Reed Works to Protect Americans from Skimpy “Junk” Health Plans
Sen. Reed joins Sen. Baldwin & colleagues in urging Biden Administration to limit availability of junk health care plans that generate real bills, but offer little meaningful protection
WASHINGTON, DC – With Medicaid redetermination looming -- which could lead to millions of Americans losing their Medicaid eligibility as states return health coverage programs to pre-COVID status -- U.S. Senator Jack Reed (D-RI) says it is critical that the Biden administration take action against “junk” short-term health plans.
Rhode Island is a national leader when it comes to banning skimpy, short-rem junk health insurance plans and has standards in place (including no pre-existing condition exclusions and a requirement to spend at least 80 percent of premiums collected on medical care) to effectively block the sale of short-term plans in the state. Senator Reed says federal action is urgently needed before patients in other states who are likely to lose Medicaid coverage are targeted by unscrupulous brokers selling inadequate coverage.
This week, Reed joined a group of 32 U.S. Senators in sending a letter urging the U.S. Department of Health and Human Services (HHS) to take immediate action and address short-term limited duration insurance (STLDI) plans, (also known as “junk plans”), which fail to provide adequate, comprehensive health insurance coverage.
Junk plans cost people money and often deny coverage to people with pre-existing conditions and don’t have to cover essential services like maternity care, prescription drugs, substance use disorder treatment and emergency room care.
In 2018, in an effort to sabotage the Affordable Care Act (ACA), the Trump administration made junk plans more widely available to consumers. Since then, these plans have continued to expand, despite not adhering to important standards, including prohibitions on discrimination against people with pre-existing conditions, coverage for the 10 essential health benefit (EHB) categories and annual out-of-pocket maximums.
“Now, more than ever, the Department of Health and Human Services must act. Beginning in April, millions of Americans will likely lose the Medicaid coverage that they have relied upon during the COVID-19 pandemic. We must protect those who will be looking for coverage in the near future and take steps to ensure that these plans are not allowed to further proliferate,” wrote the 32 U.S. Senators. “It is past time for your Department to step up and address the expansion and proliferation of junk plans.”
The letter was led by Senator Tammy Baldwin (D-WI) and, in addition to Senator Reed, was also signed by U.S. Senators: Richard Blumenthal (D-CT), Cory Booker (D-NJ), Sherrod Brown (D-OH), Ben Cardin (D-MD), Bob Casey (D-PA), Christopher Coons (D-DE), Catherine Cortez Masto (D-NV), Tammy Duckworth (D-IL), Richard Durbin (D-IL), Dianne Feinstein (D-CA), Maggie Hassan (D-NH), Martin Heinrich (D-NM), John Hickenlooper (D-CO), Timothy Kaine (D-VA), Angus King (I-ME), Amy Klobuchar (D-MN), Ben Ray Luján (D-NM), Edward Markey (D-MA), Robert Menendez (D-NJ), Jeff Merkley (D-OR), Chris Murphy (D-CT), Patty Murray (D-WA), Alex Padilla (D-CA), Gary Peters (D-MI), Jeanne Shaheen (D-NH), Tina Smith (D-MN), Debbie Stabenow (D-MI), Chris Van Hollen (D-MD), Mark Warner (D-VA), Raphael Warnock (D-GA), Elizabeth Warren (D-MA) and Peter Welch (D-VT).
“Quality health insurance helps save lives. Junk plans cost real money, but fail to deliver the adequate health coverage people need. We need to ensure patients are protected and crack down on these deceptive policies which leave vulnerable people holding the bag and paying sky-high out of pocket costs,” said Senator Reed, who has worked for years to crack down on junk health insurance plans that do not provide coverage of pre-existing conditions or essential health benefits.
Medicaid is a joint federal and state-run health care program that helps cover about 350,000 people across Rhode Island.
As the COVID-19 public health emergency comes to an end and the nation makes continued progress toward pandemic recovery, states are beginning to reevaluate who is eligible for the program.
Pre-pandemic, state Medicaid programs would regularly redetermine each enrollee’s eligibility. As the wave of COVID-19 cases grew, Congress passed a law increasing matching funds for Medicaid if states kept people on the rolls throughout the public health emergency.
Last year, Congress passed a law requiring states to restart the Medicaid redetermination process by this spring. States must begin the redetermination process by April and it continues throughout the year.
Earlier this year, the Biden Administration announced that the COVID-19 public health emergency will end May 11, 2023.
Full text of the letter follows:
February 22, 2023
The Honorable Xavier Becerra
Department of Health and Human Services
200 Independence Ave SW
Washington, DC 20201
Dear Secretary Becerra,
As we celebrate the State of the Union and the important gains that we have made when it comes to expanding the availability of comprehensive, affordable health care coverage, we write once again to urge you to take immediate action and address short-term limited duration insurance plans, or, junk plans. Now, more than ever, the Department of Health and Human Services must act. Beginning in April, millions of Americans will likely lose the Medicaid coverage that they have relied upon during the COVID-19 pandemic. We must protect those who will be looking for coverage in the near future, and take steps to ensure that these plans are not allowed to further proliferate.
The Families First Coronavirus Response Act (Families First) (P.L. 116-127) provided additional federal Medicaid funding to states during the COVID-19 public health emergency in exchange for maintaining coverage, specifically by meeting certain maintenance-of-effort requirements. These requirements barred states from lowering income eligibility levels, imposing new premiums or other barriers to enrollment, and involuntarily disenrolling individuals from their programs. According to federal data, Medicaid enrollment has increased by over 30 percent since February of 2020, an additional 19.5 million people. Congress has also worked to provide additional financial support for those who purchase ACA marketplace plans, and in August, passed the Inflation Reduction Act, which extended the additional financial support first enacted as part of the American Rescue Plan. As a result of this additional support, consumers saved an average of $800 on their premiums in 2021, and will continue to see savings through 2025.
As part of the Fiscal Year 2023 (FY23) omnibus, Congress took steps to uncouple the maintenance-of-effort requirements included in Families First from the public health emergency in order to avert both a Medicaid coverage and funding cliff. Starting on April 1, 2023, states will be able to begin conducting Medicaid eligibility redeterminations and enhanced federal funding will gradually phase out from April through December 2023. In order to receive enhanced funding during this period, states must follow all federal requirements related to redeterminations, update beneficiaries’ contact information, and use multiple methods to contact individuals when they have moved and have an out-of-date mailing address. States will also be required to submit monthly reports on unwinding, including information indicating where beneficiaries are experiencing challenges.
Congress worked to make sure that the FY23 omnibus gave state Medicaid programs a roadmap for the months ahead and enacted the Inflation Reduction Act to provide additional financial support for those enrolling in health coverage through the marketplace. It is now time for the Administration to do its job and act to protect those who will be seeking to enroll in coverage in the coming months.
According to estimates from your Department, approximately 15 million individuals will lose Medicaid or CHIP coverage in the coming year and will therefore require affordable health care coverage. Millions will be eligible for significant financial assistance to purchase comprehensive coverage on the marketplace. But without additional protections, many Americans could find themselves enrolled in junk plans that do not provide comprehensive coverage or protection for individuals with pre-existing conditions. These plans, which were actively promoted by the previous Administration and remain unchecked, are not required to comply with consumer protections that limit out-of-pocket costs or coverage of essential health benefits, including mental health services, treatment for substance-use disorder, prescription drug benefits, and maternity care. Furthermore, these plans engage in the type of discriminatory practices, such as retroactive coverage rescissions, medical underwriting, and lifetime and annual caps, which were commonplace before the Affordable Care Act.
Since President Biden took office, he has prioritized expanding access to comprehensive, affordable health coverage. Congress has supported these efforts. It is past time for your Department to step up and address the expansion and proliferation of junk plans.