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ACS CAN Report: Short-Term Insurance Coverage is Inadequate, Confusing and Expensive for Patients
Examination of Plans in Six States Shows Enrollees Could Face Significant Financial Stress With Cancer Diagnosis
Washington, D.C.—A new report issued today by the American Cancer Society Cancer Action Network (ACS CAN) shows people who enroll in short-term, limited duration (STLD) insurance plans are likely to face serious financial strain should they be diagnosed with cancer.
Inadequate Coverage: An ACS CAN Examination of Short-Term Insurance Plans, reviewed short-term plan options in six states (Florida, Illinois, Maine, Pennsylvania, Texas and Wisconsin) to determine what plan information was available to consumers, including information on premiums and deductibles.
“People don’t typically anticipate a cancer diagnosis, so we wanted to see what kind of coverage these plans would actually provide should someone get unexpectedly sick,” said Lisa Lacasse, president of ACS CAN. “Unfortunately, the results were as expected, and the plans proved devastatingly inadequate.”
Originally intended as a temporary bridge between comprehensive coverage options, these plans can deny or charge people more for coverage based on their health status, are exempt from covering essential health services, like prescription drugs or hospitalization, and can charge older people more than three times what they charge a younger person for the same coverage. The U.S. House is scheduled to vote on a bill this week (H.R. 1010) rescinding a Department of Health and Human Services rule that expands the availability of short-term plans.
To illustrate what an enrollee in one of these plans might pay should they face an unexpected cancer diagnosis, the report includes a calculation of the out-of-pocket costs for a hypothetical 57-year-old woman diagnosed with breast cancer. The report found the hypothetical patient’s out-of-pocket costs would be more than $40,000 in the 12-month plan analyzed, $63,000 in the 6-month plan and $11,000 in the 3-month plan.
In all cases, the enrollee would become ineligible for subsequent coverage of her cancer care in a short-term policy because her cancer diagnosis would be considered a pre-existing condition and would have to wait until the next open enrollment period before enrolling in ACA-compliant coverage. If the patient had enrolled in an ACA-compliant plan initially, her out-of-pocket expenses would be capped at just under $8,000.
In addition, the report included other key information on short-term plans:
- Pre-existing condition exclusions: All short-term plans examined excluded coverage for pre-existing conditions. Five of the six plans stipulated that if someone developed a condition during the plan’s coverage period, that condition would be considered pre-existing and be excluded for coverage in any subsequent short-term plans.
- Lack of information for consumers: It can be difficult – if not impossible – for consumers to assess what services a short-term plan covers prior to purchasing coverage. Despite marketing materials that tout plans’ general benefits, most of the details about plan coverage were included in the plan’s policy documents, which were not made available to individuals shopping for coverage.
- Inadequate coverage: Half of the plans did not cover any outpatient prescription drugs. Only two plans offered coverage for any cancer screenings and none offered the full range of “A” and “B” rated screenings recommended by the U.S. Preventive Services Task Force (USPSTF) and required of ACA-compliant plans.
“This report lays out the staggering risks people may unknowingly take with their physical and financial health should they enroll in a short-term plan,” said Lisa Lacasse, president of ACS CAN. “These plans do not provide the kind of coverage necessary to ensure someone is able to prevent, detect and treat a serious illness like cancer. This report should serve as a warning to consumers and a call to action for lawmakers to regulate these extremely inadequate plans.”
Since HHS announced the short-term plan rule change, several states have acted to restrict the proliferation of short-term plans in hopes of preventing their destabilizing effects on the individual market and to protect consumers from inadequate coverage. ACS CAN has supported these efforts.