Most short-term health insurance plans in Wisconsin don’t cover mental health and substance abuse treatment and none cover maternity care, but all pay for prescription drugs and cancer treatment, according to a report released Thursday by the state insurance commissioner’s office.
Short-term plans, which are typically cheaper than regular insurance because they don’t have to meet many requirements of the Affordable Care Act, denied 31.3% of claims in 2021, compared with 11.7% for plans in Wisconsin on the federal marketplace, the report said.
Only 10,310 residents had short-term plans in 2021, compared with more than 200,000 who got insurance through the individual marketplace of what is sometimes called “Obamacare.” With Republican lawmakers having tried to expand the reach of the plans and Democratic Gov. Tony Evers wanting to limit them, the report provides the first close look at the offerings as insurance enrollment for 2024 soon begins.
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The plans, meant to give people insurance for short periods of time between more stable coverage, can last year up to a year and in Wisconsin can be extended another six months. Of plans offered in the state by a dozen insurers in 2021, the duration ranged from a month to a year, and the average monthly premium was $157. People ages 55 to 65 were most likely to enroll.
The plans aren’t required to cover pre-existing conditions or “essential benefits,” such as maternity care, mental health and prescription drugs. Critics say many consumers don’t realize that when they sign up, which can cause unexpected bills.
“Thousands of Wisconsinites utilize (short-term plans), and we want to ensure that those consumers are informed about the scope and limitations of these plans,” Nathan Houdek, state insurance commissioner, said in a statement releasing the report.
The report was funded by the federal Centers for Medicare and Medicaid Services and compiled by BerryDunn Health Analytics Practice Group, with longtime Madison-based health care policy analyst Donna Friedsam as lead author.
A bill introduced by state Republican lawmakers in 2021 would have allowed short-term plans to last up to three years in Wisconsin instead of 18 months. The measure didn’t pass the Republican-controlled Legislature, and no similar bills appear to have been introduced this session.
Evers, in his last two budget proposals, including this year, sought to limit the total duration of the plans to six months.