Bicameral Democratic Committee Leaders Urge Administration to Withdraw Harmful Short-Term Insurance Rule

Rule Would Undermine Consumer Protections, Expose Consumers to Great Financial Risk, and Sabotage ACA Marketplaces

WASHINGTON – House and Senate Democratic Committee health leaders called on the Trump administration to withdraw a proposed rule that would encourage the sale of junk health plans that will undermine consumer protections, sabotage the Affordable Care Act (ACA) Marketplaces, and expose consumers to great financial risk.  The proposed rule, published on February 21, 2018, would extend the allowable duration of short-term, limited-duration insurance (STLDI) plans from three months to up to 12 months. 

House Education and the Workforce Ranking Member Bobby Scott (D-VA), House Energy and Commerce Ranking Member Frank Pallone, Jr. (D-NJ), House Ways and Means Ranking Member Richard Neal (D-MA), Senate HELP Ranking Member Patty Murray (D-WA), and Senate Finance Ranking Member Ron Wyden (D-OR) requested the withdrawal of the rule in a letter to Health and Human Services Secretary Alex Azar, Labor Secretary Alexander Acosta, and Treasury Secretary Steven Mnuchin.  

“This proposed rule would expand the availability of discriminatory, deceptive, and insufficient plans– like those that existed before the Affordable Care Act (ACA) – that deceive consumers into thinking they are covered for major medical expenses, and is yet another attempt to sabotage the health care markets on which millions rely for coverage,” the five Democrats wrote to Azar, Acosta, and Mnuchin

“Expanding STLDI would take us back to the days when consumers could be denied coverage or charged more based on age, gender, or health status and when they had no guarantee of coverage for basic benefits, such as maternity care, mental health and substance use disorder, prescription drugs coverage, and preventive services. These junk policies fail to cover needed benefits, particularly for people with preexisting conditions,” the Members continued in the letter.

Democrats are concerned that expanding junk insurance would undermine the individual insurance market, cause premiums to skyrocket for working families who need comprehensive coverage, leave consumers on the hook for paying exorbitant amounts in deductibles and out-of-pocket costs, and allow insurers to inflate profits by denying access to basic benefits guaranteed under Federal law, such as preventive care, prescription drugs, mental health and substance use disorder treatment, and maternity care.

A study by the Urban Institute found that the rule, taken together with the repeal of the individual mandate and other policy changes, will result in 6.4 million more uninsured compared to prior law, and will cause an additional 18 percent on average premium rise – disproportionally affecting middle-class Americans – in states that do not prohibit or limit STLDI. 

“We are dismayed that the administration is taking this step in the wrong direction. Instead of finalizing this proposed rule, the Departments should apply all Federal consumer protections to short-term plans and make them truly short-term in nature: limiting their duration so they fill in gaps, without becoming a poor substitute for quality, comprehensive coverage,” the Members continued“We urge the Departments to protect access to affordable health coverage for families and reject this ill-advised proposed rule.”

To read the full letter, click here.


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