The Indiana Department of Insurance is recommending Hoosiers carefully educate themselves before purchasing a short-term health insurance plan that offers less coverage than typically required by federal law.
On Friday, a federal judge in Washington declined to halt the sale of the policies, sometimes dubbed "skinny insurance" or "junk insurance," that became more widely available following President Donald Trump's 2017 executive order aimed at improving "choice and competition" outside the health markets established by the Affordable Care Act, also known as Obamacare.
Prior to the president's action, short-term health plans with limited benefits generally only were available for three months at a time.
The court ruling affirmed Trump's order permitting Americans to purchase a one-year limited benefits policy, and to renew it twice for up to 36 months of continuous coverage.
In most states, the policies often are available at lower rates because they aren't required to cover a standard group of essential benefits, such as pregnancy and mental health care; provide insurance to individuals with pre-existing medical conditions; or spend at least 80% of the premiums collected on medical care.
That's not the case in Indiana, however.
A new state law enacted in May, which replaced Indiana's six-month cap on short-term policies with the three-year limit, additionally mandated the policies at least include coverage for hospitalization, emergency room care, outpatient services and laboratory work.
The policies also must provide up to $2 million in annual coverage, disclose in large, bold type any of the 10 essential health benefits required by Obamacare that are not included in the short-term policy, and list the next open enrollment period for Obamacare-compliant plans.
"This both broadens access to short-term insurance, but also helps to educate people on the Affordable Care Act and when they can sign up for more permanent insurance," said state Rep. Martin Carbaugh, R-Fort Wayne, sponsor of House Enrolled Act 1631.
Separately, a provision in the new state budget, House Enrolled Act 1001, declares that Obamacare's requirement for insurers to issue policies regardless of a purchaser's pre-existing medical conditions remains in force in Indiana, regardless of the legal status of the Affordable Care Act.
Despite those protections, the state's insurance regulatory agency said Hoosiers lacking employer or government health coverage, and are considering the purchase of a short-term health plan, should carefully assess their budget and health needs before signing up.
In particular, the agency notes that, unlike Obamacare plans, insurance companies can reject an application to purchase short-term insurance, either at the time of sale or retroactively; the policies don't have to comply with state-mandated coverage for autism or colon cancer screenings; and pricing can vary based on age or health conditions.
The policies also may have higher deductibles, co-payments and cost sharing requirements than Obamacare plans, even if the monthly premiums are lower, the agency said.