by Naomi Lopez
August 28, 2018
Illinois healthcare consumers can breathe a sigh of relief today. Over the weekend, Illinois Governor Bruce Rauner vetoed a bill that would have slammed the door shut on short-term health insurance options. These policies are particularly appealing to those who are in-between jobs, do not qualify for a subsidy in the ACA health insurance exchange, or who live in an area with few or no in-network health providers.
Illinois HB 2624 would have reduced short-term limited duration insurance (STLDI) to no more than six months and would have prohibited renewal guarantees for these policies. There are some who fear that these temporary, “bare bones” plans aren’t required to offer the same benefits as Affordable Care Act (ACA, commonly referred to as Obamacare) plans, including essential health benefits, guaranteed issue, and pre-existing condition protections—leaving the insured with more modest benefits and lower coverage limits than what the ACA requires. But they do offer an option to people needing coverage but who found ACA plans to be ill-suited to their needs due to cost or personal preferences.
The Trump administration recently issued a final rule to expand the availability and coverage length of short-term limited duration insurance (STLDI). The Obama administration restricted these plans in October 2016 to three months and prohibited renewability, limiting the choices for healthcare consumers. In the recently issued final rule, these policies are, once again, allowed for up to one year and are renewable. As I wrote on In Defense of Liberty earlier this month, the issuance of this final rule is great news for healthcare consumers across the country, giving them more choices to satisfy their care needs.
Under current Illinois law, and thanks to Governor Rauner’s veto, the short-term plans will remain an option in the state and will give some consumers more options when it comes to meeting their healthcare needs and preferences. These plans typically cost a fraction of the current ACA plans—50 to 80 percent less. And the new federal rule not only restores the availability of this more affordable coverage option, it expands the potential utility of these once-popular plans by making these plans potentially renewable for up to 36 months. The new rule also includes robust requirements that insurers inform consumers about the coverage limitations of these short-term policies.
Today, more than 800,000 Illinoisans remain uninsured, and that number is creeping up. Although short-term plans are not suitable for everyone, they do allow some consumers another option for coverage. Many of the Illinois residents who have seen their insurance premiums more than double, have already joined the ranks of the uninsured, or find themselves facing a job loss should be relieved that this coverage option will continue to be available.
There is no question that congressional lawmakers must revisit the hard work of providing more affordable healthcare access and consumer choice. But their failure to so thus far shouldn’t mean that Illinois consumers should be subject to a single one-size-fits-all option.
Naomi Lopez is the director of healthcare policy at the Goldwater Institute.