Early on in the Trump administration, the Departments of Treasury, Labor, and HHS rules that short-term limited-duration health insurance plans should be available without complying with various underwriting rules that would otherwise be required by the ACA. These are cheap policies that don't cover very much. Once upon a time, they were designed for an initial coverage period of up to six months and were intended to provided "gap" coverage for individuals who were between real health insurance plans. The 2017 rule, however, allows these all-but-worthless plans to be sold for an initial period of three years and to serve as the primary health coverage provided by employers. It doesn't take a genius to figure out what the Trump administration had in mind: provide employees with the option of low-cost alternative to more expensive (and better) health plans and they will probably take it.
Today the D.C. Circuit in a 2-1 decision upheld the rule. You can read the opinions in Association for Community Affiliated plans v. U.S. Department of Treasury here. The majority opinion is pretty depressing. Judge Judith W. Rogers -- one of the few bright lights left on the D.C. Circuit Court of Appeals -- dissented in an opinion that really should have been a majority opinion. Her introductory paragraph says it all:
I hope the en banc court takes this up, or that SCOTUS will fix it, but I am not holding my breath. Perhaps a new administration in 2021 will get this right.Today the court upholds a Rule defining “short-term limited duration insurance” (“STLDI”) to include plans that last for up to three years and function as their purchasers’ primary form of health insurance, in stark contrast to the gap-filling purpose for which such plans were created. Because STLDI plans are exempt from the requirements of the Patient Protection and Affordable Care Act (“ACA”), insurers offering them can cut costs by denying basic benefits, price discriminating based on age and health status, and refusing coverage to older individuals and those with preexisting conditions. As a result, they leave enrollees without benefits that Congress deemed essential and disproportionately draw young, healthy individuals out of the “single risk pool” that Congress deemed critical to the success of the ACA’s statutory scheme. 42 U.S.C. § 18032(c)(1). The Supreme Court has instructed courts to interpret the ACA’s provisions in a manner “consistent with . . . Congress’s plan.” King v. Burwell, 135 S. Ct. 2480, 2496 (2015). Because the Rule flies in the face of that plan by expanding a narrow statutory exemption beyond recognition to create an alternative market for primary health insurance that is exempt from the ACA’s comprehensive coverage and fair access requirements,I respectfully dissent.
