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Health Groups Sue Over Short-Term Insurance Plans

Critics warn plans would yield discriminatory practices

The U.S. Capitol building is seen behind two ambulances Friday, June 15, 2018. (Bill Clark/CQ Roll Call)
The U.S. Capitol building is seen behind two ambulances Friday, June 15, 2018. (Bill Clark/CQ Roll Call)

Seven health care groups sued Friday to invalidate the Trump administration’s plan to expand the sale of short-term health insurance plans, arguing they don’t actually meet the definition of “short-term.”

The plans would harm patients and disrupt insurance markets nationwide, the groups say. Under the rule, it could become more difficult for patients with pre-existing conditions to obtain health coverage. The administration’s “justifications for this rule are directly contrary to the congressional determinations embodied in the text and structure of the ACA,” they argue.

“Like any law, the ACA can be repealed by act of Congress,” the lawsuit reads. “But Congress has repeatedly rejected attempts to repeal the ACA. Now, with the issuance of the [Short-Term, Limited Duration Insurance] Rule, the Departments seek to do by executive fiat what could not be accomplished through the required constitutional process.”

The administration finalized a rule last month to expand the length of short-term plans to a maximum of 364 days, up from the current three-month duration, reversing a change the Obama administration made in 2016.

The final rule would allow a consumer to renew that plan for up to three years. Short-term plans don’t have to comply with all the regulations under the 2010 health care law, and officials have said they offer a less expensive insurance option for some consumers.

The groups — the Association for Community Affiliated Plans, the National Alliance on Mental Illness, Mental Health America, the American Psychiatric Association, AIDS United, the National Partnership for Women & Families and Little Lobbyists — filed the suit in the U.S. District Court for the District of Columbia.

Critics have labeled the plans “junk insurance,” and warned they would restore discriminatory practices common before the 2010 law passed, such as charging more for patients with pre-existing conditions. They also said the plans would drive up costs for people buying insurance on the exchanges.

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