State Regulators Warn Against Alt Health Plans

State insurance regulators warn customers they could be diverted to less-comprehensive coverage.
October 8, 2019

State insurance regulators warn that marketing alternative health plans under the Affordable Care Act may divert consumers to less-comprehensive coverage if they are not careful.

Critics have alleged short-term and association health plans  don’t provide adequate coverage but drain the Affordable Care Act (ACA) risk pool.

In a statement, New York State Department of Financial Services Superintendent Linda A. Lacewell said the sale of such short-term or limited duration health insurance plans remained illegal in the state. Lacewell said, “These plans often fail to cover basic services and end up making health insurance more costly for consumers.” California has also prohibited the sale of short-term health insurance policies.

Earlier this year, a federal judge dealt a blow to another ACA alternative, cross-state sales of association health plans (AHPs). Judge John D. Bates of the U.S. District Court for the District of Columbia blocked implementation of a final U.S. Labor Department rule authorizing the sale of AHPs.

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