, Altman said. Those pre-existing conditions can be something as serious as cancer, or something as commonplace as acne.

Short-term plans also may not cover services most people would consider to be essential, such as doctor’s visits, prescriptions and visits to specialists, she said.

Altman encouraged consumers to consider their health care needs and read the fine print before buying a short-term plan.

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