Aug 23, 2018
The California legislature passed a bill that would prohibit the sale of short-term health plans. Authored by state Sen. Ed Hernandez (D-Azusa), SB 910 awaits action by Governor Brown. If the bill becomes law, it would take effect in January 2019. Californians would still be able to buy short-term coverage through Covered California or buy off-exchange individual plans. Hernandez said, “We are one step closer to keeping junk insurance out of our state…These short-term policies…subject people to huge health care bills, barely cover any services, and give people a false sense of security…California cannot go back to the days before the ACA when you could be denied care completely or go into financial ruin because of these junk plans.”
SB 910 was introduced in response to the Trump Administration’s proposed regulations in February to expand short term limited duration coverage. Earlier this month, CMS issued final regulations to extend short-term plans from three months to up to three years. These short-term plans don’t have to cover essential health benefits, like cancer treatment, substance use treatment, or maternity care. Additionally, these plans can deny coverage for those with pre-existing conditions. The combined effect of eliminating the individual-mandate penalties and expanding short-term limited-duration policies would increase 2019 ACA-compliant individual premiums by about 18% in the 43 states that don’t prohibit or limit short-term plans, according to an issue brief released by the Urban Institute.
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