Short-term health plans will limit mental health and substance use disorder coverage
for at-risk populations and cause higher premiums for others
Washington, DC / October 10, 2018 – The Kennedy Forum, led by former U.S. Rep. Patrick J. Kennedy, drafted a letter signed by 80 organizations supporting a lawsuit to block the Trump administration’s Final Rule on Short Term Limited Duration Insurance (STLDI) plans. The letter expresses alarm regarding the Final Rule, which allows a dramatic expansion of STLDI plans that often offer little to no benefits for the treatment of mental health and substance use disorders.
Additionally, the letter applauds the efforts of the seven plaintiffs – Association for Community Affiliated Plans, National Alliance on Mental Illness, Mental Health America, American Psychiatric Association, AIDS United, National Partnership for Women and Families, and Little Lobbyists – to block the fundamentally flawed Final Rule that will reduce access to care for millions of Americans.
The Final Rule allows low-quality STLDI plans to be sold for coverage periods of up to 12 months, with renewable or extension periods of up to three years. Because these plans are only intended to be temporary solutions to bridge coverage gaps, STLDI plans had been limited to only three-month durations. Low-quality STLDI plans leave individuals and families unprotected and at risk of catastrophic health care costs because they frequently do not coverer mental health, addiction, maternity care, prescription drugs, and preexisting conditions.
The Final Rule even acknowledges that these low-end plans attract a “relatively young” population. This is the very population that, according to a recent SAMHSA study, needs mental health and substance use disorder treatment services the most, often with no warning. The same study found that young adults are experiencing increasing rates of serious mental illness, major depression, suicidality, and substance use. Thus, STLDI plans will likely worsen our country’s concurrent epidemics of opioid overdoses and deaths by suicide.
Because STLDI plans are allowed to discriminate – unlike higher-quality plans that must comply with Affordable Care Act (ACA) protections – the Trump administration’s Final Rule will take our country backwards, allowing insurers to discriminate against people with preexisting conditions by either denying coverage or charging them exorbitant, unaffordable premiums to obtain needed coverage. Additionally, STLDI plans can simply exclude mental health, addiction, or any other care altogether. As a result, STLDI plans do not have to comply with federal mental health and addiction parity requirements that prohibit coverage discrimination.
Moreover, the Final Rule will siphon off “relatively young, relatively healthy” individuals to cut-rate, low-quality STLDI plans. As the Final Rule acknowledges, this will likely lead to what economists call “adverse selection,” a phenomenon in which high-quality plans become more expensive and force people to lose insurance altogether.
“This administration’s actions to expand discriminatory insurance plans that severely limit or fail to cover mental health and substance use disorder treatment services, as increasing rates of overdoses and suicides devastate American families, are a travesty,” said Patrick J. Kennedy. “Now more than ever, we need to expand access to treatment and build on the progress made toward mental health equity and a health care system that treats both the body and the mind.”
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About The Kennedy Forum
Founded in 2013 by former Congressman Patrick J. Kennedy (D-R.I.), The Kennedy Forum leads a national dialogue on transforming the health care system by uniting mental health advocates, business leaders, and government agencies around a common set of principles, including full implementation of the Federal Parity Law. Launched in celebration of the 50th anniversary of President Kennedy’s signing of the landmark Community Mental Health Act, the nonprofit aims to achieve health equity by advancing evidence-based practices, policies, and programming for the treatment of mental health and addiction issues. The Kennedy Forum publishes frequent issue briefs and is a repository of other educational resources and tools focused on parity. To learn more, visit www.thekennedyforum.org.
