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Consumers Need More Short-Term Insurance Protection, Brief Argues

March 24, 2020

Two think tanks filed an amicus brief to ask the D.C. Court of Appeals to uphold a U.S. District Court decision concerning the duration of short-term, limited-duration insurance plans (STLDI).

In the January 29 brief, The Buckeye Institute and the Cato Institute contend that the Trump administration acted within its authority when it reinstated a rule to allow STLDIs to last for 12 months. The brief also argued that the three-month limitation implemented under the Obama Administration is too short to provide adequate coverage.

“The Congressional Budget Office estimates that approximately 700,000 Americans, who would otherwise be uninsured, are covered by short-term insurance plans, making it clear that limiting the length of time people can be covered to three months doesn’t just limit choice and competition, but it also threatens to inflict real harm on real people,” stated Robert Alt, president and chief executive officer of The Buckeye Institute.

In October 2017, the Trump administration issued new rules that would expand association health plans and short-term plans. The rules were immediately challenged in federal district court in the District of Columbia. In July 2019, Senior Judge Richard Leon ruled in favor of the short-term rule change. The ruling was appealed within weeks and is now before the U.S. Court of Appeals for the District of Columbia Circuit.

Short-term plans give consumers an affordable health insurance option between jobs. The plans could be used before the November enrollment period in the individual market or before a consumer finds a new job. In 2016, the Obamacare administration minimized the duration of the plans to three months.

“Even the National Association of Insurance Commissioners found that the three-month limit could strip health insurance coverage from consumers after they fall ill,” Alt said.

 

-Staff reports