Health consumers shopping for an ACA plan online may find themselves buying a skinny plan.
Short-term health insurance may be causing some long-term headaches. A report by the Urban Institute claims that insurance consumers are confusing short-term plans with ACA plans. Short-term plans, also known as skinny plans, are not part of the ACA, offer a much lower level of coverage and have only recently been allowed because of a federal ruling. According to the Urban Institute study, the marketing of short-term plans is misleading and regulators are playing whack-a-mole.
The recent federal ruling extended short-term plans from three months to full year, making short-term plans competitive with more established, substantial forms of coverage. Short-term plans are also exempt from critical ACA standards such as preexisting conditions, minimum coverage and out-of-pocket caps. The original intention of short-term plans was as a temporary patch between insurances, but with full year coverage available in many states, short-term plans are shopped like any other plan.
Marketing of Short-Term Insurance Plan
The Urban Institute conducted a marketing scan to see how short-term plans were being presented online. They searched Google using the terms “cheap health insurance”, “Obamacare plans” and “ACA enroll”. Keywords like “ACA enroll” would often land users on pages where only short-term plans were offered. The study found that customers were being overwhelmingly led to believe short-term plans were part of the ACA or offer the same coverage as ACA plans.
Policing Short-Term Plans
Regulators have been slow to monitor short-term plans. States have the ability to outlaw short-term plans altogether, which California has done. States can also determine the duration of the plans. Minnesota and Colorado, for instance, have limited short-term plans to six months.
States do not have power to punish insurers over marketing and advertising. Few states force plan disclosure by short-term providers, let alone advertising and marketing materials. Even if they did, states do not have the resources to review all marketing and advertising from insurers marketing these plans, according to the study. The best states can do is to educate consumers about the differences between ACA plans and short-term ones.
If marketing is any indication, the short-term plans certainly have appeal among price conscious health consumers. It’s likely the new short-term plans have put a even dent in 2019’s disappointing ACA enrollment numbers.