Cheaper alternatives to the health insurance plans offered under the Affordable Care Act may be available to some individuals this year after the Trump administration rolled back some Obamacare regulations.
The changes mean that it is up to each state to mandate what those plans cover. Kansas health insurance laws — and to a lesser extent Missouri laws — are now more strict than the new federal rules, requiring insurers to cover more conditions and pay more benefits.
Insurance regulators from several states gathered in Topeka on Wednesday to discuss what the new federal rules mean and how to make sure consumers understand what the new plans do and don’t cover.
“We wanted to get everybody who was interested here in Kansas on the same level in terms of their understanding of the new rules and literally how Kansas rules compare to the new rules by the Trump administration,” said Kansas Insurance Commissioner Ken Selzer, whose agency hosted Wednesday’s event.
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The federal rules now allow individuals to buy “short-term” health insurance plans that last up to 364 days and don’t have to cover any of the things the ACA plans do, like maternity care, prescription drugs and lab tests.
That has led some regulators to fear that consumers will be marketed “junk insurance” plans that are appealing because of low premiums but pay for hardly any care. Some states have moved to limit the plans, and New York has banned them altogether.
A policy brief by the nonprofit Kansas Health Institute said the plans “may be an attractive alternative to young, healthy consumers who require little or no ongoing health care or prescription drugs, but may increase premiums for individuals who want or need ACA-compliant coverage and could cause insurers to leave the ACA-compliant market.”
But Selzer said he hoped the short-term plans would draw people not from the ACA market, but from the pool of about 8 percent of Kansans who remain uninsured. For some who don’t qualify for federal subsidies, ACA plans have proved prohibitively expensive.
“I personally see it as an advantage to Kansas overall,” said Selzer, whose term ends in January.
Selzer said those who want all of the guaranteed coverage of ACA plans can still go to healthcare.gov and sign up. But the new plans could be an option for those who don’t, provided they’re aware of the limitations of the short-term plans, which often don’t cover pre-existing conditions.
“Before signing up for a short-term plan, it’s important to think through what health care services you and your family may need and check whether those services are covered,” Selzer said.
Under state laws, the new plans can’t be completely stripped down.
Kansas mandates that all major medical plans have to cover some conditions, notably mental health.
It also requires insurers to pay out in claims at least 60 percent of what they take in in premiums. That’s less than the 80-85 percent required under ACA plans, but still guarantees that insurers can’t sell plans that don’t pay for anything.
Amy Hoyt, a lawyer for the Missouri Department of Insurance who spoke at Wednesday’s event, said Missouri doesn’t have a similar requirement to pay out a certain percentage of premiums as claims. But it does have some conditions, such as eating disorders, that all plans of six months or longer are required to cover.
Insurance company representatives expressed a range of interest in selling the short-term plans. A representative of Blue Cross and Blue Shield of Kansas, which sells in every Kansas county except Wyandotte and Johnson, said her company is exploring the options but so far hasn’t had much demand from consumers.
But Coni Fries, the vice president of Blue Cross and Blue Shield of Kansas City, said her company sees a market opportunity in people who “would never buy the ACA product.”
“It’s the least-regulated product,” Fries said of the short-term plans. “That means it’s going to be the lowest cost. That doesn’t mean we need to shortchange the consumer on coverage.”
Blue KC pulled out of the Obamacare market last year, citing unsustainable financial losses.
The Trump administration also rolled back rules on “association health plans” offered to certain professions, such as farmers or dentists, by trade groups. But Kansas law also still has restrictions on those, and Selzer said his office is in touch with legislators about whether to drop some of the state’s rules as well.
Kansas Rep. Cindy Neighbor, a Shawnee Democrat who attended Wednesday’s event, said the regulation of association plans would be a topic of discussion when the Legislature returns in January.
“I think we’re going to have to look and see what’s out there,” Neighbor said. “It certainly needs to be looked at and addressed.”