Attorney General Becerra Fights to Protect Californians’ Out-of-Pocket Healthcare Costs, Opposes Expansion of Low-Quality Health Plans

SACRAMENTO – California Attorney General Xavier Becerra today expressed strong opposition to a Trump Administration proposal that would allow insurers to sell inadequate, short-term health plans to consumers. The proposed change would flood the market with short-term plans that do not include essential benefits like coverage of preexisting conditions, maternity care, or substance abuse treatment. While the Affordable Care Act (ACA) has helped millions of Californians access more affordable coverage, this proposal would create a loophole for insurance companies that undermines this progress. According to the Urban Institute, under this proposed rule, California would face an estimated 9.4 percent increase in individuals without coverage, and would see patients’ premiums increase by 17.8 percent.

“This is just another attempt by the Trump Administration to undermine the ACA and go back to the days of buyer beware health insurance. California has led the country in ensuring high-quality and affordable healthcare and we do not intend to turn back,” said Attorney General Becerra. “Short-term plans are not meant for primary coverage, but this rule would flood the market with stripped-down, junk health insurance plans that don’t provide the reliable, comprehensive coverage families need when an emergency occurs leading to bankruptcy. We should be making policies that help people access affordable coverage, not looking for ways to roll it back.”

Currently, short-term plans serve to address temporary healthcare coverage gaps for individuals who are transitioning between health plans or who are experiencing a gap in coverage. The regulation proposed by the Departments of the Treasury, Labor, and Health and Human Services, seeks to expand the number of short-term plans in the market which could destabilize the individual healthcare market and raise healthcare costs. 

In the comment letter to HHS, Attorney General Becerra asserts the proposed rule:

• Provides patients with limited coverage and will lead to medical bankruptcy;
• Destabilizes the market, causing younger individuals to join the short-term plans and raising premiums for older individuals and those with existing health conditions;
• Misleads the public about the stripped-down plans that are inconsistent with the Affordable Care Act’s concept of standardization of health plans.

A copy of the comment letter is attached to the electronic version of this release at oag.ca.gov/news