INDIANAPOLIS — Hoosiers will not be able to take full advantage of the opportunity to purchase short-term, limited-benefit health insurance plans touted by the Trump administration when they become available Tuesday.
The so-called "skinny" health insurance is intended to reduce the cost of purchasing coverage by once again permitting insurance companies to deny sales to individuals with pre-existing medical conditions, or exclude any of the 10 essential benefits, such as maternity or mental health care, that standard health policies must cover under the Affordable Care Act, also known as Obamacare.
Skinny plans initially were authorized by the federal government in 2016 for short-term coverage not to exceed three months.
In August, the Trump administration announced that it would allow the "short-term" plans to run for 12 months beginning in October, and permit the plans to be renewed for up to three years.
However, that won't be the case in Indiana where a state law still restricts short-term, limited-benefit health plans to a maximum six months duration, with no possibility of renewal.
State Insurance Commissioner Stephen Robertson said Sept. 4 in an official notice that under the law, health insurance companies doing business in Indiana are welcome to convert their three-month policies to six-month policies once the federal change takes effect.
But Robertson reiterated that the Indiana statute absolutely does not permit the policies to run for 12 months, or be renewed for up to three years. He said the state law also is not pre-empted by the federal rule.
It remains to be seen whether the Republican-controlled Indiana General Assembly will act in January to revise the law in light of the new federal definition of a short-term policy.
U.S. Secretary of Health and Human Services Alex Azar, a former executive at Indianapolis drugmaker Eli Lilly and Co., said allowing the short-term plans to run longer will help stem rising insurance premiums and give consumers more options for purchasing health insurance.
"President Trump is bringing more affordable insurance options back to the market, including through allowing the renewal of short-term plans," Azar stated.
"These plans aren’t for everyone, but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system."
According to HHS, the average monthly premium in 2016 for a short-term health policy was approximately $124, compared to $393 for an unsubsidized individual market plan.
Though individuals who purchase skinny coverage and get seriously ill may face huge out-of-pocket costs, as many treatments and prescription drugs are not covered, deductibles are not capped the same as Obamacare-compliant policies, and renewal is not guaranteed.
HHS suggests the policies are best suited for Americans transitioning between different coverage options, such as an individual switching jobs, a student taking time off from school or families without access to subsidized marketplace plans.
Democrats have branded the short-term plans as "junk insurance."