‘Buyer beware’ say lawmakers, physicians about new insurance plan law

Democratic lawmakers and patient advocates gathered in front of the Capitol Tuesday morning to decry a bill Gov. Doug Ducey signed Monday that expands health insurance plans that patient advocates call “scam plans.”

Ducey signed Senate Bill 1109 into law. It increases the amount of time a person can be on a short-term insurance plan from six months to up to three years.

The bill is in part a reaction to a rule issued by the U.S. Department of Health, Human Services and Labor and the U.S. Treasury which extended the recommended amount of time someone can be on one of these plans, often referred to in short as STLDI.

The rule came after an executive order was issued by President Donald Trump that loosened restrictions on STLDIs. Fourteen other states have already conformed to the new rule.

The plans are exempt from Affordable Care Act regulations that govern pre-existing conditions and caps on coverage, and were originally created to be used as an emergency measure when someone is switching jobs or insurances.

“Governor Ducey strongly supports ensuring that Arizonans with pre-existing conditions have access to affordable, quality health care,” Patrick Ptak, a spokesman for Ducey, said in a statement to the Arizona Mirror. “This legislation simply provides consumers additional options to choose from in the healthcare market. It does not limit health care nor does it jeopardize plans already in place.”

Patient advocates and doctors see the new law’s effect differently.

“It’s ‘buyer beware,’” Dr. Paul Kozak, an emergency room physician said to the Mirror about the short-term insurance plans. Kozak was a special guest at the legislature Tuesday as the “physician of the day,” which brings doctors to the Capitol to meet with lawmakers.

Kozak, a Trump supporter, said he was unaware of the bill until this morning. He said it will likely weaken the ACA insurance marketplace and could harm consumers who may be unaware of what the plans cover. The bill does require that insurers are required to disclose the limitations and restrictions of the plans.

Kozak said a better solution would be making plans on the marketplace more flexible and affordable so healthy individuals buy into the marketplace and help bring costs down for those with extensive health conditions who can often cause premiums to go up if they’re the only ones in the marketplace, Kozak said.

Advocates worry that, by extending the amount of time people can be on short-term plans, it will make them more attractive to people looking for more affordable options, which in turn would take them out of the insurance marketplace, causing premiums to go up.

“Short-term medical plans are not a threat to Arizona citizens as long as they come with the proper disclosures outlining the specifics of those plans to consumers,” Stephen Briggs, a spokesman for the Arizona Department of Insurance, said to the Mirror. “If a consumer chooses a short-term plan that comes with the appropriate disclosures, it is not the role of government to second guess that consumer’s choice.”

Rep. Charlene Fernandez, D-Yuma, called it one of the most damaging bills to pass through the Arizona Legislature.

“We are here to warn Arizona families,” Fernandez said, a point echoed by the other speakers.

“Really, really check carefully into the fine print,” Will Humble, Executive Director for the Arizona Public Health Association said. “Know what you’re getting into.”

Sen. Tony Navarete, D-Phoenix, and Rep. Kelli Butler, D-Paradise Valley, both expressed hopes that lawmakers next year would work to find better alternatives to these plans and to help provide more insurance to Arizona residents, something people on both sides of the argument agree on.

Since 2013, the number of people between the ages of 18 and 65 who are uninsured in Arizona has declined from more than 20 percent to less than 12 percent in 2016, according to the most recent Centers for Disease Control data.

Nationally, one in four uninsured people were between the ages of 26 to 34-years-old, according to the Census Bureau.

In 2017, the majority of Arizonans received their insurance from their employer and approximately 6 percent of Arizonans had individual or private plans, including STLDIs, according to the Kaiser Family Foundation.

The Governor’s office touted support of the bill from groups like Blue Cross Blue Shield of Arizona, Arizona Association of Health Underwriters and the Greater Phoenix Chamber of Commerce.

Groups like the Leukemia and Lymphoma Society, the American Heart Association, the American Cancer Society, the American Lung Association and Children’s Action Alliance are all opposed to expanding the use of STLDI plans.

Cancer patient advocacy groups oppose the bill due to their exemption from ACA regulations, which can create issues for people diagnosed with diseases like cancer.

Thea Zajac of the Leukemia and Lymphoma Society previously told the Mirror about stories of people buying STLDI plans and then being diagnosed with cancer, only to have the insurers deny covering treatment, leaving the patients with hundreds of thousands of dollars in medical bills.

In Pennsylvania, a woman with an STLDI fainted and hit her head, only to find later that the plan wouldn’t cover most of her medical care and she was left with a $16,000 medical bill. Another person in that state had his payment denied when he discovered a heart condition that the plan stated was a pre-existing condition, according to Lancaster Online.