State Lawmakers Consider Restrictions On Short-term 'Junk' Insurance Plans

Apr 4, 2019

Thursday lawmakers on the Health Coverage, Insurance and Financial Committee considered two bills that would limit the use of short term health insurance. The proposals are in response to the Trump administration recently expanding the availability of short term plans, which critics refer to as "junk" insurance.

Short term plans are intended to fill a gap in coverage when someone is transitioning between long-term health insurance plans. They're inexpensive, but critics say the coverage they offer is skimpy.

A rule issued by the Trump administration last August extended the amount of time short-term plans can be issued from three months to up to three years. Democratic Senate President Troy Jackson wants Maine lawmakers to restrict their use back down to a maximum of three months.

"Sure these plans are cheap, but make no mistake, marketing these plans as a substitute for real health care coverage is nothing short of predatory," says Jackson.

"These plans can discriminate based on health status, age and gender,” he says. “They can exclude coverage of pre-existing conditions or charge outrageous rates. And they can impose annual or lifetime limits, opt not to cover entire categories of benefits, including prescription drugs, maternity care, and more."

But Dan Bernier, an attorney who represents the Maine Insurance Agents Association, says the plans are useful for a small subset of people, who should be allowed to purchase them for at least 12 months.