Rep. Cindy Neighbor said short-term health insurance was largely insufficient and could lead to unintended consequences because of lack of coverage. (Sherman Smith/Kansas Reflector)
TOPEKA — A bill passed by the Kansas Legislature last week will expand the usage period on short-term health insurance plans if approved by Gov. Laura Kelly.
“Short-term limited duration” insurance policies are aimed at providing stopgap coverage for individuals in between jobs or who have other short-term health needs. Unlike many normal health insurance plans, these short-term plans — dubbed “junk insurance” by consumer advocates and health policy experts — are not bound by strict coverage rules in the Affordable Care Act.
These policies do not provide comprehensive coverage and can deny coverage to those with pre-existing conditions.
Under current Kansas law, “short-term limited duration” insurance policies can only provide six to 12 months of coverage with one renewal, or up to two years. Senate Bill 29 extends the maximum renewal to a period of three years.
Proponents of the measure argued that while these plans may not be for everyone, they were important to providing more coverage options on the Kansas marketplace. However, during debate on the House and Senate floor, several detractors from both sides of the aisle characterized the plans as significant gambles.
“Unless you’re invincible, this is not the policy for you,” said Rep. Cindy Neighbor, a Shawnee Democrat. “You don’t know if you’re going to have an accident tomorrow. You don’t know if your spouse or your family is going to develop any disease or cancer. … If you have a heart condition, it’s not going to cover that.”
In late 2017, U.S. Congress passed a provision to eliminate the penalty for failing to meet the Affordable Care Act’s criteria. A few weeks later, President Donald Trump issued a new rule to allow these stopgap plans to run up to one year with the option of renewal for up to three years.
The rule, which went into effect in the fall of 2018, was challenged by critics, but a federal judge and appeals court both upheld the change. While some states have acted to limit these plans’ duration and scope, Kansas has not.
Sen. Beverly Gossage, a Eudora Republican and a health insurance agent, championed the bill for its affordability and allowing Kansans more choices when purchasing private insurance.
“Unlike the ACA marketplace that forces a purchaser to wait up to 11 months if he misses open enrollment, a short-term plan can start as early as the next day,” Gossage said. “But when the duration of the term purchased expires, the client must buy a new plan, and any condition that occurred during that previous term becomes an uncovered condition in the next term. By allowing the duration to be renewed up to 36 months, fewer of these purchasers will find themselves with conditions that aren’t covered.”
The bill passed the House 68 to 51, with all Democrats and some Republicans voicing opposition. In the Senate, the measure passed along party lines 29 to 11.
Rep. John Eplee, an Atchison Republican and physician, expressed concern that the bill has not yet received a hearing in the House Insurance Committee. He said supporting a complicated insurance policy issue without proper vetting would invite risk.
“I understand this is a convenient argument at the end of session and there’s a lot of horse-trading that goes on … but I think we need to be careful with this particular issue,” Eplee said before voting against the measure. “Insurance is not straightforward. I really think this needs to go through a process where we look at it carefully.”
Eplee said he saw some potential merits to the plans and may support such measures in the future after careful review.
The governor will have 10 days to act on the measure. The House vote suggests there wouldn’t be enough support to override a potential veto.
Sen. Ethan Corson, a Prairie Village Democrat, saw the extension to three years as a radical departure from the original 90-day intention of short-term plans. Given provisions of the American Rescue Plan Act bringing premiums for comprehensive coverage and short-term plans in line with each other, he said, such legislation was unnecessary.
“We know that these comprehensive plans are better because they don’t create things like risk of coverage being dropped or denied because of a pre-existing condition,” Corson said. “They don’t create the same gaps and benefits. They don’t hide coverage limits in the fine print.”
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