AUGUSTA – Legislation from Senate President Troy Jackson, D-Allagash, to limit short-term “junk insurance” plans received a public hearing before the Legislature’s Health Coverage, Insurance and Financial Services Committee on Thursday.
LD 815, “An Act To Regulate the Issuance of Short-term, Limited-duration Health Insurance Policies” would limit the duration of short term plans to three months and prevent carriers from offering these plans more than once in any 12-month period.
“Health insurance companies shouldn’t be able to trick Mainers into purchasing these cheap, faulty plans. They shouldn’t be able to sell Mainers a bill of goods only to pull the rug out from underneath them in a health crisis,” said President Jackson. “This bill protects Maine health care consumers and their right to health care.”
Over the past year, the federal government has relaxed rules on short term limited duration health plans – otherwise known as “junk insurance” – to make them more available to health care consumers. These plans are offered as a substitute for comprehensive health care coverage but fail to cover the basics.
Short term limited duration plans aren’t subject to the same standards ushered into statue through the Affordable Care Act or LD 1. This means plans can discriminate based on health status, age and gender, exclude coverage of preexisting conditions, impose annual or lifetime limits, opt not to cover entire categories of benefits (such as prescription drugs), rescind coverage, and require higher out-of-pocket cost-sharing than otherwise allowed.
In Maine, no short term health plan currently covers the cost of prescription drugs or maternity care. A number of other states have already taken action to protect residents from short term health plans, including Massachusetts, New Jersey, New York, Rhode Island, and Vermont.
“Short term, limited-duration (STLD) health insurance plans are problematic because individual consumers believe they have a comprehensive plan and then find out they don’t when they need coverage for a certain condition or service,” said Rep. Victoria Foley, D-Biddeford. “We must make sure the people of Maine get the coverage they need in a way that is clear and fair.”
Rep. Foley has introduced similar legislation to protect Maine health consumers from predatory short term health care plans.
LD 815 faces further action in the Legislature’s Health Coverage, Insurance and Financial Services Committee, as well as votes in the Senate and House.