USA To Kill Off Short-Term PMI/IPMI Plans That Pretend To Be Annual Ones

Ian Youngman, author of the brand new iPMI market research report, International Health Insurance 2023, takes a look at changes to short term iPMI and PMI in the US.

The Biden administration plans to stamp down on short-term health plans. The proposal would reverse a controversial Trump-era rule that expanded the duration of short-term health plans.

In Summary

• Under the new rules plans that claim to be short-term health insurance would be limited to just three months, or a maximum of four months, if extended – instead of the current three-year maximum.
• Under the proposed rules, plans are required to provide consumers with a clear disclaimer that explains the limits of their benefits, including to existing consumers currently enrolled in these plans. 
• The Trump administration finalised the regulation in 2018 for short-term limited duration plans that can bypass requirements under the Affordable Care Act to cover pre-existing conditions and essential health benefits.
• The rule said that the 12-month plans can be renewed for up to 36 months.
• HHS said the plans were necessary to give consumers options as premiums on the ACA’s exchanges were too high. 
• Short-term plans are not required to abide by Affordable Care Act (ACA) protections.
• The insurance industry and consumer advocates charge the plans offer skimpy coverage and can deceive consumers that they are getting more robust benefits.
• The new proposed rules would close loopholes that the previous administration took advantage of that allow companies to offer misleading insurance products that can discriminate based on pre-existing conditions and trick consumers into buying products that provide little or no cover when they need it most.
• There is a White House fact sheet outlining the proposals. These plans leave families surprised by thousands of dollars in medical expenses when they actually use health care services like a surgery.
• The new rules would require short-term insurance providers to specify that they do not provide comprehensive coverage akin to traditional health insurance, and they would have to clearly disclose the limits to the benefits that customers receive.
• If finalized, the rule would limit short-term plans to truly short time periods, close loopholes made worse by the previous administration, and establish a clear disclosure for consumers of the limits of these plans.
• The Association for Community Affiliated Plans (ACAP), welcomed the move to reverse the Trump-era expansion of short-term health insurance plans.
• Short-term, limited duration insurance and other non-ACA-compliant plans offer a false sense of security that threatens consumers’ physical and financial health.
• Short-term plans were created to fill in brief gaps in cover for workers as they moved between jobs.
• They were never designed to work as comprehensive annual cover.
• States can decide to prohibit short-term plans or limit their duration, and there are 12 states that do not offer short-term plans.

Analysis

• There is no longer any compulsion for expat or immigrant workers to have ACA cover.
• Many temporary expats bought short-term cover even for up to 3 years as it was massively cheaper than buying PMI or IPMI.
• Not enough IPMI insurers offer short-term IPMI.
• The short-term plans were part of Trump attempts to destroy ACA and his total failure to keep promises to offer insurance that was better and cheaper than ACA plans.

What next

• We await the new rules.
• The Consumer Financial Protection Bureau, Treasury Department and Department of Health and Human Services will collaborate to look into whether organisations that encourage people to sign up for short-term plans are breaking the law.
• These departments will also be accepting public comment on the proposed rules before they are implemented later in 2023.
• There is an opportunity for IPMI insurers to offer short-term IPMI.
• They need to check that new or existing ones do not breach the 4-month rule.
• They need to do far better at explaining why any IPMI is best for expat workers who are not intending to move permanently to the USA.

The latest information, facts and figures on iPMI and international health insurance

• International Private Medical Insurance (IPMI) is a key global health insurance product for many insurance companies, brokers and MGAs.
• It is a dynamic market that is seeing major new partnerships, selling and buying of insurers or business books, technological changes and much more.
• New compulsory health insurance and universal health insurance affects demand in a positive as well as negative way.
• Brokers and insurers expect strong growth in 2023 and future years.
• Employers are shifting from traditional expat models to decentralised models that incorporate more virtual assignments and in-market hiring. 
• There are more short-term and flexible assignments but the number of long-term assignments is at pre-2020 levels.
• IPMI has new markets of HNW, digital nomads, temporary foreign workers, cross-border workers, local employees, contract workers plus international students.
• The publisher has been researching and studying the IPMI market for 30 years.
• His market reports are based on a daily updated database of 177 countries-83 insurance companies-47 insurance brokers, agents and MGAs/MGUs.
• The main IPMI is report is 300 pages and as well as the latest information this edition studies the many insurer-insurer IPMI partnerships that are changing the global market.

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